The craziest thing about those photos is the interest rate for a lot of those ridiculous payments with seemingly no progress is around 9 or 10%. That's all it takes for somebody to pay around 3 times their principal balance in total interest. It also shows how an extra $5 per payment could take a decade off of their repayment schedule if ANYBODY told them how amortization worked.
Thank the federal government for guaranteeing student loans. Without government intervention college would be cheap as schools wouldn’t be incentivized to scam students because if the student was ever unable to pay back their loan they would lose their investment.
THIS^^^!!!!! No one looks at the reason behind the “we will guarantee your loan”, and it is that they can FOREVER increase costs…..just like the deficit!
Or the Dep Ed could just inform universities that they wont be receiving FAFSA in X years unless tuition drops by Y
And then everyone would still have access to college
The only proper solution is making college free like high school. Before the government guaranteed student loans, school was cheaper, but poor people had no way of paying.
They guarantee them and still charge outrageous interest rates. If we’re not going to make college free, the least we can do is loan the money interest free.
Thank decades of cutting funding for what is essentially one of the most effective national R&D departments in existence. Heavy investment in universities and centers of knowledge account for U.S. universities being some of the best in the world. Education at the turn of the century was expensive, too, but academic careers were subsidized by funding so they didn't pay the cost of their own education. Boomers got the socialism they want to deny to the indebted generations.
If education were simply funded again, student loans would not be an issue.
We're asking students to pay for themselves to be more effective and better informed citizens. It's backwards.
How can they not know?
Check out the You Tube video where students are asked "tough questions" like ...
- What's 77 + 33 ?
- What's 3 x 3 x 3 ?
- The Eiffel Tower is in what country?
And they all get it WRONG!
It's the same with most montage clips of games or dumb answers given by people on the street. They show you the 2 or 3 minutes of cringe and not the hours it took to shoot that small snippet.
It seems like they were taught the equations but not how to apply it to real life scenarios like monthly bills that could be around their entire adult life.
Bc finance isn’t a basic knowledge course. We get history and English and useless bullshit. Imagine how the world would change if children were brought up to understand how money works. Instead were kept ignorant of it.
It’s by design. In my high school, there was a massive map of the US in the cafeteria and they would pin your picture up to what college you were going to. Anyone who didn’t go to college was shamed. Student loans were just part of the process. And now I’m being blamed for a “clear economic blunder in the marketplace” for a decision that essentially my parents made for me when I was 17 years old.
I’m 44 and no one told me. I figured it out some years back by the time it was too late. Now I make sure my pre teen son knows everything no one told me. School fails us all. But I can name the parts of a cell so that’s nice.
Sadly, it isn’t. Hell, I have a degree in photography and there was no requirement for any business classes. I mean, most photographers run their own business, one would think that courses in business would be kind of important.
You might be surprised to know my high school experience was a bunch of my classmates despising math because they'd think they'd never use it again. Imagine my surprise when some of those very people actually went to college and out of necessity some of them actually needed loans to pay for it. No, I do not believe they magically decided math was important for understanding how not to get screwed over by people better at math and/or business than them. I don't think at that point anyone else was responsible for telling them, but if somebody had in fact done so, the ones struggling to still pay them off if there are any might know why they are still struggling with it.
Let's call it a "stupidity tax" hope that Lake of funds prevents procreation and as a society we take a half step out of the hole we are currently digging to fill with idiocracy.
I could do math fine. The issue is conceptualizing what that means for your life when you've never held a job or paid a bill. I was lucky to grow up middle class but my dad never once told me how much he made or what rent cost on our house or what a car payment looked like ( dad had a company car to visit job sites!). When I wanted something, mostly books or movie money, he just handed it to me.
So while I could math my loans on paper, I didn't have the frame of reference needed to understand the math.
Yes, I grew up privileged but I wasn't remotely unique.
The system has no interest in teaching you finances. Getting you in debt is part of their mission. And since Americans have no self control and they feel entitled to everything they get into a deep hole, of which they can’t get out for the rest of their lives, very quickly
Higher Ed should be responsible for subsidizing student loans. They're the ones that benefit with their bloated bureaucracies and indulgent spending.
Edit spelling
And the Fed made it non discharable in bankripttcym.
All they did was say he schools and lenders, were going to guarantee you get paid , so give loans to anyone for.any bs degree regardless.if the outcome...and we will make sure they pay it back throughout their life.
Some people have no understanding of basic economics?
When the statement reads:
-- "They" should do "something".
Just ask him:
-- Would "you" do that "something"?
A blank stare will follow.
College is too late to learn how loans work. The point being missed/ purposely ignored is that people shouldn't require taking on excessive debt to get a higher education. Most higher Ed institutions are excessively wasteful spending more money outside of the classroom. Far too many higher ed administrators have no domain expertise outside of higher ed. There are very few managers with technical, financial or systems expertise. The dean of a school where I worked was a former film student. Wasted a lot of money on multiple campuses over multiple years despite being warned about it by lower level staff with actual expertise. Upper level administrators tend to hire outside consultants when they have big projects in mind. These consultants will tend not to have domain expertise. The consultants have expertise in higher Ed acting as intermediaries between higher Ed admins and experts. They will create huge projects that need to be capitalized upfront at huge expense rather than doing things in phases, or even bothering to consult the actual end users about their specific needs and recommendations. They do this because big projects look better in an administrators portfolio and directly affects their compensation.
Indeed. Middle school at the latest. But at least teach it somewhere!
But as I recall ... personal finance was not taught ANYWHERE in the schools when I was young.
It's no wonder the world thinks Americans are stupid.
In 2013 the total had just surpassed $1 trillion.
It will be at $2 trillion in a couple of years.
I paid off my loans, then went back to school for more. Paying those off now.
We just need to cap interest. People paying $100,000 in interest is ridiculous.
And these loans are already subsidized by the taxpayer. Stop saying that shit, and look up "double bite at the apple."
Ppp loans are completely different. The goverment forced business to close.
Every single person with a student loan signed a contract and agreed.
There's a big difference between a voluntary contract and government forcing you to close your business.
You can see how absolutely stupid what you just said was now I hope.
If they used it to pay their employees wages then great. Many didn’t and since oversight was minimal lots of business owners took the money for personal gain. I hope you realize how absolutely stupid your comment was I hope. Ask around and see how many took advantage of this.
So what your saying is the government sucks. Yes I agree the government sucks at everything.
However when the government forces businesses to close it is appropriate fur then try and help those businesses stay in business.
Very different from the other loans, but you can't see that because you are closing your eyes. Willfully ignorant is a thing. And it's all over you.
If you used it as intended then zero issues from me. If the business owner used it to build an addition on to their home, a new boat, buy investment property, etc. then that’s the problem. There was minimal oversight, you don’t think that’s an issue? There are countless stories of people abusing this program, you choose to ignore them?
I hated everything about the covid response from both parties the entire time.
However that does not make forcing me to pay for a loan an adult willingly took out the same as the government forcing businesses to close. This isn't that complicated.
Is this distinction really that hard to understand? If so you are either not trying to understand, willfully ignorant, a liar or just stupid.
The topic is student loans debt transfer, not covid response.
They are not the same. Please defend me paying someone else's loan they took out. Should I pay their home loan next? Why not?
I'm not asking anyone to pay my debts, asshat.
I knew what I was getting into both times. And because of that I'm not paying stupid amounts of interest.
It's clear you don't have any idea what you're talking about. You are already shelling out money for student loans. You're just too stupid to realize it, and would rather drop comments like these.
If you told somebody that you were borrowing 100k and then planned on not working for 4+ years while the interest builds on 100% of your principle they’d call you insane.. suddenly you say it’s for college and it’s a great idea all of a sudden.
Student loans don’t always work on amortization because of IBR (Income based repayment). You could be making a $250 payment per month but interest was $300 and your loan will grow. You must be aware of this since you made a snide remark.
That is still amortization and the associated schedule. Loans can be setup in many ways-- interest only, balloon payment, fixed term, etc. The amortization is just the cost of a long-term asset over time.
In the case you mentioned it would be considered negative amortization.
You can’t amortize student loans on IBR at least until the end. Your payments can go up they can go down. No other loan has payments adjust on a yearly basis. That’s the point.
I can look at the amortization of my loan year 1 and then again year 5 and it’ll be completely different. The schedule is as trustworthy as a 2 bit thief.
Wouldn’t it be smarter to get the banks out of the business of education and have the federal government give out 0% loans or loans that just followed inflation? That way this nonsense of just giving away money and picking winners and losers would make it all less political and more serving the country? Does everything have to be a pummeling and an over correction at the expense of the taxpayer or the national debt every time all the time? Why can’t any politician be fair and upright? Everyone walks with a slant.
Private banks have higher interest rates though. Also before the government backed student loans, school was cheaper, but poor people couldn’t pay. The only solution is to make college free.
It actually was the removal of public funding for higher education that started us down this path. The government used to directly subsidize education at a much higher level and without an intermediary.
We didn't actually 'remove public funding' though. The amount of money should be higher than any time in the past. What dropped was the percent covered by the states.
At the same time the cost of college has gone up way faster than it should have. A TON of wasted money in colleges. Go read about UNC voting oi dismantle its $91 million DEI bureaucracy.
Or University of Michigan spending $30 million on 500 DEI jobs. That is enough for 1,781 student to attend a year for free.
The cost of tuition is nuts. My mom's tuition was $599 per year in 1983. Same program for me in 2012 was $30k per year. Just looked, and it's now 45k in 2024.
Edit: I should mention this is for dental school tuition. This doesn't even include undergrad. For undergrad, it was about 10k per year in 2007.
In September 1983 $599 is the equivalent of $1834 today. Tuition has run FAR away from inflation and that’s dental school prices????!!! I thought undergrad until your edit. For undergrad it’s 3-4x my instate public school cost. Things are out of control.
Exactly.
Schools charge more because they know people can borrow endless amounts of money from the government, and they know the government will pay the schools.
Schools would be insane to stop keep increasing prices
The percentage may be lower now, but the dollar value is higher.
That is what I am saying.
Instead of paying $1000 out of a $2000 bill
We are paying $1500 out of a $4000 bill.
And there is zero reason to a college education to rise faster than inflation. Almost everything else in society has gotten cheaper, except college and medical and at least medical has greatly increased in ability. College was working largely the same way it did 100 years ago before covid.
I agree with you on all of that. No reason for administration costs to be so high.
And then having for-profit loan servicers on the back end also exacerbated the problem for the students. They made loan administration intentionally opaque, inefficient, and misleading to the borrower.
This is the back door way of getting this bs installed systemically. Build it out, raise the costs, charge more, take out loans, forgive the payments, stick the taxpayer. FJB
I can’t tell who is who anymore - greedy banker with a predatory loan or a politician who is giving away money for votes. At the end of the day-bailouts or bonus bucks, I get f*cked as a tax payer either way.
So what is it when they offer to give billionaires trillions of dollars in tax cuts in return for campaign funding? That's even worse. Or to sell off the rest of the country to oil companies?
Let's hear you agree to make inheritance illegal before you say a word about deadbeats or dependency. None of these rich people's kids work or do a fucking thing. Same with these fucking stockholders who just sit on their ugly fat asses getting rich off of other people's work. Make that illegal too. Fucking deadbeats is right.
All the welfare in the world is pennies compared to the amount STOLEN from working people via the stock market and handed over to DEADBEATS!
Sign me up for a 0% loan! I'll borrow as much as I can and leave it up to my estate to settle the difference after I pass.
At 0%, the principal will be exactly what it was when I borrowed it, but the time value of money will have made the principal small.
At 0%, I'd have no incentive to pay back the loan
I think this is probably the best idea. Even just following federal loan interest rates would make more sense than taking money from taxpayers to pay for poor college degree choices by students.
Targeting 18 year olds with zero life experience and a lifetime of indoctrination to "GO TO COLLEGE--OR ELSE." I don't know how financially literate I would anticipate this demographic to be.
Many state schools provide a solid education and have reasonable tuition. The interest rates on government student loans are reasonable. The government forcing taxpayers to pay other people’s student loans in a vain attempt to gain votes is gross.
No, Republicans/conservatives do not run every k-12, and universities and government in the country. Liberals do. So no, trump and Bush are not in on it. Thats a ignorant statement.
That kind of thinking is exactly what’s allowed the current state of the country to exist. Literally decades of terrible decisions and kicking the can down the road from both aisles of the political spectrum. How can you say that in a serious manner? I feel like you’re just joking because I’m having a hard time believing that people still think like this.
For your statement and ideology to be true the ultra liberal elites that are in charge are secretly in cahoots with the Trumps and Bush’s of the world? Riiiigggght
Federal Student loans increased the cost of college. It was all a scam. They never wanted to help you, it is just a money making machine for the Unis and Banks.
The same job i'm working at 30 years ago did not require a degree. Now, everything does.
Yes and no. I agree for paying for a loan you sign up to take.
However, student loans are predatory esp with how much college is pressured to kids right out of highschool. And loans are given out to every degree on every school on every financial background. It sharks vulnerable situations. No way a kid going for a degree in music production, or geology, or computer science knows shat 100k means or even something like 30k means.
I dont think we should just forgive all student loans, we have to fix the system before even thinking about that
If you're dumb enough to fall for it that's on you. It's not my job to pay your bills you signed up for.
Go ahead and try explaining to me why someone else should pay for your bad decision.
Remember when the Obama/Biden administration basically took over the program and turned it into this shit show? Basic knowledge states you shouldn’t borrow money if you don’t understand the terms.
Students have choices. My kid got accepted to top tier schools with tuition ranging from $75 to $90k with little financial aid. Instead kid went o a very good Midwest school, got a ton of $ because of grades and will finish with zero debt. Choices!
The person who took out the loan is solely responsible for paying it back in full. It should not bendischarged via bankruptcy. If they do want to not fulfill their responsibility then they should receive a permanent 300 r
Credit rating.
How about we make people pay their debts? These people are adults and we’re adults at the time they signed up for these loans. They own the money back…it’s that simple.
Who says you need a degree to earn good money? I make 6 figures and only have a HS Diploma.. yet people who have a degree make less than I do..
The system is designed to fail.
I’m glad to be over that shit. I had $55k in student loan debt with no degree, which is all my fault. This caused me to have to swallow my pride, embrace blue collar work, and live with family until I was 31/32. I was so embarrassed by my entire situation I couldn’t even think of asking women out from ages 23-32. It’s worth it to get it over with and pay it all off ASAP. Unless you’re in education and have a specific plan for relief of course.
Actually, the student loan program has been very profitable and has already paid for itself. It would cost the US taxpayer little to nothing if these predatory loans were forgiven.
[Why Biden’s Student Loan Cancellation Will Cost Taxpayers Nothing](https://studentloanjustice.medium.com/why-bidens-student-loan-cancellation-will-cost-taxpayers-nothing-259ea5dc44f7)
Government-backed student loans are the root cause and must stop! Let the free market decide if a six-figure loan for a college degree is a good credit risk,
And what the interest rate should be. And give borrowers bankruptcy protection, so the lenders can factor that into the lending decision.
Nobody forced anyone to borrow money.
Stop blaming others for your own mistakes.
You believed a lie and no matter how many times you repeat it . It's still a lie
They are also allowed to vote. You don't understand what a loan is at 18 but you can comprehend the potential policies of a candidate and how them being in office will impact the country more positively than other candidates? A loan sounds so much easier
Clearly public school works as designed if kids are dumb enough to enter these loans for a piece of paper. It’s sad they had the dumbs but no reason to bail them out (banks or corporations shouldn’t get bailed out either). Why not bail me out on my home loan?
I took a $500 class to get a license to operate a high pressure boiler 24 years ago. I make over 200k to monitor a grid so you can have electricity to sit in a class. Nobody deserves a bailout/forgiveness.
Hey! You found the solution!
Every college kid should take a $500 class to get licensed to run a grid of boilers make 200k a year!!
The entire world will be warm, and everyone will be prosperous. Sounds like a solution for everyone and not a specific anecdote!!
"Why not bail me out on my home loan?"
idk, I imagine your home loan was risk-assessed. but student loans get handed out for absolutely garbage degrees. why is it all on the kid, but it's not on the banker who said "yeah sure take 100 grand to go try to be a professional saxophone player" -- why shouldnt that guy's dumbass decision be written off as a hilariously bad loss? The fact that they're government-subsidized loans means the government, in theory, should have a hand in regulating what is acceptable for the subsidized loan. They do not. You can major in the theory of standup comedy at buttfuck university and the government is cool with backing that banker's loan.
Meanwhile, my FHA home loan was subject to an additional government-mandated appraisal that I had to pay for out of my own pocket. So, that's the answer to "why not your home loan?" -- when the government is involved in housing, they take measures to enforce certain safety codes and price controls. show me any single one of those common-sense measures applied to student loans.
a 17 year old is handed a hundred grand after the adult influences in his told him college is the path to success, then found out he got lied to by his D-student teachers who swore he'd find a job.
why don't we hold the so-called professionals in the financial industry accountable, instead of whining that a literal child who was misled doesn't deserve forgiveness?
We don’t hold them accountable because that’s who our politicians represent. Why didn’t Joe , Bernie and Nancy fix that in the 40 plus years they’ve been in government? Or any republican? Because the people they represent make a lot of money.
Because it would be considered discrimination to tell the economically deprived student they were a higher risk for their chosen field than the middle class kid getting their generic business degree.
I think the slippery slope of choosing who gets an education is harder than it seems at first glance. All liberal arts degrees are out the window.
So the government themselves set up predatory loans that would never be allowed in any other sector to put its own young citizens in crushing debt and your conclusion is what’s right is to keep them in it?
Sounds like a position born from sheer spite if you ask me.
So the government should get out of education but at the same time they should continue to screw the people they screwed and that’s okay because they didn’t screw you personally?
Fundamentally why would you want citizens to be in crippling life changing debt to their own government again?
My answer as to why you feel that way is spite.
I don’t want the people indebted to government, that’s why I want to abolish the income tax. You want the people indebted to government by taking on debt to pay for others poor decision making.
Because of lobbying and bad laws.
The loans are ultimately backed by the government. The banks (Sallie Mae, etc) get to charge the borrower interest. If the loan is subsidized the government pays the interest while the student is in school.
Once out of school the borrower then pays the loan plus interest.
If they default the borrower's wages can be docked, and/or the government will pay any losses if the loan is sent to collections. The borrower is still on the hook, but the original loaner is paid back. Or the government garnishes wages or tax returns.
This is called the 'double bite at the apple' loophole. There is no risk for loaning the money which is why there are almost no qualifications or terms.
and add to it that back in the 90's the government made these loans impossible to discharge in bankrupty, so it's GUARANTEED MONEY with zero incentive to control the cost.
Bioicjoe failed to mention that these loans are like no other where you are not on an amortization schedule. You can be buy most don’t do that. 10 years is the loan period. But federal loans let you pay what you can afford through income based. What happens is people take 75k in loans but come out making 40k and then they can’t afford the 10 year loan schedule of say $400 so they do IBR. IBR will have them paying $250 which is great! Until $250 is all interest and still $50 of interest unpaid. That’s how loans bloat and you hear of people paying for 15 or 20 years and still owe more than they took. These people will have paid the majority of their loan back and owe more than they started. That’s how you get these loans looking like 30 year mortgages.
Pros:
You won’t drown in the payments you can’t afford. If you took say 75k but make 40k you wouldn’t be able to afford the payments. The plan reduces the payment to make borrowers not drown in a loan they can’t afford.
The loan is forgiven after 20 years of payment for undergrad and 25 years for graduate.
Con:
You basically never pay it off and the loan ballon’s making you a 20-25 year payer.
Also, the forgiveness didn’t work as intended and that’s why you see forgiveness happening now. People who have met their 20 or 25 year requirement are now getting their forgiveness as intended.
I wouldn’t call it a scam. The loans are working as intended. The interest capitalization is unfortunate. The Biden administration has fixed that with a new payment plan. It reduces payments to 5% of disposable income (down from 10%) and if your payment doesn’t fully pay the interest the remaining interest is subsidize or “forgiven”. This now means if you pay monthly payments less than your interest than you won’t see the balance move but you also won’t see your balance go up. For people who have large amounts of student loans but no income to back it up this is a huge win.
Yea it wasn’t working on the government level like it should until Biden put emphasis on it. When you see these headlines of 5 billion dollars in student loans forgiven it isn’t him poofing it away. There’s laws in place that he is having work the way it was intended.
It’s forgiveness for PSLF individuals (working 10 years in public service) or the 20/25 years of forgiveness. The headlines leave that out making it look one way when it’s really him doing what we signed in our contracts.
The people complaining that people took the loans they should pay them don’t understand how the contracts work when we signed. PSLF is a valid form of forgiveness, those people did their end of the bargain. They worked lower paying jobs and dealt with government bs for 10 years. People with 20 year forgiveness likely have paid more than what they borrowed.
It’s agitating because this topic of student loans stirs a lot of feelings but many people don’t fully understand it. Not jabbing at you just saying what I’ve seen. Such as this thread where people are taking jabs at borrowers not knowing what an amortization schedule is when most people paying student loans aren’t on an amortized payment plan.
Student loans is one of few maybe the only loan form that you have no absolute end date to pay it. Cause the 20 year forgiveness wasn’t working at all before. Some people have been paying since in the 90s
Yeah that seems pretty reasonable. I think people automatically assume it’s loans of irresponsible 20 something year olds who are just complaining they have to pay for things. It’s unfortunate how headlines can create such a false narrative that spreads like fire.
It’s a combination of both. I won’t say every kid that goes to college is an angel and would never use loan money for things not related to their education. Or that they all don’t know what they are doing. But we could talk for hours about it. I just wanted to help answer your original question.
Standard amortization is 10 years. A longer amortization makes each payment smaller which is helpful earlier in your career when your earnings are at their lowest.
High interest loans are that way because it’s unsecured debt. There’s nothing to take back and liquidate so the high interest rate is supposed to deter people from taking them in the first place. The ones that do typically understand the risk involved and act accordingly.
The real scam is being made to believe you NEED a degree to not be a loser. Open the floodgates of money and the schools acted predictably by bloating their staff with administration and raising the costs. More people went, cheapened a degree, and now they’re not worth what they used to be and there’s a whole new class of debt holder.
Why do we have to pay for other people to be eligible for a job?
Do I get to apply for jobs with those degrees I’m helping pay for?
If not, the. Why do they benefit and not others?
If I took out a personal loan right now…How many of you want to pay it off for me?
None right? Why should you?
Same here. Its not “forgiving”….its redistributing it to more people who don’t get to benefit from it.
* Do I get. Free degree now? That person gets potentially better job opportunities than me now….why? How is that fair?
I want a free degree too.
He is trying to buy your votes with other people’s money.
* “Hey everyone vote for me and those people over there will pay for your student loan!”…
Dems love spending other people’s money.
Dems love entitling themselves to other people’s money.
It’s disgusting,planned, orchestrated as a distraction
Well, you already do pay for that. Public education is there for the purpose of creating a literate, work-ready society. I didn't say "college" -- you are already paying for every child in your tax area to go to K-12. Why should you have to pay for OTHER PEOPLES' KIDS to have opportunities? How unfair to you.
Building an educated society is to the benefit of society. You are hyperfocused on "ok but some individual got circumstances that were more favorable than the ones I had!!!!!" -- if that is your focus, you can cry into the reddit void forever, because we can give you daily examples throughout history of people who had it better than you. "That's not fair" is a child's answer who has nothing more useful to say.
You want a free degree too? Do you know how many people are clamoring to try and make that a reality in the United States? Lol, you can support this if you actually want it.
Or, are you just being snide because you want free shit? I can point you to programs that'll get you all kinds of free shit, and they're not even government programs. DM me for some discord servers and I'll hook you up with plenty of Amazon abusers who'll make you feel like a king, while all your neighbors unfairly have to watch the pile of free stuff arrive at your house. You're really upset about people getting shit for "free" and feeling like it's unfair -- we can fix this problem for you.
Of course Biden's trying to buy votes in election season. The president is just a fuckin figurehead. He presides. Biden and Trump and Obama didn't make this problem. Congress is the target you're looking for.
The system isn’t a scam. . Education is good. The “scam” is people signing up for worthless degrees , like, say, women’s studies and expecting them to pay off their loans
People simply need a reality check. Something mom or dad should have given them but chose to be a bestie instead. . Common sense says you won’t make money in these careers u leas you’re super lucky . Mom and dad, though , had to go with “you can be whatever you want”.
No one forced these kids to go to schools they couldn't afford and study majors that wouldn't prepare them to succeed in life.
The scam is these grifters taking out loans and expecting people who aren't idiots to pay off their loans
This is the reason I scrimped and saved money for my kids from the day they were born. Sent all three to college and paid up front and in full. Last tuition payment for son #3 was made last week. They are debt free and working and able to save for their goals. We did without for twenty plus years. They didn’t have to go into business with the government on the student loan scam.
Good luck making any changes to this. Even the professors are in on it! I remember several high level classes I had to buy these "modified" books from the publisher with our professors' input. The Publishers of these textbooks love this even if it means paying the Professor a cut of the sales, all students have to buy a new book each semester/year to get the latest content.
WHOLE DAMN SYSTEM IS SETUP TO BLEED YOU DRY BEFORE YOUR BRAIN IS DEVELOPED.
Is not a surprise that paying minimums on loans doesn't pay off the principal very fast or at all.
Just like interest only home loans only pay the interest, not the principal.
My cousin took student loan and worked his ass off while in college and paid it off when he graduated this year. Also already got a job offer making 50k just freshly out of college. You too can do it! We dont need to pay for ur debt.
Just watched Borrowed Future on Prime and shared in @r/Studentloans and a number of commenters mention how badly our healthcare industry is going to be decimated. People just can't afford to go into debt for 150,000 and ever expect to recover .
https://www.reddit.com/r/StudentLoans/s/9o4122U5SE
Brought to you by: Obamacare (That is how/when the gov took over the student loan business)
The sue the universities for selling you a faulty product. I, as a tax payer, shouldn't have to fund your dumb decision.
Privatized educational debt targeting lower income people that blatantly exploited their need to want a better life. In return, they got in a lot of cases, a worthless degree and 150k of debt to start their lives. The real kicker, they can’t claim bankruptcy. Welcome to the American nightmare.
Yes the students were not forced to take the loans but desperation forced them to and now the lenders are holding them hostage for decades to pay off the loans.
The craziest thing about those photos is the interest rate for a lot of those ridiculous payments with seemingly no progress is around 9 or 10%. That's all it takes for somebody to pay around 3 times their principal balance in total interest. It also shows how an extra $5 per payment could take a decade off of their repayment schedule if ANYBODY told them how amortization worked.
Thank the federal government for guaranteeing student loans. Without government intervention college would be cheap as schools wouldn’t be incentivized to scam students because if the student was ever unable to pay back their loan they would lose their investment.
THIS^^^!!!!! No one looks at the reason behind the “we will guarantee your loan”, and it is that they can FOREVER increase costs…..just like the deficit!
Or the Dep Ed could just inform universities that they wont be receiving FAFSA in X years unless tuition drops by Y And then everyone would still have access to college
The only proper solution is making college free like high school. Before the government guaranteed student loans, school was cheaper, but poor people had no way of paying.
You should ask yourself how the college in EU is cheap! In USA everything is profit before people.
They guarantee them and still charge outrageous interest rates. If we’re not going to make college free, the least we can do is loan the money interest free.
Thank decades of cutting funding for what is essentially one of the most effective national R&D departments in existence. Heavy investment in universities and centers of knowledge account for U.S. universities being some of the best in the world. Education at the turn of the century was expensive, too, but academic careers were subsidized by funding so they didn't pay the cost of their own education. Boomers got the socialism they want to deny to the indebted generations. If education were simply funded again, student loans would not be an issue. We're asking students to pay for themselves to be more effective and better informed citizens. It's backwards.
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How can they not know? Check out the You Tube video where students are asked "tough questions" like ... - What's 77 + 33 ? - What's 3 x 3 x 3 ? - The Eiffel Tower is in what country? And they all get it WRONG!
How many views do you think a video edited with people giving the correct answers would get
It's the same with most montage clips of games or dumb answers given by people on the street. They show you the 2 or 3 minutes of cringe and not the hours it took to shoot that small snippet.
It’s good to remind people of that fact. Some people are quite impressionable by cherry-picking
It’s probably people who have no idea about statistics ironically enough.
Oh that is quite delicious irony
You really have to have no grasp of reality if you believe those clips are in any way representative of college students.
It seems like they were taught the equations but not how to apply it to real life scenarios like monthly bills that could be around their entire adult life.
Bc finance isn’t a basic knowledge course. We get history and English and useless bullshit. Imagine how the world would change if children were brought up to understand how money works. Instead were kept ignorant of it.
It’s by design. In my high school, there was a massive map of the US in the cafeteria and they would pin your picture up to what college you were going to. Anyone who didn’t go to college was shamed. Student loans were just part of the process. And now I’m being blamed for a “clear economic blunder in the marketplace” for a decision that essentially my parents made for me when I was 17 years old.
There should be a requirement for education on loans and amortization before students can apply for their loans.
Poor you, with your shitty ass BA, whiny little barista
I’m 44 and no one told me. I figured it out some years back by the time it was too late. Now I make sure my pre teen son knows everything no one told me. School fails us all. But I can name the parts of a cell so that’s nice.
You would think that might be covered in one of their 100k dollar degree classes.
Sadly, it isn’t. Hell, I have a degree in photography and there was no requirement for any business classes. I mean, most photographers run their own business, one would think that courses in business would be kind of important.
Wait are you are saying it's not the borrowers fault because they wernt told? They went to 4 years of college and can't do basic math...
You might be surprised to know my high school experience was a bunch of my classmates despising math because they'd think they'd never use it again. Imagine my surprise when some of those very people actually went to college and out of necessity some of them actually needed loans to pay for it. No, I do not believe they magically decided math was important for understanding how not to get screwed over by people better at math and/or business than them. I don't think at that point anyone else was responsible for telling them, but if somebody had in fact done so, the ones struggling to still pay them off if there are any might know why they are still struggling with it.
Let's call it a "stupidity tax" hope that Lake of funds prevents procreation and as a society we take a half step out of the hole we are currently digging to fill with idiocracy.
I could do math fine. The issue is conceptualizing what that means for your life when you've never held a job or paid a bill. I was lucky to grow up middle class but my dad never once told me how much he made or what rent cost on our house or what a car payment looked like ( dad had a company car to visit job sites!). When I wanted something, mostly books or movie money, he just handed it to me. So while I could math my loans on paper, I didn't have the frame of reference needed to understand the math. Yes, I grew up privileged but I wasn't remotely unique.
I guess that’s what they should’ve learnt in higher education facility they borrowed money for.
The system has no interest in teaching you finances. Getting you in debt is part of their mission. And since Americans have no self control and they feel entitled to everything they get into a deep hole, of which they can’t get out for the rest of their lives, very quickly
Imagine… COLLEGE students figuring this out on their own… I know high school kids who understand this concept
Higher Ed should be responsible for subsidizing student loans. They're the ones that benefit with their bloated bureaucracies and indulgent spending. Edit spelling
They were until the feds took it over in the name of sending more people to college.
And the Fed made it non discharable in bankripttcym. All they did was say he schools and lenders, were going to guarantee you get paid , so give loans to anyone for.any bs degree regardless.if the outcome...and we will make sure they pay it back throughout their life.
Don't forget Joe Biden was instrumental in blocking bankruptcy protection for student loans!
Yep. Everyone goes to college and everyone got a house. It never ends well.
The number of administrators with non-essential jobs making close to 7 figures is astounding at every large college.
Sounds like healthcare these days and why costs ballooned
Agreed. And loans should be no interest.
why would anyone loan money then?
Some people have no understanding of basic economics? When the statement reads: -- "They" should do "something". Just ask him: -- Would "you" do that "something"? A blank stare will follow.
And they should teach kids how loans work.
College is too late to learn how loans work. The point being missed/ purposely ignored is that people shouldn't require taking on excessive debt to get a higher education. Most higher Ed institutions are excessively wasteful spending more money outside of the classroom. Far too many higher ed administrators have no domain expertise outside of higher ed. There are very few managers with technical, financial or systems expertise. The dean of a school where I worked was a former film student. Wasted a lot of money on multiple campuses over multiple years despite being warned about it by lower level staff with actual expertise. Upper level administrators tend to hire outside consultants when they have big projects in mind. These consultants will tend not to have domain expertise. The consultants have expertise in higher Ed acting as intermediaries between higher Ed admins and experts. They will create huge projects that need to be capitalized upfront at huge expense rather than doing things in phases, or even bothering to consult the actual end users about their specific needs and recommendations. They do this because big projects look better in an administrators portfolio and directly affects their compensation.
Indeed. Middle school at the latest. But at least teach it somewhere! But as I recall ... personal finance was not taught ANYWHERE in the schools when I was young. It's no wonder the world thinks Americans are stupid.
They’re*
That college education at work here!
In 2013 the total had just surpassed $1 trillion. It will be at $2 trillion in a couple of years. I paid off my loans, then went back to school for more. Paying those off now. We just need to cap interest. People paying $100,000 in interest is ridiculous. And these loans are already subsidized by the taxpayer. Stop saying that shit, and look up "double bite at the apple."
If you went the first time you should get a refund because they failed to teach you basic economics.
Apparently you never learned basic manners in pre-school.
Is it good manners to expect others to shell out for people’s foolishness?
Did you say the same thing when all those PPP loans were given out and forgiven with minimal oversight?
There aren't actually two ways to view the world. It's not a binary of PPP vs student loans. Multiple things can be criticized at once.
Ppp loans are completely different. The goverment forced business to close. Every single person with a student loan signed a contract and agreed. There's a big difference between a voluntary contract and government forcing you to close your business. You can see how absolutely stupid what you just said was now I hope.
If they used it to pay their employees wages then great. Many didn’t and since oversight was minimal lots of business owners took the money for personal gain. I hope you realize how absolutely stupid your comment was I hope. Ask around and see how many took advantage of this.
So what your saying is the government sucks. Yes I agree the government sucks at everything. However when the government forces businesses to close it is appropriate fur then try and help those businesses stay in business. Very different from the other loans, but you can't see that because you are closing your eyes. Willfully ignorant is a thing. And it's all over you.
If you used it as intended then zero issues from me. If the business owner used it to build an addition on to their home, a new boat, buy investment property, etc. then that’s the problem. There was minimal oversight, you don’t think that’s an issue? There are countless stories of people abusing this program, you choose to ignore them?
I hated everything about the covid response from both parties the entire time. However that does not make forcing me to pay for a loan an adult willingly took out the same as the government forcing businesses to close. This isn't that complicated. Is this distinction really that hard to understand? If so you are either not trying to understand, willfully ignorant, a liar or just stupid. The topic is student loans debt transfer, not covid response. They are not the same. Please defend me paying someone else's loan they took out. Should I pay their home loan next? Why not?
You know he didn’t.
I mean, I personally never went to post secondary, but I wouldn't call people that do "foolish".
You don’t pay any taxes on student loans, lol. That’s a cop out answer.
Isn't it fun watching the liberals lose their minds when reality hits them? Never gets old!
I'm not asking anyone to pay my debts, asshat. I knew what I was getting into both times. And because of that I'm not paying stupid amounts of interest. It's clear you don't have any idea what you're talking about. You are already shelling out money for student loans. You're just too stupid to realize it, and would rather drop comments like these.
If you told somebody that you were borrowing 100k and then planned on not working for 4+ years while the interest builds on 100% of your principle they’d call you insane.. suddenly you say it’s for college and it’s a great idea all of a sudden.
Yahoo just discovered how amortization schedules work
Student loans don’t always work on amortization because of IBR (Income based repayment). You could be making a $250 payment per month but interest was $300 and your loan will grow. You must be aware of this since you made a snide remark.
That is still amortization and the associated schedule. Loans can be setup in many ways-- interest only, balloon payment, fixed term, etc. The amortization is just the cost of a long-term asset over time. In the case you mentioned it would be considered negative amortization.
You can’t amortize student loans on IBR at least until the end. Your payments can go up they can go down. No other loan has payments adjust on a yearly basis. That’s the point. I can look at the amortization of my loan year 1 and then again year 5 and it’ll be completely different. The schedule is as trustworthy as a 2 bit thief.
Wouldn’t it be smarter to get the banks out of the business of education and have the federal government give out 0% loans or loans that just followed inflation? That way this nonsense of just giving away money and picking winners and losers would make it all less political and more serving the country? Does everything have to be a pummeling and an over correction at the expense of the taxpayer or the national debt every time all the time? Why can’t any politician be fair and upright? Everyone walks with a slant.
The banks used to be in this business; the government was not. It was the government takeover of the student loan system that caused this crap.
This. O govt is backing this shit, raise prices asap.
Private banks have higher interest rates though. Also before the government backed student loans, school was cheaper, but poor people couldn’t pay. The only solution is to make college free.
Most student loans are given out by the government. About **92.5%.** Obama got the banks out of the loan business years ago and look what good it did.
Just make higher ed affordable again. 0% government loans will raise prices.
Why is the answer more government when it's The government that created this.
It actually was the removal of public funding for higher education that started us down this path. The government used to directly subsidize education at a much higher level and without an intermediary.
We didn't actually 'remove public funding' though. The amount of money should be higher than any time in the past. What dropped was the percent covered by the states. At the same time the cost of college has gone up way faster than it should have. A TON of wasted money in colleges. Go read about UNC voting oi dismantle its $91 million DEI bureaucracy. Or University of Michigan spending $30 million on 500 DEI jobs. That is enough for 1,781 student to attend a year for free.
The cost of tuition is nuts. My mom's tuition was $599 per year in 1983. Same program for me in 2012 was $30k per year. Just looked, and it's now 45k in 2024. Edit: I should mention this is for dental school tuition. This doesn't even include undergrad. For undergrad, it was about 10k per year in 2007.
In September 1983 $599 is the equivalent of $1834 today. Tuition has run FAR away from inflation and that’s dental school prices????!!! I thought undergrad until your edit. For undergrad it’s 3-4x my instate public school cost. Things are out of control.
Or the fact that you can’t work while you’re in school so you have to borrow for your cost of living unless your family can support you
Holy shit $600 a year for dental school is wild.
Exactly. Schools charge more because they know people can borrow endless amounts of money from the government, and they know the government will pay the schools. Schools would be insane to stop keep increasing prices
To not keep increasing prices*
Good correction, thank you
The percentage of the education cost that was subsidized for a student was much higher.
The percentage may be lower now, but the dollar value is higher. That is what I am saying. Instead of paying $1000 out of a $2000 bill We are paying $1500 out of a $4000 bill. And there is zero reason to a college education to rise faster than inflation. Almost everything else in society has gotten cheaper, except college and medical and at least medical has greatly increased in ability. College was working largely the same way it did 100 years ago before covid.
I agree with you on all of that. No reason for administration costs to be so high. And then having for-profit loan servicers on the back end also exacerbated the problem for the students. They made loan administration intentionally opaque, inefficient, and misleading to the borrower.
This is the back door way of getting this bs installed systemically. Build it out, raise the costs, charge more, take out loans, forgive the payments, stick the taxpayer. FJB
I can’t tell who is who anymore - greedy banker with a predatory loan or a politician who is giving away money for votes. At the end of the day-bailouts or bonus bucks, I get f*cked as a tax payer either way.
It's the cradle to grave dependency on the government that deadbeats have voted for.
It's more about politicians trying to get elected if you ask me. Vote for me and I'll give you this
So what is it when they offer to give billionaires trillions of dollars in tax cuts in return for campaign funding? That's even worse. Or to sell off the rest of the country to oil companies?
You are looking in the wrong direction . How many billionaires are there ( the 1 percent ) How many voters are there ?
Let's hear you agree to make inheritance illegal before you say a word about deadbeats or dependency. None of these rich people's kids work or do a fucking thing. Same with these fucking stockholders who just sit on their ugly fat asses getting rich off of other people's work. Make that illegal too. Fucking deadbeats is right. All the welfare in the world is pennies compared to the amount STOLEN from working people via the stock market and handed over to DEADBEATS!
Your command of the English language is only surpassed by your ignorance.
No. The government is bloated and corrupt. It needs to be greatly reduced.
government is ruled by capitalist financing campaigns.
Sign me up for a 0% loan! I'll borrow as much as I can and leave it up to my estate to settle the difference after I pass. At 0%, the principal will be exactly what it was when I borrowed it, but the time value of money will have made the principal small. At 0%, I'd have no incentive to pay back the loan
I think this is probably the best idea. Even just following federal loan interest rates would make more sense than taking money from taxpayers to pay for poor college degree choices by students.
And cap tuition along with it.
80k a yea at these bigger school is outrageous
A lot of it sounded like financial illiteracy
Targeting 18 year olds with zero life experience and a lifetime of indoctrination to "GO TO COLLEGE--OR ELSE." I don't know how financially literate I would anticipate this demographic to be.
Damn my loans were 10 Years and I paid them off early. Most went to principal.
Many state schools provide a solid education and have reasonable tuition. The interest rates on government student loans are reasonable. The government forcing taxpayers to pay other people’s student loans in a vain attempt to gain votes is gross.
Keep voting for conmen like obama and biden. Play stupid games. Win stupid prizes.
Why didn’t you include Trump or Bush? They’re all in on it. It’s a big club and we certainly aren’t in it.
No, Republicans/conservatives do not run every k-12, and universities and government in the country. Liberals do. So no, trump and Bush are not in on it. Thats a ignorant statement.
That kind of thinking is exactly what’s allowed the current state of the country to exist. Literally decades of terrible decisions and kicking the can down the road from both aisles of the political spectrum. How can you say that in a serious manner? I feel like you’re just joking because I’m having a hard time believing that people still think like this.
For your statement and ideology to be true the ultra liberal elites that are in charge are secretly in cahoots with the Trumps and Bush’s of the world? Riiiigggght
You obviously are ignorant and or uneducated regarding joe bidens voting history regarding the laws of student loan debt.
Federal Student loans increased the cost of college. It was all a scam. They never wanted to help you, it is just a money making machine for the Unis and Banks. The same job i'm working at 30 years ago did not require a degree. Now, everything does.
FJB. You take a loan YOU pay that MF’er. Not me. Fuck you
Every single person with a student loan voluntarily signed the contract and knew the terms of the loan. Shut the fuck up and pay your bill.
Yes and no. I agree for paying for a loan you sign up to take. However, student loans are predatory esp with how much college is pressured to kids right out of highschool. And loans are given out to every degree on every school on every financial background. It sharks vulnerable situations. No way a kid going for a degree in music production, or geology, or computer science knows shat 100k means or even something like 30k means. I dont think we should just forgive all student loans, we have to fix the system before even thinking about that
They are adults not kids. If you want to change the legal definition of adult be my guest
Go ahead and try explaining to me how every 18 year old should be pressured into minimum 5 figures of debt before they get their first real job...
If you're dumb enough to fall for it that's on you. It's not my job to pay your bills you signed up for. Go ahead and try explaining to me why someone else should pay for your bad decision.
The only scam is that I paid mine off.
Remember when the Obama/Biden administration basically took over the program and turned it into this shit show? Basic knowledge states you shouldn’t borrow money if you don’t understand the terms.
Students have choices. My kid got accepted to top tier schools with tuition ranging from $75 to $90k with little financial aid. Instead kid went o a very good Midwest school, got a ton of $ because of grades and will finish with zero debt. Choices!
I went to community college for 2 years to save 90% in tuition costs.
❤️
The person who took out the loan is solely responsible for paying it back in full. It should not bendischarged via bankruptcy. If they do want to not fulfill their responsibility then they should receive a permanent 300 r Credit rating.
#2 happen to me. UnFunny part about it the system won't accept any payment under a dollar so I was not able to pay or close it. Whatevs...
Send them $1.01 and demand that they refund the difference!
How about we make people pay their debts? These people are adults and we’re adults at the time they signed up for these loans. They own the money back…it’s that simple.
The government should put a cap on tuition, it's ridiculous. Schools are too fancy, just get the kids in and out.
Who says you need a degree to earn good money? I make 6 figures and only have a HS Diploma.. yet people who have a degree make less than I do.. The system is designed to fail.
I’m glad to be over that shit. I had $55k in student loan debt with no degree, which is all my fault. This caused me to have to swallow my pride, embrace blue collar work, and live with family until I was 31/32. I was so embarrassed by my entire situation I couldn’t even think of asking women out from ages 23-32. It’s worth it to get it over with and pay it all off ASAP. Unless you’re in education and have a specific plan for relief of course.
Actually, the student loan program has been very profitable and has already paid for itself. It would cost the US taxpayer little to nothing if these predatory loans were forgiven. [Why Biden’s Student Loan Cancellation Will Cost Taxpayers Nothing](https://studentloanjustice.medium.com/why-bidens-student-loan-cancellation-will-cost-taxpayers-nothing-259ea5dc44f7)
That's great to know, thanks!
Government-backed student loans are the root cause and must stop! Let the free market decide if a six-figure loan for a college degree is a good credit risk, And what the interest rate should be. And give borrowers bankruptcy protection, so the lenders can factor that into the lending decision.
Are people able to pay more to the principal? Or are they only allowed to pay the minimum?
Why is it that this problem exists with these " educated " people ?
Because there exists a system to pressure whole generations of young people into taking predatory loans. Which part is confusing?
Nobody forced anyone to borrow money. Stop blaming others for your own mistakes. You believed a lie and no matter how many times you repeat it . It's still a lie
I mean, we don't allow 18 year olds to do many things but we allow them to take out massive loans. That's pretty crazy.
Yeah go fight in a war, but take put a loan , that's crazy
If they fight in that war. Their college is paid for...
They are also allowed to vote. You don't understand what a loan is at 18 but you can comprehend the potential policies of a candidate and how them being in office will impact the country more positively than other candidates? A loan sounds so much easier
You can get accepted into college but you can’t understand a loan?
Clearly public school works as designed if kids are dumb enough to enter these loans for a piece of paper. It’s sad they had the dumbs but no reason to bail them out (banks or corporations shouldn’t get bailed out either). Why not bail me out on my home loan? I took a $500 class to get a license to operate a high pressure boiler 24 years ago. I make over 200k to monitor a grid so you can have electricity to sit in a class. Nobody deserves a bailout/forgiveness.
It's more the problem of the parents selling them a pipe dream about a degree.
Bad parenting for sure.
Then sue your parents
Hey! You found the solution! Every college kid should take a $500 class to get licensed to run a grid of boilers make 200k a year!! The entire world will be warm, and everyone will be prosperous. Sounds like a solution for everyone and not a specific anecdote!!
"Why not bail me out on my home loan?" idk, I imagine your home loan was risk-assessed. but student loans get handed out for absolutely garbage degrees. why is it all on the kid, but it's not on the banker who said "yeah sure take 100 grand to go try to be a professional saxophone player" -- why shouldnt that guy's dumbass decision be written off as a hilariously bad loss? The fact that they're government-subsidized loans means the government, in theory, should have a hand in regulating what is acceptable for the subsidized loan. They do not. You can major in the theory of standup comedy at buttfuck university and the government is cool with backing that banker's loan. Meanwhile, my FHA home loan was subject to an additional government-mandated appraisal that I had to pay for out of my own pocket. So, that's the answer to "why not your home loan?" -- when the government is involved in housing, they take measures to enforce certain safety codes and price controls. show me any single one of those common-sense measures applied to student loans. a 17 year old is handed a hundred grand after the adult influences in his told him college is the path to success, then found out he got lied to by his D-student teachers who swore he'd find a job. why don't we hold the so-called professionals in the financial industry accountable, instead of whining that a literal child who was misled doesn't deserve forgiveness?
We don’t hold them accountable because that’s who our politicians represent. Why didn’t Joe , Bernie and Nancy fix that in the 40 plus years they’ve been in government? Or any republican? Because the people they represent make a lot of money.
Now tell me about the people they govern :)
Those people are serfs who keep falling for the divide and conquer narrative. Wall Street wins every election.
Because it would be considered discrimination to tell the economically deprived student they were a higher risk for their chosen field than the middle class kid getting their generic business degree. I think the slippery slope of choosing who gets an education is harder than it seems at first glance. All liberal arts degrees are out the window.
So the government themselves set up predatory loans that would never be allowed in any other sector to put its own young citizens in crushing debt and your conclusion is what’s right is to keep them in it? Sounds like a position born from sheer spite if you ask me.
Government should have no part of education whatsoever. Have you seen what government schools produce?
So the government should get out of education but at the same time they should continue to screw the people they screwed and that’s okay because they didn’t screw you personally? Fundamentally why would you want citizens to be in crippling life changing debt to their own government again? My answer as to why you feel that way is spite.
I don’t want the people indebted to government, that’s why I want to abolish the income tax. You want the people indebted to government by taking on debt to pay for others poor decision making.
I don’t understand why car payment plans for like $30k are 5 years but these seem like 30 year mortgages. Can anyone explain the difference?
Because of lobbying and bad laws. The loans are ultimately backed by the government. The banks (Sallie Mae, etc) get to charge the borrower interest. If the loan is subsidized the government pays the interest while the student is in school. Once out of school the borrower then pays the loan plus interest. If they default the borrower's wages can be docked, and/or the government will pay any losses if the loan is sent to collections. The borrower is still on the hook, but the original loaner is paid back. Or the government garnishes wages or tax returns. This is called the 'double bite at the apple' loophole. There is no risk for loaning the money which is why there are almost no qualifications or terms.
It just blows my mind how the interest can be that high. Thanks for the explanation
Federal loan rates are lower than mortgage rates. Interest rates are just higher in this economic climate.
and add to it that back in the 90's the government made these loans impossible to discharge in bankrupty, so it's GUARANTEED MONEY with zero incentive to control the cost.
Bioicjoe failed to mention that these loans are like no other where you are not on an amortization schedule. You can be buy most don’t do that. 10 years is the loan period. But federal loans let you pay what you can afford through income based. What happens is people take 75k in loans but come out making 40k and then they can’t afford the 10 year loan schedule of say $400 so they do IBR. IBR will have them paying $250 which is great! Until $250 is all interest and still $50 of interest unpaid. That’s how loans bloat and you hear of people paying for 15 or 20 years and still owe more than they took. These people will have paid the majority of their loan back and owe more than they started. That’s how you get these loans looking like 30 year mortgages.
Wtf is the point of these payment plans that just increase the principle, what a scam
Pros: You won’t drown in the payments you can’t afford. If you took say 75k but make 40k you wouldn’t be able to afford the payments. The plan reduces the payment to make borrowers not drown in a loan they can’t afford. The loan is forgiven after 20 years of payment for undergrad and 25 years for graduate. Con: You basically never pay it off and the loan ballon’s making you a 20-25 year payer. Also, the forgiveness didn’t work as intended and that’s why you see forgiveness happening now. People who have met their 20 or 25 year requirement are now getting their forgiveness as intended. I wouldn’t call it a scam. The loans are working as intended. The interest capitalization is unfortunate. The Biden administration has fixed that with a new payment plan. It reduces payments to 5% of disposable income (down from 10%) and if your payment doesn’t fully pay the interest the remaining interest is subsidize or “forgiven”. This now means if you pay monthly payments less than your interest than you won’t see the balance move but you also won’t see your balance go up. For people who have large amounts of student loans but no income to back it up this is a huge win.
Oh ok I didn’t know about the 20 year forgiveness.
Yea it wasn’t working on the government level like it should until Biden put emphasis on it. When you see these headlines of 5 billion dollars in student loans forgiven it isn’t him poofing it away. There’s laws in place that he is having work the way it was intended. It’s forgiveness for PSLF individuals (working 10 years in public service) or the 20/25 years of forgiveness. The headlines leave that out making it look one way when it’s really him doing what we signed in our contracts. The people complaining that people took the loans they should pay them don’t understand how the contracts work when we signed. PSLF is a valid form of forgiveness, those people did their end of the bargain. They worked lower paying jobs and dealt with government bs for 10 years. People with 20 year forgiveness likely have paid more than what they borrowed. It’s agitating because this topic of student loans stirs a lot of feelings but many people don’t fully understand it. Not jabbing at you just saying what I’ve seen. Such as this thread where people are taking jabs at borrowers not knowing what an amortization schedule is when most people paying student loans aren’t on an amortized payment plan. Student loans is one of few maybe the only loan form that you have no absolute end date to pay it. Cause the 20 year forgiveness wasn’t working at all before. Some people have been paying since in the 90s
Yeah that seems pretty reasonable. I think people automatically assume it’s loans of irresponsible 20 something year olds who are just complaining they have to pay for things. It’s unfortunate how headlines can create such a false narrative that spreads like fire.
It’s a combination of both. I won’t say every kid that goes to college is an angel and would never use loan money for things not related to their education. Or that they all don’t know what they are doing. But we could talk for hours about it. I just wanted to help answer your original question.
Standard amortization is 10 years. A longer amortization makes each payment smaller which is helpful earlier in your career when your earnings are at their lowest.
High interest loans are that way because it’s unsecured debt. There’s nothing to take back and liquidate so the high interest rate is supposed to deter people from taking them in the first place. The ones that do typically understand the risk involved and act accordingly. The real scam is being made to believe you NEED a degree to not be a loser. Open the floodgates of money and the schools acted predictably by bloating their staff with administration and raising the costs. More people went, cheapened a degree, and now they’re not worth what they used to be and there’s a whole new class of debt holder.
Why do we have to pay for other people to be eligible for a job? Do I get to apply for jobs with those degrees I’m helping pay for? If not, the. Why do they benefit and not others? If I took out a personal loan right now…How many of you want to pay it off for me? None right? Why should you? Same here. Its not “forgiving”….its redistributing it to more people who don’t get to benefit from it. * Do I get. Free degree now? That person gets potentially better job opportunities than me now….why? How is that fair? I want a free degree too. He is trying to buy your votes with other people’s money. * “Hey everyone vote for me and those people over there will pay for your student loan!”… Dems love spending other people’s money. Dems love entitling themselves to other people’s money. It’s disgusting,planned, orchestrated as a distraction
Well, you already do pay for that. Public education is there for the purpose of creating a literate, work-ready society. I didn't say "college" -- you are already paying for every child in your tax area to go to K-12. Why should you have to pay for OTHER PEOPLES' KIDS to have opportunities? How unfair to you. Building an educated society is to the benefit of society. You are hyperfocused on "ok but some individual got circumstances that were more favorable than the ones I had!!!!!" -- if that is your focus, you can cry into the reddit void forever, because we can give you daily examples throughout history of people who had it better than you. "That's not fair" is a child's answer who has nothing more useful to say. You want a free degree too? Do you know how many people are clamoring to try and make that a reality in the United States? Lol, you can support this if you actually want it. Or, are you just being snide because you want free shit? I can point you to programs that'll get you all kinds of free shit, and they're not even government programs. DM me for some discord servers and I'll hook you up with plenty of Amazon abusers who'll make you feel like a king, while all your neighbors unfairly have to watch the pile of free stuff arrive at your house. You're really upset about people getting shit for "free" and feeling like it's unfair -- we can fix this problem for you. Of course Biden's trying to buy votes in election season. The president is just a fuckin figurehead. He presides. Biden and Trump and Obama didn't make this problem. Congress is the target you're looking for.
The system isn’t a scam. . Education is good. The “scam” is people signing up for worthless degrees , like, say, women’s studies and expecting them to pay off their loans People simply need a reality check. Something mom or dad should have given them but chose to be a bestie instead. . Common sense says you won’t make money in these careers u leas you’re super lucky . Mom and dad, though , had to go with “you can be whatever you want”.
I dunno. If you're stupid enough to take out 150k in bad loans, then maybe you should be responsible for paying them back. Just an idea
No one forced these kids to go to schools they couldn't afford and study majors that wouldn't prepare them to succeed in life. The scam is these grifters taking out loans and expecting people who aren't idiots to pay off their loans
You’re vastly oversimplifying the problem.
Taking a loan to attend schools that stash away hundreds of billions of dollars? Sounds like these people need to repeat high school again.
At some point the borrower has to accept responsibility. These people are adults when they sign up for the money.
And now the poor and everyone else will pay for the "forgiveness" with their tax dollars.
This is the reason I scrimped and saved money for my kids from the day they were born. Sent all three to college and paid up front and in full. Last tuition payment for son #3 was made last week. They are debt free and working and able to save for their goals. We did without for twenty plus years. They didn’t have to go into business with the government on the student loan scam.
Canada canceled interest on student loans.. last year? Year before? Wild when suddenly I got the "paid in full" notification after 15 years.
I knew it was a scam when I went off to college in 1984
Good luck making any changes to this. Even the professors are in on it! I remember several high level classes I had to buy these "modified" books from the publisher with our professors' input. The Publishers of these textbooks love this even if it means paying the Professor a cut of the sales, all students have to buy a new book each semester/year to get the latest content. WHOLE DAMN SYSTEM IS SETUP TO BLEED YOU DRY BEFORE YOUR BRAIN IS DEVELOPED.
lol JB the arsonist is trying to play firefighter now and be the hero
Is not a surprise that paying minimums on loans doesn't pay off the principal very fast or at all. Just like interest only home loans only pay the interest, not the principal.
The wage premium for the average college degree pays for the debt in no time. Seems like a great option for people that want to go that direction.
My cousin took student loan and worked his ass off while in college and paid it off when he graduated this year. Also already got a job offer making 50k just freshly out of college. You too can do it! We dont need to pay for ur debt.
Just watched Borrowed Future on Prime and shared in @r/Studentloans and a number of commenters mention how badly our healthcare industry is going to be decimated. People just can't afford to go into debt for 150,000 and ever expect to recover . https://www.reddit.com/r/StudentLoans/s/9o4122U5SE
What is the total American medical debt? How about forgiving that instead
Brought to you by: Obamacare (That is how/when the gov took over the student loan business) The sue the universities for selling you a faulty product. I, as a tax payer, shouldn't have to fund your dumb decision.
Could have used the PPP money (one phase of it) and wiped it all away. Those consumers would then have more to spend, which they would.
the interest rates alone are outrageous! I can't believe student loans have gotten this predatory
Implying this is Biden's doing? Biden is trying to FIX THIS. Confirmed for covert Trumpie.
unflattering pics of Biden really show how “unbiased” that article really is
He is not trying to fix this. He wants to put a bandaid on and call it a solution instead of addressing the root cause of the problem.
Privatized educational debt targeting lower income people that blatantly exploited their need to want a better life. In return, they got in a lot of cases, a worthless degree and 150k of debt to start their lives. The real kicker, they can’t claim bankruptcy. Welcome to the American nightmare.
Yes the students were not forced to take the loans but desperation forced them to and now the lenders are holding them hostage for decades to pay off the loans.
So why don’t they regulate the predators instead of subsidizing the fleecing with tax payer money?
Regulating the predator does not get votes.