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Student loans are federally backed and can't be eliminated in bankruptcy which means they are pretty much the safest loan a bank can put out. Since loan rates are largely based on risk I see no reason why rates shouldn't be the standard rate of inflation (as they are long term) plus 0.5-1% so the banks continue to make money on the loans. 2.5-3% should be the standard student loan rate max. These student loans at 6%+ are outrageous. I don't have much in the way of student loans, and luckily they haven't impacted my life much. I own a home, have nice things, and get to enjoy life with little debt. Just the same, lowering my rates from 6.5% to 2.5% would give me almost an extra $100 in my pocket each month, and since my student loans would only be 2.5% I'd be in no rush to pay them off faster.. That extra $100 a month would either go right back to stimulating the economy with purchases, or into the stock market as investments.
I also feel that once a borrower has paid back 2 times the original loan cost the loan should be eliminated. If a student has $100k in student loans, and they're on income based repayment paying $750 a month they'll have paid $200,000 after 22 years.. Whatever is left on the loan should be completely eliminated at that point, and they SHOULD NOT have to pay income tax on that forgiven amount.. The bank made back their money ($50k over standard inflation rate), and the government made their money on the bank's profits.
I feel these changes would greatly impact our economy for the positive, and I'm a republican.
Where are you seeing student loans in the 6+% range?
Student loans are federally backed and can't be eliminated in bankruptcy which means they are pretty much the safest loan a bank can put out. Since loan rates are largely based on risk I see no reason why rates shouldn't be the standard rate of inflation (as they are long term) plus 0.5-1% so the banks continue to make money on the loans.
"Federally backed" loans are a direct loan from the Department of Education. No banks involved.
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2.5-3% should be the standard student loan rate max. These student loans at 6%+ are outrageous.
Federal student loans for undergraduate degrees are locked at 4.29%. The only loans over 6% are graduate/"professional student" loans (which Bernie's plan doesn't cover) and private loans, which aren't backed by the Government and are dischargeable in bankruptcy court, and therefore are no different than any other unsecured signature loan.
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I don't have much in the way of student loans, and luckily they haven't impacted my life much. I own a home, have nice things, and get to enjoy life with little debt. Just the same, lowering my rates from 6.5% to 2.5% would give me almost an extra $100 in my pocket each month, and since my student loans would only be 2.5% I'd be in no rush to pay them off faster.. That extra $100 a month would either go right back to stimulating the economy with purchases, or into the stock market as investments.
I don't disagree with any of this in principle.
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I also feel that once a borrower has paid back 2 times the original loan cost the loan should be eliminated. If a student has $100k in student loans, and they're on income based repayment paying $750 a month they'll have paid $200,000 after 22 years.. Whatever is left on the loan should be completely eliminated at that point, and they SHOULD NOT have to pay income tax on that forgiven amount.. The bank made back their money ($50k over standard inflation rate), and the government made their money on the bank's profits.
If a someone with more than $100K in student loans doesn't end up with a career that will allow that person to pay the loans off in a reasonable amount of time (pretty much a doctor), the individual over-borrowed and deserves whatever happens to him.
One of my sons was in college during this time of easy student loan money. He worked his way through his undergraduate studies, and between what he earned and what we (his parents) paid, he spent the first four years debt free. He took out a small loan to get through grad school, and between what he earned and what he borrowed, he got out of grad school with a small and manageable debt.
He lived off campus while in school and I visited on a number of occasions. He and his room-mates (and other friends of his that I met) lived much better than I did when I was in college back in the day. Most of his friends didn't have jobs. Most of them took more than four years to get a four year degree. A whole lot of parties, a whole lot of loan money, a whole lot of credit card use (credit card companies hit campus regularly). For most, there was no need to get a job and no pressure to get in and out of school as quickly as possible because they had plenty of borrowed money to live on.
When I was in school I was desperately poor and ate more Ramen Noodle, ham sandwiches on white bread, and frozen pink lemonade that I care to recall. Pretty much everyone I knew in school was poor and struggling.
Nobody put a gun to these kids heads and forced them to take out student loans. Nobody forced them to take more money than they needed. Nobody forced them to major in stupid sh*t where they had no chance of getting a job when they were done. Nobody forced them to get a credit card when they had no legitimate source of income. And now they don't want to pay back the money they willingly signed on the dotted line to get. Suck it up kiddies. It's your debt. You own it.
Agreed 100%. I, too, worked my way through school, in addition to serving my country. Not one single cent went towards a new car, the latest phone, parties and pizza every Friday night. If I never see another package of Top Ramen, it will be too soon.
You're right, no one forced anyone to take those loans. They signed the forms agreeing to repay those loans...now they want someone else to pay for those loans. Sorry if their degree in philosophy only landed them a job working in a restaurant, but that's their own fault.
The above is a very sad testiment to the state of US politics. People vote based not on what freedoms they can secure, but what treats they can secure.
This is why only property owners, vets, or active duty military should be able to vote. Everyone else is looking upon thier government as a piggy bank to be robbed.
When did citizens become convinced that they are entitled to the assets of other citizens?
If the founding fathers of this country could return for a day to see the sad state of our current politics, they would probably just shake their heads in disbelief. They might even feel a little sick to their stomachs. Once upon a time, Americans valued freedom and personal responsibility. Now, it's all about voting for the candidate who will give the most free goodies. Gimme gimme gimme!
If the founding fathers of this country could return for a day to see the sad state of our current politics, they would probably just shake their heads in disbelief. They might even feel a little sick to their stomachs. Once upon a time, Americans valued freedom and personal responsibility. Now, it's all about voting for the candidate who will give the most free goodies. Gimme gimme gimme!
I wonder if the founding fathers would say to themselves, "We failed. Look what this country and government has become. We have failed." I would pat Washington on the shoulder and tell him not to be so hard on himself. I think every great society goes through phases before its eventual destruction. Maybe it's unavoidable. You begin with revolutionaries, who value freedom and will do anything to defend it, because they came from a country with a large, bloated government and a liberal class of citizens who want to vote themselves a piece of the treasury.
Eventually they give way to a more pacified class who agree to increase the size of government, in exchange for certain securities. And that process just continues until you get a class of comfortably dumb citizens, who know nothing about politics or current events. And they don't particularly care about bettering themselves. They just want free stuff, and they'll vote for whoever seems the most likely to deliver. That's basically where we are now.
02-15-2016, 06:01 PM
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Originally Posted by atltechdude
A lot of younger people are supporting Sanders, myself included. Just understand that he won't be getting rid of your debt.
He's not going to wipe it out, but he may very well manage to get something through, like going back to how interest rates were determined prior to 2007. That's an enormous win for everyone who has outstanding student debt.
Free public college isn't likely, but increased Pell grants, work study, etc are doable. Free community college isn't entirely off the table.
There are states that have managed to offer free tuition to qualified students. I didn't have to pay a penny in tuition as an undergrad thanks to a state program. University and private scholarships covered everything else and actually sent me a pretty nice check every semester. It's not that it's undoable, but it needs to be done responsibly and it has to be a priority. That's not likely to happen without a massive change in congress.
"Federally backed" loans are a direct loan from the Department of Education. No banks involved.
Federal student loans for undergraduate degrees are locked at 4.29%. The only loans over 6% are graduate/"professional student" loans (which Bernie's plan doesn't cover) and private loans, which aren't backed by the Government and are dischargeable in bankruptcy court, and therefore are no different than any other unsecured signature loan.
I don't disagree with any of this in principle.
If a someone with more than $100K in student loans doesn't end up with a career that will allow that person to pay the loans off in a reasonable amount of time (pretty much a doctor), the individual over-borrowed and deserves whatever happens to him.
If I never see another package of Top Ramen, it will be too soon.
You too? I couldn't look at Ramen for 20 years after college. Then one day I was reading that book Memoirs of a Geisha. One mention in the book about a noodle vendor on a street corner and I suddenly had a craving for Ramen. Still don't eat it much, but at least i can stomach it again.
Ramen was 5 for a $1 (and sometimes they had a sale and you could get 10 for $1). Three loaves of white bread for a dollar. One pound of ham for $2. Three cans of frozen pink lemonade for $1. Stole condiments from the school cafeteria (yes I stole..........so sue me). Those were my staple foods all through school.
You too? I couldn't look at Ramen for 20 years after college. Then one day I was reading that book Memoirs of a Geisha. One mention in the book about a noodle vendor on a street corner and I suddenly had a craving for Ramen. Still don't eat it much, but at least i can stomach it again.
Ramen was 5 for a $1 (and sometimes they had a sale and you could get 10 for $1). Three loaves of white bread for a dollar. One pound of ham for $2. Three cans of frozen pink lemonade for $1. Stole condiments from the school cafeteria (yes I stole..........so sue me). Those were my staple foods all through school.
Hasn't been 20 years for me yet, but I'm sure I'll last that long. Have had roommates tell me, "Oh just try it with this egg and veggies" or "try it with this peanut butter, it tastes like Thai..." NO!
Ham was a luxury...you were one of the "haves". (hahahaha)
Top Ramen was 4 for $1 and sometimes the generic mac n cheese was 10 for $1...but who could afford the milk? (Trust me, with water, it's horrid.) I also did those little Kool-Aid packets for 10 cents, and would do the old fashioned, "borrow a cup of sugar" from the neighbor. Then I'd drink it halfway, refill with water, drink halfway, refill with water, repeat until my "Kool-Aid" looked like barely tinted water.
And I know what you mean about condiments and napkins! I took a lot of extra napkins with the claim, "I'm a messy eater".
One of my jobs was as an under cover store security in grocery stores around the city. I would follow those I caught shop lifting to checkout. I call it the worst job I ever had not because of the job, that was easy, but because it was horrible being surrounded by all of that delicious food that I could never afford. I've had those feelings of, "This is such bull, this is not fair that I can't even have a decent fricken meal". I know that feeling...but in the end, I got my education, I didn't owe anyone anything, and I'm proud that I made it through everything that I did. People can call me all kinds of things, but they will never take that from me - I proved to myself that I could endure just about anything.
It builds character not to have everything handed to you, and it can definitely humble you. Going through it sucked but it is doable, and having that experience is why I'm so against hand outs for those who can do it, they just don't want to...too bad.
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