re: Student Loan payback

quote:

---

They are, but they bake the interest in so there is no advantage for paying them off early.

---

Please google a loan amortization spreadsheet/tool/calculator. Amortization essentially takes a term of months and determines a finite number of payments consisting of principal (your actual loan amount) and interest (the fee charged for loaning you the money). While the loan payment per month is the same, the payments incrementally payback more principal and less interest each month to where the last payment finishes off the principal (i.e. the interest every month reduces because the principal reduced the month before).

This basic premise was lost on those who didn't pay while there was no interest. Just paying their typical payment would have retired possibly a few extra thousand dollars; had they increased their payment, it could have been more. All that extra principal paid back would have meant a shorter loan term or possibly a reduced payment if it were refinanced.

Now the financially illiterate who are apparently smart enough to go to college and vote and tell the world how it's doing everything wrong but not smart enough to seek out financial knowledge on their own are playing the victim card. Bollocks.

quote:

---

There seems to be a fundamental misunderstanding by many how loans (including student loans) work. People really need to educate themselves. I’m not even sure some parents are equipped to teach their kids.

---

Everyone

has

a

phone

quote:

---

Instead they paused it and 1% made payments (smart people) and everyone else got lazy, like usual.

---

I know too many people that were working full-time with no children who viewed the pause as extra money in their pocket. They acted like the loan went away.

quote:

---

You keep saying this, but that's not how it works.

---

Dude wants just wants some 0% interest loans he can payback whenever he feels like it

quote:

---

And they are going to college? Maybe we should rethink this.

You are an adult. Be one.

---

Right. 18 is apparently old enough to enlist in service and potentially die in war but not old enough to understand what a loan is and how it works

If you refi'd during Covid like I did, you would have a rate in the 2s. Mistake by you.

quote:

---

And the payments firing back up this month is going to throw even more cold water on the economy.

---

Good. It will slow down inflation for the rest of us

quote:

---

You're a bum

I bet you like to bitch when you see someone whip out a LA purchase card at the grocery store, though.

---

I could never write what that person just wrote.

"Have not paid and do not intend to pay it back"

This is the current college graduate in America.

Incredible digression of Americans.

quote:

---

Understand. I don’t disagree they need to be paid back. It’s just frustrating bc the gov literally hands out money. Not just for tuition. But to rent apartments, etc. It should be tuition only, with the kid / parents paying the fees, dorms, food, etc. There has to be a better way. I know. The kids need to read and they attend financial counseling. But it’s really bad counseling. And when one is 18 and starry-eyed about college and earning a degree and making a successful life, none of that matters. They see money and the chance to go. My frustration is the billions wasted on foreigners and other stupid things and their pet projects.

---

Yes, but the answer isn't let's do more stupidity because we are rife with stupidity. It needs to be reigned in across the board.

As for college, loaning for it should be underwritten like any other loan. If they granted student loans the way they do business loans and mortgages, we'd be in a lot better shape though with far fewer kids going to college.

Let’s see, you get out of high school, you can’t get a loan for a $350,000 house. But you can get a $350,000 student loan. See how this works.

Want to tell us your major?