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If you want it to be treated like any other unsecured debt, then give up the low interest rates and forget about getting approved to borrow enormous sums of money with no income.
Student loans are treated differently because they are different. People who don't pay them back whine about the downsides of student loans compared to other unsecured debts, but like to gloss over the up sides, like not paying 25% interest and, well, being able to get the loan at all.
Oh, what a crock. Student loan interest rates, until the recent readjustment (which will be counterproductive in the long run), ran at 6.8-7.9% for most loans. Certain subsidized Stafford loans were as low as 3.4%, but in all cases you are talking about similar interest rates to mortgages and even car loans. That's not even taking into account the one-time origination fees equal to 1-3% of the loan's value.
Now, I get that these are "unsecured", except that they really aren't in the same way as credit cards. They are secured by the increased earning capacity projections of college graduates. Even though projections of future returns have declined on enrolling students in college, it certainly justifies a lower rate.
Of course, the fact that we in America allow credit card companies to charge usurious rates (i.e. over 12% APR) is an absolutely putrescent reflection of our fact-free obsession with notions of personal responsibility and bootstrapping in the face of reality. What reality? That poorer individuals overwhelmingly suffer under these burdens of high-interest debt. I love how the response is to double down and punish those who grow up poorer and need loans to attend college, and punish them EVEN MORE harshly.
I used to be a moderate. I voted for Bush in 2004 (as much as I regret it), but I was young and I didn't understand the statistical realities of low upward mobility, of debt traps, of how the notion of "pulling yourself up" or "being responsible" all pretend that there are no pre-existing inequalities and disadvantages nor that luck is real. As time goes on and I see how little empathy or recognition most Americans have, or how little free will actually plays into things, I become more and more angry, marginalized, and radicalized.
Student loan forgiveness programs aren't out of control, student loan debt and our hyper-individualist society is what is out of control.
Oh, what a crock. Student loan interest rates, until the recent readjustment (which will be counterproductive in the long run), ran at 6.8-7.9% for most loans. Certain subsidized Stafford loans were as low as 3.4%, but in all casesyou are talking about similar interest rates to mortgages and even car loans. .
Oh, what a crock. Student loan interest rates, until the recent readjustment (which will be counterproductive in the long run), ran at 6.8-7.9% for most loans. Certain subsidized Stafford loans were as low as 3.4%, but in all cases you are talking about similar interest rates to mortgages and even car loans. That's not even taking into account the one-time origination fees equal to 1-3% of the loan's value.
Now, I get that these are "unsecured", except that they really aren't in the same way as credit cards. They are secured by the increased earning capacity projections of college graduates. Even though projections of future returns have declined on enrolling students in college, it certainly justifies a lower rate.
Of course, the fact that we in America allow credit card companies to charge usurious rates (i.e. over 12% APR) is an absolutely putrescent reflection of our fact-free obsession with notions of personal responsibility and bootstrapping in the face of reality. What reality? That poorer individuals overwhelmingly suffer under these burdens of high-interest debt. I love how the response is to double down and punish those who grow up poorer and need loans to attend college, and punish them EVEN MORE harshly.
I used to be a moderate. I voted for Bush in 2004 (as much as I regret it), but I was young and I didn't understand the statistical realities of low upward mobility, of debt traps, of how the notion of "pulling yourself up" or "being responsible" all pretend that there are no pre-existing inequalities and disadvantages nor that luck is real. As time goes on and I see how little empathy or recognition most Americans have, or how little free will actually plays into things, I become more and more angry, marginalized, and radicalized.
Student loan forgiveness programs aren't out of control, student loan debt and our hyper-individualist society is what is out of control.
The true interest rates would be much higher than 8% and please don't compare student loans with car loans or mortgages. They are unsecured and future income is irrelevant because income doesn't repay loans. Usurious rates? Come on interest rates on credit cards mean zilch if you pay them off every month
... I was young and I didn't understand the statistical realities of low upward mobility...
Both upward & downward mobility in the USA are actually quite a bit more likely than most everywhere else. There is quite a bit of movement between, say, the top quintile & the next one down, and between the 2nd and 3rd quintiles, etc.
Successful businesses (wealth) created -- and destroyed -- multiple times within a career are more common than most think.
Last edited by SportyandMisty; 05-05-2014 at 07:43 PM..
In the US, 41% of adults have some post-secondary education. Per the OECD, that puts us in the top ten among their 34 member countries -- between #1 Canada at 50% and #10 Finland at 37%. So we do send a healthy cohort on into higher ed, but not something that is out of line with what other wealthy countries are doing. We can't afford NOT to play at that level. The only question is how to pay for it.
Both upward & downward mobility in the USA are actually quite a bit more likely than most everywhere else. There is quite a bit of movement between, say, the top quintile & the next one down, and between the 2nd and 3rd quintiles, etc.
Successful businesses (wealth) created -- and destroyed -- multiple times within a career are more common than most think.
You are not being totally honest, and your selective use of stats betrays you. The bottom 20% - those who are in poverty and need the most help - have the least mobility. Movement between the 2nd and 3rd quintiles is unsurprising since beyond about the 30th percentile there is a pretty steady "plateau" of income, and those who have at least a modest household income can save some money; those who don't can't save a dime (thus decreasing their opportunities for job growth, moves, etc...). Same with the 4th and top quintiles: the income of someone at the 70th percentile and 85th percentile isn't that far apart, but at the top of the top quintile (top 5% especially) the gap increases exponentially. Indeed, the gap between the top 10% (roughly 110k) and top 1% (roughly 388k) is necessarily much larger than the entire gap from 1% to 90%.
Wealth mobility is even lower. But in any case, what you said is plainly wrong.
Both upward & downward mobility in the USA are actually quite a bit more likely than most everywhere else.
Personal mobility is seen everywhere. This reflects the common life-cycle economics curves of starting off at the bottom in one's 20's, working one's way up to a peak in one's late 50's or so, then tapering off into retirement. We are not really so special there at all though. Where we are special is in inter-generational mobility. We and Britain are about tied in being really bad at that. A US child born into the bottom 10% is very unlikely to rise any higher than the 11-20% band. A US child born in the top 10% is very unlikely to fall any further than the 81-90% band. The income distribution has become so skewed in this country that the advantages and disadvantages of income disparities have frozen more and more people into place.
We could have just publicly funded universities as much as we did in the past century, but that would make too much sense...
SUNY has them and the cost is low. CUNY as well. However, they don't have the "big really name appeal" lots of kids want . And, cost ofliving to go to a SUNY school upstate is substantially lower than one downstate, simply as the cost of room and board or apt. is much lower.
In the US, 41% of adults have some post-secondary education. Per the OECD, that puts us in the top ten among their 34 member countries -- between #1 Canada at 50% and #10 Finland at 37%. So we do send a healthy cohort on into higher ed, but not something that is out of line with what other wealthy countries are doing. We can't afford NOT to play at that level. The only question is how to pay for it.
Some post secondary education does that equal graduation rate?
Yeah my last auto loan was 1.9%, which isn't even really good because my credit wasn't high enough to qualify for the 0%. Big difference between that and 6-7%, or even my loans which are at 4.25%. All unsubsidized federal loans. College students typically (at least conventional ones, might be different for people going back in their 30s) don't typically have high credit-worthiness.
Poor is correlated with lousy credit but doesn't have anything to do with it directly.
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