Should Students Get the Same Loan Rate That Banks Do?

Discussion in 'Politics, Religion, Social Issues' started by xShane, May 12, 2013.

  1. macrumors 6502a

    xShane

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    #1
    Full article: http://www.dailykos.com/story/2013/...ould-get-the-same-loan-rate-as-big-nbsp-banks

    She definitely has an interesting point here. Why are private corporations, banks, getting far lower loan rates than the students and people of our future

    What are your thoughts on this? Discuss.
     
  2. macrumors 6502a

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    #2
    Ok, let my start by stating I'm not fan of big banks...

    but big banks are more likely to repay their loans than students.

    Lower risk, lower rates. Higher risk, higher rates.
     
  3. thread starter macrumors 6502a

    xShane

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    #3
    Source for such a claim?
     
  4. macrumors G3

    roadbloc

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    #4
    Students shouldn't get ****. I find it disheartening they're given so much and yet they still feel the need to riot in the centre of London because things don't always go their way.

    Regardless of how misinformed my opinion may be (and I understand that it probably is), I don't have a very high opinion on students.
     
  5. macrumors G4

    Eraserhead

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    #5
    To be honest what do students get in the UK these days? They pay nearly the same fees as foreign paying students and overall they pay a lot more in taxes than non-graduates over their lifetime.
     
  6. macrumors 65816

    Zombie Acorn

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    #6
    Banks would have utterly collapsed in on themselves if the government didn't bail them out only 4 years ago. Students can't even declare bankruptcy on their loans.
     
  7. thread starter macrumors 6502a

    xShane

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    #7
    You mean they're given so much in debt and it's hard for many of them to find a job, right?
     
  8. macrumors G3

    NT1440

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    #8
    History would say otherwise. They tend to pay just a fraction of the total amount, simply because the actual amount is well hidden from the public.

    Example: The Bank bailouts cost far and away more than the $700 billion bailout. Trilions have been handed over, literally billions a day. What does the industry do? Pay back the publicly disclosed money quicker than required so we as a whole can go "what nice banks, upstanding citizens!". Then they get to pocket the rest (mostly used to buy back their own stock, inflate stock prices, and payout out bonuses/merge with other way too big institutions).

    We subsidize banks in this country. I'd rather subsidize our future, our students.

    ----------

    Exactly. That's by federal law enacted in 2005, a strengthening of the same rule enacted in 1998. That should really say it all.
     
  9. macrumors 6502a

    gsugolfer

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    #9
    Banks are getting a lower rate because that will be paid back.

    Students are less likely to repay on the scheduled terms.

    That can be affected by personal decisions. Go into a marketable field. Learn a trade. I'm a CPA, and there are plenty of plumbers out there who make more than me. People still tend to "look down" on service providers and trades because it's not white collar.

    Our country NEEDS people to do those sort of jobs. It doesn't need more liberal arts grads as much as people think.

    If you could have student loans discharged in bankruptcy, why not go to a college you can't afford, get a great degree, and then file bankruptcy?

    Free degree!

    No, of course it's not that simple, and yes I'm being facetious. But you get the point.
     
  10. thread starter macrumors 6502a

    xShane

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    #10
    Again, source?

    And do you think a student is more likely to pay back less debt or more debt? Hmm...
     
  11. macrumors 6502a

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    #11
    well, personally, i think that as a society, having more students (read: educated people) is our interest. we want these students to be able to get through college and uni', without placing more difficulties, like higher interest rates. when we have people who are more educated (be that an engineering degree, or a diploma in car mechanics - we need them all, much more than we need liberal arts students) they get paid more, and thus, they are able to spend more. as a society, we want people to spend more, because it helps small business, and generally speaking, drives the economy forwards.
     
  12. macrumors 6502a

    gsugolfer

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    #12
    Common sense is the source. Bank's can't leave the Fed hanging on a loan because it's secured. Student loans, however, are unsecured. Yet another reason for a higher rate.
     
  13. thread starter macrumors 6502a

    xShane

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    #13
    :rolleyes:
     
  14. macrumors 65816

    SLC Flyfishing

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    #14
    In my opinion, the real issue resides in the federal government's policy of paying up to COA without setting limits. This leaves a loophole where schools can charge essentially whatever they want and students will be able to secure student loans to pay it.

    My schooling will cost me nearly $500K
     
  15. macrumors 6502a

    gsugolfer

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    #15
    You ignored another reason for a difference in rate.

    Why should the same rate be charged for secured and unsecured loans?
     
  16. macrumors demi-god

    Shrink

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    #16
    Whoa!

    What are you doing, endowing a Chair to get through school!?

    C'mon, just take the tests like everyone else.;)

    :D
     
  17. macrumors G3

    NT1440

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    #17
    That assumes that humanity is comprised entirely self serving *******s. I'm not that cynical about the human condition (while being cynical about everything else).

    Although, if you think everyone could manage their own bankruptcy maybe there is hope because that means you assume everyone will basically become qualified bankruptcy lawyers.

    Yes, I get the point, but I find it not to apply in reality.


    At the end of the day, all we are really doing by having schooling cost this much with such pitiful returns on investment en masse, is ensure the destruction of our middle class.
     
  18. macrumors 65816

    SLC Flyfishing

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    #18
    $43K per year plus living expenses and some undergraduate student loan debt will creep up on you like that.

    My school's tuition is about average, but it goes up every year without fail. I wonder if the federal Gov. would ever refuse to fund the increase with increased loan eligibility?
     
  19. macrumors 6502a

    gsugolfer

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    #19
    Nowhere in that post did I say that college is reasonably priced, so I'm not sure where this is coming from.
     
  20. macrumors 6502

    Bug-Creator

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    #20

    You must have been hibernating the past 7 years than ...... :p


    They might not just simply default on it, but "socialize looses, privatize profits" can (and has been) achieved in many ways.
     
  21. macrumors G3

    NT1440

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    #21
    That section wasn't in response to you, I tried to separate it from the rest with a double return. I apologize I should have made it clearer, I was using your post as a springboard for the rest of my stream-of-thought post.
     
  22. macrumors 68000

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    #22
    Interest rates should be set by major and the likelihood of gainful employment (and thus successful payoff).

    English, Anthropology, or Sociology major? Hello 8.5% loans.

    Engineering major? Mathematics major? Hello 2% loans. Then throw everyone in between. Update rates every couple years as necessary.

    Not every major is as likely to find a well paying job. It's not saying you can't go to school for a certain major, but it is making it clear that getting a major in one major is much more of a financial risk than others. That combined with more substantial pre-admission loan counseling might give students a clearer picture as to what taking 'x' amount of dollars out means to them after graduation.

    I never got a really sound overview until I went to a sparsely attended pre-graduation student loan seminar that showed exactly what my loan balance and rate meant when it came to that payoff 6-9 months after graduation. My per month payoff estimate wasn't far off, but it was good to see that in writing and could have maybe used that sooner.
     
  23. macrumors 6502a

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    #23
    Do banks ever repay their loans?
    Seems pretty plausible they are like countries and just accumulate bigger and bigger debts.
     
  24. macrumors 68020

    ugahairydawgs

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    #24
    How about they pay back no debt?

    Personally I see no good reason to incentivize the acquisition of debt. Lower rates will just make it easier for people to justify bigger loans.

    Country would be in a much better place if we all, our government included, would stop relying on credit to function.
     
  25. macrumors 68040

    DakotaGuy

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    #25
    I take it you haven't taken out many loans in your life have you? My home mortgage is 4.5% and a mortgage on some land I bought is 5%. I have a car loan for 3.9%. Now with that said, why in the world are my credit cards 10-18%?

    The difference is the mortgages and car loan are "secured" and the credit cards are not secured. Student loans are also not secured so interest will typically be higher. To be honest interest is cheap on student loans considering they are unsecured.

    Guess what type of loans the banks have? :D

    Now what is my source? Nothing. Just a slight understanding of how things work in the financial world.
     

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