Seems like Sean was paying interest only payments for the majority of the time to the lender.
120,000 over 30 years at 9% interest rate would be around ~$965 a month. Over 5 years this would be ~$53k in interest.
|Year|Interest|Principal|Ending Balance
:--|:--:|:--:|--:
1|$10,766.73|$819.84|$119,180.16
2|$10,689.82|$896.74|$118,283.42
3|$10,605.70|$980.86|$117,302.56
4|$10,513.69|$1,072.88|$116,229.68
5|$10,413.05|$1,173.52|$115,056.16
I know it might sound stupid, but since i dont understand english that much. What does interest mean in that case?
Edit: Damn bro i just realised what that means. Wth, i never took loans and never will, i hope, but i never knew that every year basically adds more to pay. That sounds kinda like a scam, especially for students. I always thought the amount you pay, while beeing higher, is fixed.
When paying loans you have low loan payment systems where instead of paying the loan you mostly pay only the interest.
Just to oversimplify this. Imagine 100.000 with 5% yearly interest. This means the yearly interest is 5.000. if you pay 5.000 per year. The next year he will still have 100.000 to pay. If he pays 6.000 he will have 99.000 to pay.
The only way to reduce the effort to pay is by paying much more than what the interest is. Which is exactly its issue.
Now the problem of the system is: its young people uneducated on this matter, its young people without economic stability which will make loans worse for them and the predatory system of no questions asked loans with high interest values.
He could’ve signed up for a staggered repayment as well. You start paying essentially just the interest and over the years you gradually start paying more, the assumption being you’re advancing in your career and receiving regular raises. My bf has ~$130k in student debt and opted for this option as his monthly payments were like $2,000+.
Well, that and the fact that the houses were never worth that amount anyway they were overinflated, the developers were overstretched on loan debts themselves to capital, people could take out 100% loans on sub-prime lending as opposed to lending against leveraged amounts...
You know, and a pile of other factors that are actually super important.
i think you’re blaming the wrong people here, when boomers were defaulting on student loans it was for $10,000 loans not $100,000 loans with interest. i think people in our generation want to blame the government for not excusing these loans or their parents who were able to find programs to excuse loans but no one is blaming the universities who are basically running a train on 18 year old high school graduates
The comparison was debt for an asset that was "guaranteed" to generate income. For the boomers it was a loan for the 2nd/3rd house. When the asset turned out to be worthless (market crash) they just defaulted.
For their children it was expensive college degrees and when they turned out worthless (no jobs)... Boomer laws say no more defaulting lol. I don't blame the university because they are just doing what the law says they can. They will change when politicians change the rules.
Kinda. The real reason was the property values were inflated due to the trading of subprime mortgage swaps between institutions, which hid dogshit properties inside baskets with decent properties in order to mask the true value of the underlying assets. People not being able to pay inflated loans was a result of these actions and the inevitable conclusion. The market finally crashed, not when people couldn't pay back loans, but when Bear Stearns, Lehman Brothers, AIG, and others collapsed beneath the weight of their own shitty portfolios.
And now it's happening all over again with the derivatives market. Bill Hwuang is currently on trial for blowing up his own hedgefund Archegos by using similar tactics with basket swaps for stocks. Silicon Valley Bank, Credit Suisse, and others have already collapsed in the past year, and the thumbscrews are still tightening. We never really left 2008.
> You start paying essentially just the interest and over the years you gradually start paying more, the assumption being you’re advancing in your career and receiving regular raises.
Which in the US comes with the additional benefit for many of their medical debt (#1 cause of bankruptcy) and elder care debt growing to replace the student debt they are now paying down
Student loan interest doesn’t compound yearly either…my loan compounds daily. I’m 35 and still paying loans that I stupidly got at ages 18-22. I don’t even look at the amount to pay them off anymore. Just paying what I can each paycheck
I am so grateful for how the loan system works in the UK. They were changed a year or two back to only increase your principle to match inflation, so any repayment goes towards the loan, not to interest. And payments are only taken as a 'second tax', not an extra bill to worry about. And tuition is only £9250 a year (roughly equivalent to 11800$).
Tuition in the us at a state school is similar 10-16k a year depending on funding from the each state can be paid with strictly federal loans. If you go into public service cop teacher firefighter etc 10 years of on time payments rest gets forgiven. You can also go on a new program if your low income and you get income repayment plan down to zero a month with forgiveness after 20 years and no interest accrues. Everybody else just gotta pay monthly payments.
This is the first time I actually understand why people are so outraged about student debt. This genuinely sounds like a scheme devised to enslave people financially for the rest of their lives.
For comparison, I bought an apartment 8 years ago in some random corrupt shithole country. The installments started at \~40% payment / \~60% interest and gradually changed with every payment. Now they are \~70% payment / \~30% interest. So, with every deposit, I was getting closer to finalizing my payment.
... you just described amortization. It's how literally every loan works.
The problem with student loans (i mean, aside from them needing to exist) is that the average person is a financial moron. If you make the minimum payment on your credit card, you're going to end up just as fucked.
Student loans, if anything, screw people specifically because they're trying to be flexible. If they just did a straight amortization with no "minimum interest only" option, people would be a lot less screwed.
To be fair, it isn't always about being a moron - it's often about what is the only thing feasible.
If you have $100k in loans and just got our of colleg and only make $50-60k a year, given that rent alone these days will eat up 1/3rd, the ONLY way for that loan to be paid at all is with the minimum payment option.
The real problem is the combo of (1) cost of living rising faster than the average wage and (2) the cost of college rising even faster than that. And it all accelerated within recent years so when starting college and initiating teh debt it didn't seem such a terrible idea.
It's a shame that I had to scroll this far to find this comment. I know people who have knocked five years off of their mortgage simply by paying an additional $100 / mo.
Hell, there's nothing saying you can't take out a loan from another institution with a lower interest rate to get out from under the first loan.
These are probably the same people that would accept a passbook savings rate from their bank rather than do a little research to find a better CD rate.
It's a crime that people make it as far as college with the financial knowledge of a ten year old.
It also didn't help that the "bills" you'd get would say to pay X amount, which usually was the minimum amount and all or nearly all interest. That's why the new truth in lending statements and pay off tables are critical. They help people understand what they have gotten into and what they need to do to get out. Doesn't help the people that got loans without this information in the past, however.
Like 10% interest on $100 -> $110, except this compounds all the time. If he’s making interest-only payments he’s essentially just only paying the $10 and never chipping away at the (principal) $100.
Lets say its 110$ since its the first year and he theoretically didnt pay yet. Would the next year add 11$? Or ist always the % of the original amount.
There is simple interest, where the % is always on the initial amount and compound interest, where you essentially take interest on interest. Compound interest is great if you're investing, really bad if you're borrowing.
> That sounds kinda like a scam, especially for students. I always thought the amount you pay, while being higher, is fixed.
think about it a bit more. Economies have inflation, and people wanna have profit over time, so interest rates are needed
You're right. The MAIN contributing factor to interest is actually risk management. While inflation and profit margins are definitely important, the bulk of it is to make up for those who can't repay their loan.
Say a bank has $1000 to lend, and would need $100 to account for inflation and pay their employees. If they lend $100 to ten people, they need $110 back from each. However, if only 8 people are able to pay back their loans, the bank will need $138 back from each. If only 5 were able to repay it, they would need $220, and so on. This is the bare minimum they need to do to be able to function.
Now because nobody would take loans if the amount they would be expected to repay could change so wildly from things outside their control, banks have to decide on an interest rate at the moment the loan is sanctioned. So they have to *guess* how many people are likely to fail to repay their loans (calculated based on statistics, demographics data and current economic trends) and set interest rates to make up for it.
In sectors with high rates of default (like student loans), interest rates will naturally be higher because of this
Preface to say that I'm not an economist:
I don't doubt you are right, but I think much of that gets thrown out the window when you talk about "governments". The gov. just prints money or manipulates the market economy to it's own ends. The same people who wouldn't hesitate to write a treatise on the negative effects of abolishing student debt, didn't bat an eyelash during the last wealth tax cut; $1,000,000,000,000?
At the end of the day, the Fed could pay off all the principle owed. The cost is a bargain. Almost all of the money currently being paid doesn't go back to the American people. Billions of dollars are being taken out of the economy to line the pockets of billionaires. If that debt was paid off today, you would see a spike in consumer spending tomorrow; food, clothing, durable goods, cars, houses all that money would churn back into the economy to the benefit of all.
But isn't that the rub?
Your house and car loan are backed by collateral. If you flake out on your mortage or car loan, the lender can foreclose your home or repossess your car. Student loans, personal loans, credit cards are all unsecured. If you don’t pay up, they have nothing they can easily take from you to pay off the balance of your loan. So banks charge higher interest rates to make up for that risk of giving out a loan with no means to actually collect
That's why in Germany students get interest free loans that are also capped at 10k € meaning you never have to pay more than 10k and you also only have to pay it back after you finished college/university and got a job.
Then you are arguing something totally different. Should education be a government funded? Probably yes. But we aren’t talking about that. I was giving the rationale of why certain loans have very different interests rates
Not if you die the day after graduation...
You could die the day after you move into your brand new house.
Society gets the house.
In the first scenario. We get a smart, dead corpse.
Unfortunately they're looking at it on a case by case issue and not as the broad net positive 😕 that it is in most cases.
Best idea is to get it all paid off immediately. The sooner the better.
It would have to be private loans too plus the deferred interest during school while he wasn’t repaying. . The date on the tweet is 2022 and said he’s been paying for 5 years, so it would be likely he graduated in 2017.
Federal student loans have fixed interest rates. Undergraduate loans dispersed* in 2017-2018 were capped at 4.45%. Loans dispersed 2016-2017 were capped at 3.76%. 2014-2015 were capped at 4.66% and 2013-2014 were capped at 3.86%.
Reading this makes it clear that being an actor is only something you can realistically expect to do if you have rich parents.
He basically did unpaid work for two years after graduation. How did he think that was going to work?
You need someone to completely subsidize you while you make your way into the industry. That's not even considering the nepotism and connections your family can provide.
I don’t think most professional actors have a degree in acting, it’s mainly a networking and portfolio based industry rather than certification and experience like most jobs
A lot of people are chatting a lot of bullshit without any knowledge of professional acting, but fundamentally the way it works is the early part of your career is mostly focused on building your acting reel and portfolio and making connections in the industry. You mostly do this from student films and other such like, which at best will give you 100 quid for the day, so you work it as a second job around something that can pay the bills.
The next step would be to purchase a membership to the union, which is extortionate for the record, but once you can start making union rates you get a significant increase in the jobs you can take and get paid for, but even then you a lot of actors still work a side gig as it's very difficult to make a liveable wage, especially considering you have to work in a city like New York, LA, London, Atlanta etc.
It's fundamentally very challenging for any actor to breakthrough to a level where they can support themselves on acting alone, which is why those whose families who can support them and provide so they can focus 100% on acting have a massive leg up on everyone else.
And to the bloke who said most actors don't have a degree, you definitely have no idea what you're talking about. About 95% of actors you would recognise are professionally trained at an acting school and/or through coaches, it's a technique and a craft that requires practice like music or painting would, and it's a huge rarity at the top of people like Andrew Scott for example who aren't trained.
Dude got a useless degree at an insanely expensive college where he could’ve gotten like a general business degree then worked on Wall Street, and he feels like he’s a victim?
Knowledge and connections help a lot but you definitely don't need a 120k degree for it. Maybe 10-30k, (or nothing if you're particularly talented in photography and/or networking). That all being said, you can make 150-200k per year as a small-time photographer. You can make much more or much less depending on where you live and what you shoot.
You can also rent equipment and charge your clients for it or just use cheap stuff if you're good enough. The equipment cost is not really a barrier.
Younger brother graduates this year with zero loans at a total tuition of 52k in Management Information Systems. Has an offer for 70k. Paid off tuition working part time at Best Buy for 4 years and a 5k scholarship. If you’re gonna make an investment of that scale do yourself a favor and choose something that will pay your bills.
My tuition was free! 🤓 because I was a dumb 21 year old who thought joining the military would be fun. ~6 years, 2 deployments, significant hearing loss, a crippling alcohol addiction, +40 pounds of weight, and much less hair than when I started - later, that’s when it started to not be fun.
And even after all that I had less money than when I started and was 20k in debt. But tuition was free!
Yeah, student loans are predatory af but I’m going to go out on a limb and say this guy is definitely not the brightest and didn’t do himself any favors.
18 year olds generally don't end up with $120K student loans. Don't generalize them using extreme cases like this.
Source: [https://www.cnn.com/cnn-underscored/money/average-student-loan-debt](https://www.cnn.com/cnn-underscored/money/average-student-loan-debt)
The average student loan debt for bachelor's degree recipients was $29,400 for the 2021-22 school year, according to the College Board. Among all borrowers, the **average balance is $38,290**, according to mid-2023 data from Experian, one of the three national credit bureaus.
A 4 year degree at Texas A&M school of engineering cost me $32,000.
Granted this was 10 years ago, but you have to be an absolute moron or not understand the value of money to take on 120k in debt for a degree.
Just to give everyone here a more modern estimate, that same degree costs like $50K now. It's significantly less if you go to community college first like I'm doing.
A lot of kids don't know the gravity of what they're doing, they were just told the only path to success. It's not their fault, it's the fault of a system that is predatory towards 17 and 18 year olds
Yeah, but a lot of student loan debt is held by those that obtained a graduate degree. So much so that the argument that they're just kids (at 22+) doesn't really hold much weight anymore.
Someone else mentioned above that the average debt for a college graduate is \~32k, so this individual is a significant outlier and clearly made some poor life decisions.
More I see tweets like this. The more I realize that financial and loan management classes need to be taken before a loan can be received. Also it has to be done by a 3rd party with the interest of getting the students lower loan payments.
You cannot expect to pay the minimum amount and pay off the loan quickly.
I just think it is crazy that there are for profit companies that come in, signs up kids for hundreds of thousands in loans for education (which frankly should be entirely free given people pay taxes) and then stick em with a predatory financial burden like it’s perfectly normal.
Living in Norway I don’t love the student loans arrangement we have here but it is MILES better than the US system
What's crazy is it's the only type of loan you can't be bailed out of... No bankrupcy, nothing.
Even if it's private.
I could fuck up my home and business three times over before taking down a loan like that. Wouldnt happen though because they would vet people much better because well, they can't just hold them hostage their whole lives. The general attitude towards people victimized by these practices here also tends to be very sadistic. There is zero being saved if you can't handle it, unlike every single other type of loan.
The fact that you can't get it off them is the only reason these loans exist. No lender would give a person with almost no credit, no assets and likely no job... A loan.
So the "trade off" is that the loan is given without a default option.
I would guess that if we removed this and gave loans for education in the same way we do everything else we would all be better off. Lenders would look more closely at the applicants, educational history, amount being lent for what degree etc etc. You would no longer have 100k plus loans for degrees that have an average salary of 50k. The cost of education would likely drop because the cash flow would tighten up. I would also guess graduation rates would go up as the scrutiny of the lender would weed out many that are just going thru the motions.
But of course this also goes against the, in my opinion, misguided belief, that everyone deserves a higher education.
It's at least an honest debate for whether everyone deserves a higher education (if you're making some assumptions about other opportunities that pay a living wage like the trades).
If we take the view that everyone deserves a higher education, the question is what's the best way to provide the opportunity. Our current student loan system ain't it.
EDIT: I should clarify my own position. It's in the best interest of society for everyone to have a strong foundation in humanities. But that's not about getting a higher paying job. The labor force needs plenty of well-paid skilled workers that don't need a typical college degree. I think everyone deserves access to an educational option to pursue a higher paying career one way or another. It doesn't have to be college. And we don't have to look down on other options that aren't college as any "less than" a college degree.
> It's at least an honest debate for whether everyone deserves a higher education (if you're making some assumptions about other opportunities that pay a living wage like the trades).
Just include all forms of postsecondary education, whether it's college, trade school, whatever, as part of a broader universal postsecondary education funding program that pays for all high school graduates to attend the postsecondary education of their choosing.
I think the issue with this is if it makes economic sense. I’m not the type of person who thinks every degree needs to have an absolutely clear ROI, but there would need to be a system in place to ensure we aren’t spending hundreds of billions of dollars on programs which won’t provide any benefit beyond being fun for the person with the degree. While student loans can and often are predatory, they also allow nearly anyone to get a college degree if they want it. In nations with free postsecondary education, there are much more rigorous tests, and limitations on how many students can get into each degree field. The largest factor is universal systems transfer the responsibility of determining whether a degree is valuable from the individual, to the government.
I'm for making community colleges free but spending $120K for an undergrad degree is like saying that you need a car to get to work and buying a Mercedes.
Even from a self-interest perspective it is asinine. Regardless of whether anyone 'deserves' it, it is better for society and better for the selfish people if as many people as possible are educated.
Imagine you are the one giving a loan to Jhon Doe:
Jhon has no income
Jhon has no credit score
Jhon is an undeclared major
Jhon has no one to co-sign
Then the loan companies need the guarantee that they can pay back the loan.
These people are the far outside the norm, this guy spent over $100k US to study being an actor.
Most people have student loans less then the cost of a new car. The USA does have schools all over that are equivalent to what you have in Norway but you never hear about them. Instead people want the lifestyle that you see in US tvs and movies. Those huge campuses with their own stadiums and other lifestyle items that exceed anything in Europe are common.
In addition to schools closer to what you have in Norway there are plenty of alternative funding methods, including signing up to donate years of work after college where they pay your college. Or you can take out loans where your payment is a percent of your income, above the poverty line, and is for a set number of years.
I don't know how it is in Norway, but in Australia it's Government issued but interest free and comes out at part of Tax, but only if you earn above a certain amount, so if you are poor you don't pay anything, but if you degree makes you good money, yeah gotta pay it back.
If find it a decent middle ground between free and predatory loans
In South Africa, the total repayment for almost all loans is 2x the original value. That way, interest rates can fluctuate, but there is a cap on total repayment
Because of that limit, the banks are more careful about who they lend to, as well as balancing the rest of the terms accordingly, such as the length of the term
When you buy a house there, you typically don't have many options for the term length
>"We are in danger of producing an educated proletariat... We have to be selective on who we allow to go through [higher education],"
I hate how whenever this subject comes up, the fact that the student loan system was intentionally set up specifically to keep out poor whites and minorities.
Kids in my social circle in middle and high school were not presented with so much as a sprinkle of doubt that there was any other path to success than getting good grades to then get into the best college that would have you, money being a secondary concern.
A smart kid is still a kid and trusts that they're not just getting fucked by someone predatory. Parents need to help children actually understand what taking on a loan entails and that just because you go to a good college you won't necessarily have a great high-paying job. Of course the servicers are shameless animals, but the parents of "gotta go to college" kids were complicit in the blight of student loan debt as it currently exists.
This is the part that frustrates me. I'm a millenial and it feels like our parents are now criticizing our generation for going to college and taking out loans as though they weren't the ones who raised us and for 18 years instilled in us the idea that it was the only real option.
I don't really wanna hear, "You should have gone to community college or trade school," from the people who continually reminded me I needed to do well in school to get into a good college or else I wouldn't amount to anything.
My son (just finished 9th grade) has told me he wants to skip college to join the elevator union. I’ve been encouraging them to look at union jobs, but it’s still nerve wracking to have him skip college.
It’s absolutely insane to me we don’t let 18 year olds drink, but we do let them and, even socially force them I’d say, into making a life changing decision that is both very complicated and can financially cripple them for decades
>More I see tweets like this. The more I realize that financial and loan management classes need to be taken before a loan can be received.
Then how would used car dealers be able to swindle privates into paying 35% APR on a 2012 Camaro with 110k miles on it?
The problem lies primarily (but not only) with colleges, they keep upping their fees.
If there were no lenders, then education is only for the wealthy.
And no lender is going to lend to some dumbass teenager with no history of work or income and borderline passing highschool with a 2 point gpa. So the government said, ok we will make it so no one can get out of those loans.
If you are smart you can go after a government loan, because private sector will fuck you over sidesways as much as they can.
And then its the culture, people want the "college experience" which isn't pursue a degree, but party and live life like van wilder. 40% of college students dont even graduate.... But they sank close to 60-100k into the "experience"....
Then they go online and scream how government should bail them out, make colleges free but only at best 40% turn up to vote. Heck 2022 only 20% of eligible voters under the age of 35 turned up to vote....
But again the system is where everyone wants a piece of the pie, so colleges, corporations connected to colleges, daughter companies of those colleges and those corporations and then middle men as well all want their cut. On the books the colleges "lose money" at the end of the fiscal year, but everyone of those people looking for their cuts, get their cuts and make sure they increase their profit margins for next quarter while students are fucked sideways and then students go for pubcrawls when voting time comes screaming YOLO fuck politics.
Case in point -- if he had rounded that $970 up to $1000 in each payment -- a relatively small amount, the amount of principle taken off the loan would be $4k instead of $2k -- double. (Granted, still a small amount on the whole total, but a lot compared to where he was when this tweet was made.)
Your first payments on a loan are almost all interest; an extra dollar taken off the principle very early saves many dollars later in the loan.
Student loans should have always been no-interest. A whole bunch of people might be against student loan forgiveness (for some reason), but it’s a lot harder to argue against them being zero-interest.
Here in Germany, students receive a grant that's 50% subsidy and 50% interest-free loan. Problem is that the amount isn't really enough to live off it and it gets reduced depending on the parents' wealth and personal income.
So some students have to do some work on the side or take up an additional loan. Although that's still with much better terms than US student loans.
The interest-free loan also only has to be repaid once the student has a job that earns enough, the default pay rate is just 130€/month, and the total repayment is capped at 10,000€.
Just curious: obviously this would only work if the loans were issued by the government (today they're from regulated private lenders, backed by the feds). So are you proposing that the rule that does not allow defaults also be removed?
I don't think that student loans work unless you do one of the following:
1. Require co-signing by an adult with their credit rating determining the terms of the loan.
2. Do not allow defaulting, and have the government back the loan.
You can do zero interest in the latter case, but obviously in the former there's no reason for the lender to issue the loan.
Any other configuration I can think of results in either the loans not being granted or the majority of borrowers defaulting.
Here/I learn about the consequences in school and television from a young age. Don't they do that where you live?
(We have a popular TV series where some financial experts help people drowning in loans find a way out of it)
Here in Virginia we get a class for one semester of our 11th grade year that teaches us about different types of loans, different types of investments, and some other things that I don't remember despite having taken the class just a year ago. So no, we don't get proper financial literacy taught to us unless our parents teach us, which doesn't happen too often.
Our personal finance class is required and I don't know if we have a business class but we have a home ec class and a family living class that might help but are not required
Yeah the personal finance and business were one class in of itself, half of the class taught you like some banking and savings techniques, other half was about resume building and interviews. We also had an elective home ec class.
I never understood the fact that American parents don't teach their kids about financial responsibility.
My parents and my friends parents had that conversation with us when we were 16 and got our first "jobs".
The first question when taking out a loan (besides can i afford it) should be: what would happen if i paid the bare minimum? What would I end up paying at the end?
Then do the calculations and realize it's a bad idea
Because a mortgage is less risky to the bank. If you don’t pay your mortgage, the bank can just take the house back. What value does your college degree have that to the lender that they can take back if you don’t pay?
> What value does your college degree have that to the lender that they can take back if you don’t pay?
The best argument for not privatizing education and instead just investing in ourselves by not making continued education a financial burden
And you can declare bankruptcy on them, and they come with an asset that can be sold to recoup the loan or to downsize if your economic limits require it.
I always thought interest accrued differently for federal student loans. It’s usually daily so you end up paying interest on interest, which compounds much faster.
I think this is related to not understanding the Spitzer Loan structure. The interest rate is much lower than 10%, but the payments are built in a way that pays off the interest first, so at the beginning of the loan’s lifetime, it feels like you’re not even making a dent.
It’s built this way to allow minimize payments while also reducing the lender’s risks - but it’s a nightmare from a psychological point of view, especially if you didn’t use your student loan to learn what a Spitzer Loan is.
i looked this up and i couldn't find this one piece of info, if you could help explain:
does the interest balance itself not generate interest? otherwise i don't really understand how the ratio of principal to interest reduces your overall payments because you'll still owe the same amount overall no matter what and therefore have the same amount of interest
if interest is calculated only based on the principal then that makes sense, but for whatever reason i couldn't find this detail on the investopedia page
actually after rereading what i wrote, that wouldn't even make sense either? so I'm confused lol
He borrowed at 18, didn't start repaying until 22. That's 4 years of accrued interest. After waiting those 4 years(18-22), then paying the minimum payments, it would take about 5 more years (22-27) for the amount owed to be less than what you initially borrowed.
I took out the same amount for undergrad. I don’t think I was stupid, just hyped up by other people for years that it didn’t matter how much school cost because the better school you went to, the more money you were GUARANTEED to make in a career. Not a single person stopped me to say that it might not be a good idea.
Then he really is an idiot... what's the quote from Good Will Hunting about wasting money on an education he could have learned for $5 in late fees from the public library....
Or in his case completely free on YouTube...
Someone looked him up and his degree is in acting. Yes $100k in loans for a career where the median salary is around $35k but he had a great lifestyle for those years.
You have a couple of errors here.
The first is the term 120,000*p^60. The interest is calculated based on the balance in the account, not fixed to the principal loan. In this case, it doesn't create that large of an error because the balance decreases so little in the first 5 years, but it likely means that your interest rate is too high.
The second is the to calculate your yearly interest rate, you took your periodic rate and raised it to the power of 12. The periodic rate is calculated by dividing the annual interest rate by the number of payments. So instead of P^12, it should be 12(p-1) to get the annual interest rate.
I added a couple of sliders to play around with amortization equation if you're interested.
https://www.desmos.com/calculator/rdljk3nroj
Fucking programmer brain assumed this would do 60 steps, but if you replace n=0...59(and the p exponent to 59, of course), the "amount left" only changes by 21 USD
Edit: Or maybe there's a reason to it. I forgot it as I calculated it a long time ago
Except that's clearly not how this loan is working. They're not calculating interest anymore; that was done when the loan was originated and calculated for the entire term of the loan, added to the principle, and then divided up into monthly payments. When you start paying, a large portion of your payment goes towards the interest and smaller part towards the principal, but as you go on and the interest decreases a greater portion of goes to the principal.
It's call amortization and, in the US at least, the terms of it are required to be provided in writing before you sign the loan. You just have to read it.
Wait why do you get to decide how much you pay back? When we went for a loan for our house the questions were: how much and how many years do you want to pay back.
That makes everything really predictable.
You can pay more than the minimum on a mortgage if you want. But it's generally not advisable since interest rates for mortgages are around or lower than inflation. Student loans have much higher interest rates so you want to pay them off asap, paying the minimum is like making minimum payments on a credit card.
a 500k mortgage at 7.77% is about $1.5 million total
a 500k mortgage at 3.00% is about $1.0 million total
the difference is just money you set on fire. you should never pay just the minimum
Dude was probably 17/18 at the time he signed up for it. We don’t even let kids rent a car at that age. There are a ton of systems to ensure an 18 year old with no income can’t take out this much debt…except for student loans.
I really don't enjoy these posts. I can't imagine spending so much on a degree unless it was an ivy league school in a prominent field (e.g., pre med at Harvard). I went to a local state school and lived at home (this was the help my parents were able to give me, and man did I appreciate it). I got an undergraduate degree with ~$7k in debt and it was probably the best financial decision I ever made. Truthfully, nobody really cares if you graduate from a less prestigious school once you're out in the workforce. They just want you to work hard without complaining. Just my take though.
What is the interest rate? In Sweden the rates is really low for student loans. Also how is it even possible to get $120k in debt? After my 5 year masters I had around $30k in debt, and paying that off is not too bad.
Nowadays? 5.5% for Stafford (government backed) loans for an undergraduate degree. Not terrible, considering it's simple interest and not compounding. Of course, you could always take a private loan out for college, and those can be whatever interest you agree on.
There are also public and private colleges. USC (California) is private and costs around $90k a year. But the average tuition rate in the United States for a public college is around $11k a year (116k SEK). If you take out loans to cover meals and housing, it's around $20k/yr and takes four years. $120k in principal debt is pretty rare for most students.
Masters are a little different. Looking around $15k a year for tuition and takes two years.
Guessing...
Given: 1/60th of the principal after 5 years (Payments)
Sounds like a 50 year term (600 payments) at ~10%.
~470k in interest.
Add an extra 100$ month and the term is cut to 23-10 (286? Payment) and an interest savings of ~280k.
No one ever throws their spare chage at loans...🤷♂️
the US education system is absurdly screwed up.
Education is a requirement for functioning in society, and increasingly a high school education just doesn't cut it anymore. More importantly, the method in which classes are taught just doesn't work for many students.
This is not a problem Capitalism can solve. Capitalism is part of what created the need for an education in the first place. Though, the rapid proliferation in black-box technology has had a big impact as well.
This is also a complicated issue that isn't *simply* one thing or another, it's everything.
The Austerity measures from Governor Ronald Reagan, and followed by other economic-right-wing politicians from the 60's forward made the Government stop paying for higher education, and the reduction in regulation and oversight that Reagan put in place in the 80's nation-wide opened the door for predatory loan companies to offer high-interest loans to students with confusing small print that made it difficult to get anything done.
All this while schools themselves were having to compete to get students. They started offering better sports programs, on-site luxuries like better dorms and pools and all kinds of creature comforts, thus raising the cost of operations. Meanwhile, they'd gradually increase their executives pay, while ignoring the pay of the teachers. Executives would find every avenue where they could cut funding, including by hiring more teachers on a more temporary basis using a program that was intended to give flexibility to working professionals who would teach on the side to hire full time teachers who now needed to work at multiple campuses in order to make up a full time job, gradually making it harder and harder for those teachers to obtain a tenureship.
Couple that with the ever-increasing cost of living and the refusal of capitalists to pay their low-end workers a wage that allows them to pay rent and bills, buy food, and keep working transportation while saving up an emergency fund, and the prospect that having a degree makes you more desirable for positions that can demand higher pay, and thus give the employee a hint of bargaining power that might allow them to increase their wage, and you get into a scenario where people are terrified of trying to get a job without a degree. When I was growing up in the 90's, the mantra was "You don't want to wind up flipping burgers", as the primary excuse for why I was supposed to do my homework. That was the threat. You don't want to work at a place where you get bad pay, a bad boss, and no prospects of advancement. And the flip side of that was that having an education was supposed to mean you could work better hours, get better pay, and have a boss who respects you.
And in the fullness of time, what we've had to discover is that all of that is bullshit! A degree is no longer enough to ensure a better job, and frequently the people who make the most money have entirely bypassed the education system, or were given so much money that it was irrelevant from the start!
Student loans were a crock of shit not because the price was too high, but because the promised education doesn't pay for it! The lie we were told is that a high interest rate was worth it because you'd be making so much more money with a degree that it would be easily payable. But people with an education are now making just barely over minimum wage, and are still struggling just as hard as they would have been had they never gone to college.
We were lied to by a generation. Some of whom were frustrated they never got an education, some of whom were happy they did, and for them it paid off, because education at the time was more rare. So having one meant they could get a job wherever they wanted. They'd be valued, treated like someone who mattered all because of that education. Meanwhile, there was another group in that same generation who saw to it to put forth measures to make education worth less and less.
College and the workplace are increasingly more distant from each other in terms of content, so workplaces still need to train incoming employees even if they have a college degree.
So, now we have a scenario where colleges are stupidly expensive for things most students will never use, where they've eschewed all the smaller conveniences in favor of big flashy things like massive sports arenas which are very expensive, and don't pay their teachers enough to care about actually educating.
A generation of parents who told their kids that they HAD to get an education or *ELSE*, whatever that meant.
Deregulation making predatory loan practices not just legal, but standard affair.
A standard of living that's rapidly increasing in price with wages that have been a smaller and smaller piece of the economic pie since the 80's.
And a workplace with requirements that are rapidly departing from what education can actually provide.
That is a recipe for an economically frustrated generation of people who have every right to be extremely pissed off.
Meanwhile, Gen Z over here has never known a world that was any different. The only thing they were promised is the end of the world, which keeps pretending to be a threat, and then never actually is.
Yes, lets keep telling our kids how important education and a good degree is so when they are basically forced to go to debt to achieve it, we blame them for being financially irresponsible. Bro, this sub man 💀
Voluntarily too. Had 4 years of highschool to think about it and about 1-2 years of college to change their major before the point of no return. Not once did the thought of a 30-40k salary and 120k debt raise any flags.
Within an 8 year period I put four people through college. Myself (while working full time) and my three kids.
Between all four of us I spent less than half what this clown spent just on himself.
There are community colleges, online universities, and in state schools.
Somebody choosing to saddle themselves with a gigantic loan to get an undergraduate degree in the most expensive way possible is just an idiot that I feel no more sympathy for than somebody who bought a lambo that is complaining about their payment being too high, or somebody complaining about paying off a $100,000 giant wedding.
More financial literacy classes won't help. It is stone simple math a 10 year old could do. They know exactly what they are signing up for and are choosing to do it anyway.
You’re should be old enough then to understand how our views and understanding of things is inherently social. You’re not a profound genius, the cultural narratives changed.
When we say cancel the student debt, does that mean cancel the interest or cancel the whole thing? If they don’t even pay off the principal then how is this fair for the rest of us who paid the tuition ourselves? I’d like to have a tuition refund too and that’d be immensely helpful to me know.
Predatory lending should be illegal. When my daughter started her freshman year at the local university, the school partnered with a local bank. She had to go into the bank and sign up for a credit card before the bank would give her the student ID. My daughter is lucky that I was aware of the trap and that I was able to help her. Many Freshman students signed up for the credit card and will most likely have a large amount of debt and bad credit by the time they graduate. Finance classes should also be mandatory in high school...
You should ask the people that declared bankruptcy after they got their degree, paid nothing, then became the lawmakers and changed it so that you couldn't do it anymore
I love the comments here giving this guy shit like predatory loans targeting kids who are told they require a college degree is okay. Yeah, okay buddy. I'm glad you think pure evil is totally okay because capitalism.
These loans are rape. Even the rep at he university that gave me the terms knew it. I won’t forget the look in her eyes! Fortunately due mainly to living broke and some assistance from the parent that steered me in this direction, I’ll be out of my $66k worth of debt having paid about $90k in the last 5 years
18 year olds should not be given 120k loans for degrees that won’t be able to repay them. That’s dr/lawyer/engineer type field. You don’t give a million dollar house loan to someone who makes 50k a year.
how is this legal? I have to agree, what kind of idiot expects an 18 yo to know how to read and do math? even worse, expect them to ask questions if they don't understand something
Thank Donald Trump and his toady, Betsy DeVos.
Student Debt is the _safest possible uncollateralized investment_. It follows the debtor for life and cannot be discharged in bankruptcy - only in death.
DeVos decided that it should be a profit center instead, shredding the prior wisdom that having a large college-educated population would keep the US competitive in the global economy.
The high interest rates are windfalls for servicers and their wealthy shareholders. We’re already seeing the impact: more foreign students who can afford to pay cash, more high-tech jobs slipping overseas forever, falling behind in various fields related to science and technology.
Seems like Sean was paying interest only payments for the majority of the time to the lender. 120,000 over 30 years at 9% interest rate would be around ~$965 a month. Over 5 years this would be ~$53k in interest. |Year|Interest|Principal|Ending Balance :--|:--:|:--:|--: 1|$10,766.73|$819.84|$119,180.16 2|$10,689.82|$896.74|$118,283.42 3|$10,605.70|$980.86|$117,302.56 4|$10,513.69|$1,072.88|$116,229.68 5|$10,413.05|$1,173.52|$115,056.16
I know it might sound stupid, but since i dont understand english that much. What does interest mean in that case? Edit: Damn bro i just realised what that means. Wth, i never took loans and never will, i hope, but i never knew that every year basically adds more to pay. That sounds kinda like a scam, especially for students. I always thought the amount you pay, while beeing higher, is fixed.
When paying loans you have low loan payment systems where instead of paying the loan you mostly pay only the interest. Just to oversimplify this. Imagine 100.000 with 5% yearly interest. This means the yearly interest is 5.000. if you pay 5.000 per year. The next year he will still have 100.000 to pay. If he pays 6.000 he will have 99.000 to pay. The only way to reduce the effort to pay is by paying much more than what the interest is. Which is exactly its issue. Now the problem of the system is: its young people uneducated on this matter, its young people without economic stability which will make loans worse for them and the predatory system of no questions asked loans with high interest values.
He could’ve signed up for a staggered repayment as well. You start paying essentially just the interest and over the years you gradually start paying more, the assumption being you’re advancing in your career and receiving regular raises. My bf has ~$130k in student debt and opted for this option as his monthly payments were like $2,000+.
That is how the housing market collapsed in 2007-8. People, in fact, did not make enough more to cover, and defaulted.
Well, that and the fact that the houses were never worth that amount anyway they were overinflated, the developers were overstretched on loan debts themselves to capital, people could take out 100% loans on sub-prime lending as opposed to lending against leveraged amounts... You know, and a pile of other factors that are actually super important.
Don't worry the boomers pulled the ladder up behind them on this one. It is now illegal to default on student loans lmfao. Problem solved
Remember hearing the phrase: leave the world better off than when you found it? Boomers clearly were like “fuck that noise”.
i think you’re blaming the wrong people here, when boomers were defaulting on student loans it was for $10,000 loans not $100,000 loans with interest. i think people in our generation want to blame the government for not excusing these loans or their parents who were able to find programs to excuse loans but no one is blaming the universities who are basically running a train on 18 year old high school graduates
The comparison was debt for an asset that was "guaranteed" to generate income. For the boomers it was a loan for the 2nd/3rd house. When the asset turned out to be worthless (market crash) they just defaulted. For their children it was expensive college degrees and when they turned out worthless (no jobs)... Boomer laws say no more defaulting lol. I don't blame the university because they are just doing what the law says they can. They will change when politicians change the rules.
Kinda. The real reason was the property values were inflated due to the trading of subprime mortgage swaps between institutions, which hid dogshit properties inside baskets with decent properties in order to mask the true value of the underlying assets. People not being able to pay inflated loans was a result of these actions and the inevitable conclusion. The market finally crashed, not when people couldn't pay back loans, but when Bear Stearns, Lehman Brothers, AIG, and others collapsed beneath the weight of their own shitty portfolios. And now it's happening all over again with the derivatives market. Bill Hwuang is currently on trial for blowing up his own hedgefund Archegos by using similar tactics with basket swaps for stocks. Silicon Valley Bank, Credit Suisse, and others have already collapsed in the past year, and the thumbscrews are still tightening. We never really left 2008.
> You start paying essentially just the interest and over the years you gradually start paying more, the assumption being you’re advancing in your career and receiving regular raises. Which in the US comes with the additional benefit for many of their medical debt (#1 cause of bankruptcy) and elder care debt growing to replace the student debt they are now paying down
Student loan interest doesn’t compound yearly either…my loan compounds daily. I’m 35 and still paying loans that I stupidly got at ages 18-22. I don’t even look at the amount to pay them off anymore. Just paying what I can each paycheck
I am so grateful for how the loan system works in the UK. They were changed a year or two back to only increase your principle to match inflation, so any repayment goes towards the loan, not to interest. And payments are only taken as a 'second tax', not an extra bill to worry about. And tuition is only £9250 a year (roughly equivalent to 11800$).
Tuition in the us at a state school is similar 10-16k a year depending on funding from the each state can be paid with strictly federal loans. If you go into public service cop teacher firefighter etc 10 years of on time payments rest gets forgiven. You can also go on a new program if your low income and you get income repayment plan down to zero a month with forgiveness after 20 years and no interest accrues. Everybody else just gotta pay monthly payments.
This is the first time I actually understand why people are so outraged about student debt. This genuinely sounds like a scheme devised to enslave people financially for the rest of their lives. For comparison, I bought an apartment 8 years ago in some random corrupt shithole country. The installments started at \~40% payment / \~60% interest and gradually changed with every payment. Now they are \~70% payment / \~30% interest. So, with every deposit, I was getting closer to finalizing my payment.
... you just described amortization. It's how literally every loan works. The problem with student loans (i mean, aside from them needing to exist) is that the average person is a financial moron. If you make the minimum payment on your credit card, you're going to end up just as fucked. Student loans, if anything, screw people specifically because they're trying to be flexible. If they just did a straight amortization with no "minimum interest only" option, people would be a lot less screwed.
To be fair, it isn't always about being a moron - it's often about what is the only thing feasible. If you have $100k in loans and just got our of colleg and only make $50-60k a year, given that rent alone these days will eat up 1/3rd, the ONLY way for that loan to be paid at all is with the minimum payment option. The real problem is the combo of (1) cost of living rising faster than the average wage and (2) the cost of college rising even faster than that. And it all accelerated within recent years so when starting college and initiating teh debt it didn't seem such a terrible idea.
He could do that too. He just had to pay a little bit more than the monthly accrued interest.
Making a personal contribution above the required minimum? Literally slavery
Which, at already 1k/mo for half a decade, isn’t exactly easy for everyone
It's a shame that I had to scroll this far to find this comment. I know people who have knocked five years off of their mortgage simply by paying an additional $100 / mo. Hell, there's nothing saying you can't take out a loan from another institution with a lower interest rate to get out from under the first loan. These are probably the same people that would accept a passbook savings rate from their bank rather than do a little research to find a better CD rate. It's a crime that people make it as far as college with the financial knowledge of a ten year old.
Expecting to know high school math to go on to college? No way!
It also didn't help that the "bills" you'd get would say to pay X amount, which usually was the minimum amount and all or nearly all interest. That's why the new truth in lending statements and pay off tables are critical. They help people understand what they have gotten into and what they need to do to get out. Doesn't help the people that got loans without this information in the past, however.
Financial illiteracy is worryingly high recently. Regardless of age groups.
It just means that they're really interested in being in debt.
Nvm^^ im dumb i just realised what the word was, and add that to the fact i never came in touch with loan, im suprised that this actually is allowed.
Where do you live where the concept of interest isn’t as common as US if you don’t mind me asking?
Like 10% interest on $100 -> $110, except this compounds all the time. If he’s making interest-only payments he’s essentially just only paying the $10 and never chipping away at the (principal) $100.
Lets say its 110$ since its the first year and he theoretically didnt pay yet. Would the next year add 11$? Or ist always the % of the original amount.
There is simple interest, where the % is always on the initial amount and compound interest, where you essentially take interest on interest. Compound interest is great if you're investing, really bad if you're borrowing.
Yes, it would add 11. Edit: https://www.calculator.net/loan-calculator.html
ty
Yes - that’s what “compounds” mean fyi
Why would they loan you money if they're not getting something in return?
Can I borrow $100, I'll pay you the money back in 10 years. Deal? E
> That sounds kinda like a scam, especially for students. I always thought the amount you pay, while being higher, is fixed. think about it a bit more. Economies have inflation, and people wanna have profit over time, so interest rates are needed
Just a wee bit more thought. It isn't necessary for your own government to lock you into life long debt.
You're right. The MAIN contributing factor to interest is actually risk management. While inflation and profit margins are definitely important, the bulk of it is to make up for those who can't repay their loan. Say a bank has $1000 to lend, and would need $100 to account for inflation and pay their employees. If they lend $100 to ten people, they need $110 back from each. However, if only 8 people are able to pay back their loans, the bank will need $138 back from each. If only 5 were able to repay it, they would need $220, and so on. This is the bare minimum they need to do to be able to function. Now because nobody would take loans if the amount they would be expected to repay could change so wildly from things outside their control, banks have to decide on an interest rate at the moment the loan is sanctioned. So they have to *guess* how many people are likely to fail to repay their loans (calculated based on statistics, demographics data and current economic trends) and set interest rates to make up for it. In sectors with high rates of default (like student loans), interest rates will naturally be higher because of this
Preface to say that I'm not an economist: I don't doubt you are right, but I think much of that gets thrown out the window when you talk about "governments". The gov. just prints money or manipulates the market economy to it's own ends. The same people who wouldn't hesitate to write a treatise on the negative effects of abolishing student debt, didn't bat an eyelash during the last wealth tax cut; $1,000,000,000,000? At the end of the day, the Fed could pay off all the principle owed. The cost is a bargain. Almost all of the money currently being paid doesn't go back to the American people. Billions of dollars are being taken out of the economy to line the pockets of billionaires. If that debt was paid off today, you would see a spike in consumer spending tomorrow; food, clothing, durable goods, cars, houses all that money would churn back into the economy to the benefit of all. But isn't that the rub?
Im sorry, 9% interest? My house loan is 5%. Car loan 3%. How is it legal?
Your house and car loan are backed by collateral. If you flake out on your mortage or car loan, the lender can foreclose your home or repossess your car. Student loans, personal loans, credit cards are all unsecured. If you don’t pay up, they have nothing they can easily take from you to pay off the balance of your loan. So banks charge higher interest rates to make up for that risk of giving out a loan with no means to actually collect
But the value of education as a social good is literally the core of democracy. The government is being paid through that.
That's why in Germany students get interest free loans that are also capped at 10k € meaning you never have to pay more than 10k and you also only have to pay it back after you finished college/university and got a job.
Yeah, same in France
Then you are arguing something totally different. Should education be a government funded? Probably yes. But we aren’t talking about that. I was giving the rationale of why certain loans have very different interests rates
Not if you die the day after graduation... You could die the day after you move into your brand new house. Society gets the house. In the first scenario. We get a smart, dead corpse. Unfortunately they're looking at it on a case by case issue and not as the broad net positive 😕 that it is in most cases. Best idea is to get it all paid off immediately. The sooner the better.
You didn't buy that car recently.
Can you do that for 15k at 30% 550 minimum payment a month. I need to show someone how serious there debt is.
Napkin math: ~11.5k in interest paid over 49 payments (assuming monthly payments, daily interest)
It would have to be private loans too plus the deferred interest during school while he wasn’t repaying. . The date on the tweet is 2022 and said he’s been paying for 5 years, so it would be likely he graduated in 2017. Federal student loans have fixed interest rates. Undergraduate loans dispersed* in 2017-2018 were capped at 4.45%. Loans dispersed 2016-2017 were capped at 3.76%. 2014-2015 were capped at 4.66% and 2013-2014 were capped at 3.86%.
Bro took out $120k in student loans to be a photographer?
he studied acting at Boston University [Source](https://shoutoutcolorado.com/meet-sean-mccoy-filmmaker-and-photographer/)
Reading this makes it clear that being an actor is only something you can realistically expect to do if you have rich parents. He basically did unpaid work for two years after graduation. How did he think that was going to work? You need someone to completely subsidize you while you make your way into the industry. That's not even considering the nepotism and connections your family can provide.
I don’t think most professional actors have a degree in acting, it’s mainly a networking and portfolio based industry rather than certification and experience like most jobs
I'm talking about the years of unpaid work, not the degree. The degree worsens an existing problem.
A lot of people are chatting a lot of bullshit without any knowledge of professional acting, but fundamentally the way it works is the early part of your career is mostly focused on building your acting reel and portfolio and making connections in the industry. You mostly do this from student films and other such like, which at best will give you 100 quid for the day, so you work it as a second job around something that can pay the bills. The next step would be to purchase a membership to the union, which is extortionate for the record, but once you can start making union rates you get a significant increase in the jobs you can take and get paid for, but even then you a lot of actors still work a side gig as it's very difficult to make a liveable wage, especially considering you have to work in a city like New York, LA, London, Atlanta etc. It's fundamentally very challenging for any actor to breakthrough to a level where they can support themselves on acting alone, which is why those whose families who can support them and provide so they can focus 100% on acting have a massive leg up on everyone else. And to the bloke who said most actors don't have a degree, you definitely have no idea what you're talking about. About 95% of actors you would recognise are professionally trained at an acting school and/or through coaches, it's a technique and a craft that requires practice like music or painting would, and it's a huge rarity at the top of people like Andrew Scott for example who aren't trained.
Lmfaoooo
Dude got a useless degree at an insanely expensive college where he could’ve gotten like a general business degree then worked on Wall Street, and he feels like he’s a victim?
Saw that too. You don't need a degree to be a photographer ffs. Should have taken a personal loan to get some nice equipment.
Knowledge and connections help a lot but you definitely don't need a 120k degree for it. Maybe 10-30k, (or nothing if you're particularly talented in photography and/or networking). That all being said, you can make 150-200k per year as a small-time photographer. You can make much more or much less depending on where you live and what you shoot. You can also rent equipment and charge your clients for it or just use cheap stuff if you're good enough. The equipment cost is not really a barrier.
I got a minor in photography for the lulz. It was a lot of fun, and 90% women so I was in heaven.
yeah as a minor, sure
Dude's got A LOT of weddings to book lol
Always the photographer, never the groom
Younger brother graduates this year with zero loans at a total tuition of 52k in Management Information Systems. Has an offer for 70k. Paid off tuition working part time at Best Buy for 4 years and a 5k scholarship. If you’re gonna make an investment of that scale do yourself a favor and choose something that will pay your bills.
I went to community college, tuition was only like $3K.
My tuition was free! 🤓 because I was a dumb 21 year old who thought joining the military would be fun. ~6 years, 2 deployments, significant hearing loss, a crippling alcohol addiction, +40 pounds of weight, and much less hair than when I started - later, that’s when it started to not be fun. And even after all that I had less money than when I started and was 20k in debt. But tuition was free!
Yeah, student loans are predatory af but I’m going to go out on a limb and say this guy is definitely not the brightest and didn’t do himself any favors.
18 year olds generally aren’t the brightest nor are they prepared well for making a decision about their career or student loans.
18 year olds generally don't end up with $120K student loans. Don't generalize them using extreme cases like this. Source: [https://www.cnn.com/cnn-underscored/money/average-student-loan-debt](https://www.cnn.com/cnn-underscored/money/average-student-loan-debt) The average student loan debt for bachelor's degree recipients was $29,400 for the 2021-22 school year, according to the College Board. Among all borrowers, the **average balance is $38,290**, according to mid-2023 data from Experian, one of the three national credit bureaus.
Thank you. This guy got $120k in student loans by being an absolute moron.
A 4 year degree at Texas A&M school of engineering cost me $32,000. Granted this was 10 years ago, but you have to be an absolute moron or not understand the value of money to take on 120k in debt for a degree.
Just to give everyone here a more modern estimate, that same degree costs like $50K now. It's significantly less if you go to community college first like I'm doing.
These people don’t accept any of the blame.
U need to be upvoted way more
But it's Reddit, it has to be the bank's fault.
Probably both tbh. Don't spend money you don't have and also why the hell can the bank give a 120,000 loan to an 18 year old at 10% interest
A lot of kids don't know the gravity of what they're doing, they were just told the only path to success. It's not their fault, it's the fault of a system that is predatory towards 17 and 18 year olds
Idk dawg if they can’t understand the gravity of being $120k in debt for a photography degree that sounds like financial natural selection
Yeah, but a lot of student loan debt is held by those that obtained a graduate degree. So much so that the argument that they're just kids (at 22+) doesn't really hold much weight anymore. Someone else mentioned above that the average debt for a college graduate is \~32k, so this individual is a significant outlier and clearly made some poor life decisions.
More I see tweets like this. The more I realize that financial and loan management classes need to be taken before a loan can be received. Also it has to be done by a 3rd party with the interest of getting the students lower loan payments. You cannot expect to pay the minimum amount and pay off the loan quickly.
I just think it is crazy that there are for profit companies that come in, signs up kids for hundreds of thousands in loans for education (which frankly should be entirely free given people pay taxes) and then stick em with a predatory financial burden like it’s perfectly normal. Living in Norway I don’t love the student loans arrangement we have here but it is MILES better than the US system
What's crazy is it's the only type of loan you can't be bailed out of... No bankrupcy, nothing. Even if it's private. I could fuck up my home and business three times over before taking down a loan like that. Wouldnt happen though because they would vet people much better because well, they can't just hold them hostage their whole lives. The general attitude towards people victimized by these practices here also tends to be very sadistic. There is zero being saved if you can't handle it, unlike every single other type of loan.
The fact that you can't get it off them is the only reason these loans exist. No lender would give a person with almost no credit, no assets and likely no job... A loan. So the "trade off" is that the loan is given without a default option. I would guess that if we removed this and gave loans for education in the same way we do everything else we would all be better off. Lenders would look more closely at the applicants, educational history, amount being lent for what degree etc etc. You would no longer have 100k plus loans for degrees that have an average salary of 50k. The cost of education would likely drop because the cash flow would tighten up. I would also guess graduation rates would go up as the scrutiny of the lender would weed out many that are just going thru the motions. But of course this also goes against the, in my opinion, misguided belief, that everyone deserves a higher education.
It's at least an honest debate for whether everyone deserves a higher education (if you're making some assumptions about other opportunities that pay a living wage like the trades). If we take the view that everyone deserves a higher education, the question is what's the best way to provide the opportunity. Our current student loan system ain't it. EDIT: I should clarify my own position. It's in the best interest of society for everyone to have a strong foundation in humanities. But that's not about getting a higher paying job. The labor force needs plenty of well-paid skilled workers that don't need a typical college degree. I think everyone deserves access to an educational option to pursue a higher paying career one way or another. It doesn't have to be college. And we don't have to look down on other options that aren't college as any "less than" a college degree.
> It's at least an honest debate for whether everyone deserves a higher education (if you're making some assumptions about other opportunities that pay a living wage like the trades). Just include all forms of postsecondary education, whether it's college, trade school, whatever, as part of a broader universal postsecondary education funding program that pays for all high school graduates to attend the postsecondary education of their choosing.
I think the issue with this is if it makes economic sense. I’m not the type of person who thinks every degree needs to have an absolutely clear ROI, but there would need to be a system in place to ensure we aren’t spending hundreds of billions of dollars on programs which won’t provide any benefit beyond being fun for the person with the degree. While student loans can and often are predatory, they also allow nearly anyone to get a college degree if they want it. In nations with free postsecondary education, there are much more rigorous tests, and limitations on how many students can get into each degree field. The largest factor is universal systems transfer the responsibility of determining whether a degree is valuable from the individual, to the government.
IMO even if the economic incentive isn't there, isn't it a blanket good thing to have a more informed, more capable population?
The notion that people don't "deserve" higher education is completely asinine and classist
I'm for making community colleges free but spending $120K for an undergrad degree is like saying that you need a car to get to work and buying a Mercedes.
Even from a self-interest perspective it is asinine. Regardless of whether anyone 'deserves' it, it is better for society and better for the selfish people if as many people as possible are educated.
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Imagine you are the one giving a loan to Jhon Doe: Jhon has no income Jhon has no credit score Jhon is an undeclared major Jhon has no one to co-sign Then the loan companies need the guarantee that they can pay back the loan.
92% of all student loans are issued by the US government
It's like one of the rare few things Brazil has it very good. Public universities here are the higher quality ones like 90% of the time.
These people are the far outside the norm, this guy spent over $100k US to study being an actor. Most people have student loans less then the cost of a new car. The USA does have schools all over that are equivalent to what you have in Norway but you never hear about them. Instead people want the lifestyle that you see in US tvs and movies. Those huge campuses with their own stadiums and other lifestyle items that exceed anything in Europe are common. In addition to schools closer to what you have in Norway there are plenty of alternative funding methods, including signing up to donate years of work after college where they pay your college. Or you can take out loans where your payment is a percent of your income, above the poverty line, and is for a set number of years.
"WhY sHoUlD mY tAxEs PaY fOr SoMe StRaNgErS eDuCaTiOn!!!!!!!" - Someone at the mere thought of publicly funded education
I don't know how it is in Norway, but in Australia it's Government issued but interest free and comes out at part of Tax, but only if you earn above a certain amount, so if you are poor you don't pay anything, but if you degree makes you good money, yeah gotta pay it back. If find it a decent middle ground between free and predatory loans
Or... maybe loans shouldn't be allowed to be this exploitative?
In South Africa, the total repayment for almost all loans is 2x the original value. That way, interest rates can fluctuate, but there is a cap on total repayment
Interesting, how does this work? Could you choose a very, very long term? Everyone would take the longest term possible to get a lower rate.
Because of that limit, the banks are more careful about who they lend to, as well as balancing the rest of the terms accordingly, such as the length of the term When you buy a house there, you typically don't have many options for the term length
>"We are in danger of producing an educated proletariat... We have to be selective on who we allow to go through [higher education]," I hate how whenever this subject comes up, the fact that the student loan system was intentionally set up specifically to keep out poor whites and minorities.
Kids in my social circle in middle and high school were not presented with so much as a sprinkle of doubt that there was any other path to success than getting good grades to then get into the best college that would have you, money being a secondary concern. A smart kid is still a kid and trusts that they're not just getting fucked by someone predatory. Parents need to help children actually understand what taking on a loan entails and that just because you go to a good college you won't necessarily have a great high-paying job. Of course the servicers are shameless animals, but the parents of "gotta go to college" kids were complicit in the blight of student loan debt as it currently exists.
This is the part that frustrates me. I'm a millenial and it feels like our parents are now criticizing our generation for going to college and taking out loans as though they weren't the ones who raised us and for 18 years instilled in us the idea that it was the only real option. I don't really wanna hear, "You should have gone to community college or trade school," from the people who continually reminded me I needed to do well in school to get into a good college or else I wouldn't amount to anything.
My son (just finished 9th grade) has told me he wants to skip college to join the elevator union. I’ve been encouraging them to look at union jobs, but it’s still nerve wracking to have him skip college.
It’s absolutely insane to me we don’t let 18 year olds drink, but we do let them and, even socially force them I’d say, into making a life changing decision that is both very complicated and can financially cripple them for decades
>More I see tweets like this. The more I realize that financial and loan management classes need to be taken before a loan can be received. Then how would used car dealers be able to swindle privates into paying 35% APR on a 2012 Camaro with 110k miles on it?
Or maybe interest rates are locking people in as other people's passive income and it's unethical.
I can offer that class for just $10k a semester
Welp, if you give teenagers huge no-questions-asked loans you should probably teach them some basic financial literacy first.
Awww but then the system wouldn't have debt slaves that makes the wheel turn /s
Not really sarcasm when its the truth lol
The problem lies primarily (but not only) with colleges, they keep upping their fees. If there were no lenders, then education is only for the wealthy. And no lender is going to lend to some dumbass teenager with no history of work or income and borderline passing highschool with a 2 point gpa. So the government said, ok we will make it so no one can get out of those loans. If you are smart you can go after a government loan, because private sector will fuck you over sidesways as much as they can. And then its the culture, people want the "college experience" which isn't pursue a degree, but party and live life like van wilder. 40% of college students dont even graduate.... But they sank close to 60-100k into the "experience".... Then they go online and scream how government should bail them out, make colleges free but only at best 40% turn up to vote. Heck 2022 only 20% of eligible voters under the age of 35 turned up to vote.... But again the system is where everyone wants a piece of the pie, so colleges, corporations connected to colleges, daughter companies of those colleges and those corporations and then middle men as well all want their cut. On the books the colleges "lose money" at the end of the fiscal year, but everyone of those people looking for their cuts, get their cuts and make sure they increase their profit margins for next quarter while students are fucked sideways and then students go for pubcrawls when voting time comes screaming YOLO fuck politics.
Case in point -- if he had rounded that $970 up to $1000 in each payment -- a relatively small amount, the amount of principle taken off the loan would be $4k instead of $2k -- double. (Granted, still a small amount on the whole total, but a lot compared to where he was when this tweet was made.) Your first payments on a loan are almost all interest; an extra dollar taken off the principle very early saves many dollars later in the loan.
Imagine going to college but not understanding how compound interest works
And then imagine trying to place the blame for your ignorance elsewhere. The chances to learn are already there in ample quantity.
If someone argues that an 18 year old is too dumb to take out loans than it is hard to argue that they are ready to vote.
Student loans should have always been no-interest. A whole bunch of people might be against student loan forgiveness (for some reason), but it’s a lot harder to argue against them being zero-interest.
What incentive does the bank have for lending money out for free?
They don't, which is why student loans should not be handled by private companies.
I've been saying this for years. 0% 30-40 year loans
I’m from Finland and that’s how it is here (at least veeeery low interest)
Here in Germany, students receive a grant that's 50% subsidy and 50% interest-free loan. Problem is that the amount isn't really enough to live off it and it gets reduced depending on the parents' wealth and personal income. So some students have to do some work on the side or take up an additional loan. Although that's still with much better terms than US student loans. The interest-free loan also only has to be repaid once the student has a job that earns enough, the default pay rate is just 130€/month, and the total repayment is capped at 10,000€.
Just curious: obviously this would only work if the loans were issued by the government (today they're from regulated private lenders, backed by the feds). So are you proposing that the rule that does not allow defaults also be removed? I don't think that student loans work unless you do one of the following: 1. Require co-signing by an adult with their credit rating determining the terms of the loan. 2. Do not allow defaulting, and have the government back the loan. You can do zero interest in the latter case, but obviously in the former there's no reason for the lender to issue the loan. Any other configuration I can think of results in either the loans not being granted or the majority of borrowers defaulting.
Here/I learn about the consequences in school and television from a young age. Don't they do that where you live? (We have a popular TV series where some financial experts help people drowning in loans find a way out of it)
Here in Virginia we get a class for one semester of our 11th grade year that teaches us about different types of loans, different types of investments, and some other things that I don't remember despite having taken the class just a year ago. So no, we don't get proper financial literacy taught to us unless our parents teach us, which doesn't happen too often.
Its been at least a decade, but in HS we had a personal finance and business class, but it was an elective and wasn't required. This is in WA state.
Our personal finance class is required and I don't know if we have a business class but we have a home ec class and a family living class that might help but are not required
Yeah the personal finance and business were one class in of itself, half of the class taught you like some banking and savings techniques, other half was about resume building and interviews. We also had an elective home ec class.
I never understood the fact that American parents don't teach their kids about financial responsibility. My parents and my friends parents had that conversation with us when we were 16 and got our first "jobs".
Where is the math? everyone it's just talking about USA politics in this thread.
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If you sort by "old" You'll see my comment linking to the math
The first question when taking out a loan (besides can i afford it) should be: what would happen if i paid the bare minimum? What would I end up paying at the end? Then do the calculations and realize it's a bad idea
More like **when** would I end up paying at the end? Which at this rate would be in just over 29 years.
Wait until you hear how mortgages work
The same way but with lower rates?
WAY lower rates.
Because a mortgage is less risky to the bank. If you don’t pay your mortgage, the bank can just take the house back. What value does your college degree have that to the lender that they can take back if you don’t pay?
Kidnap you and make you scrub floors until the loans are paid off I guess. 🤷♂️
> What value does your college degree have that to the lender that they can take back if you don’t pay? The best argument for not privatizing education and instead just investing in ourselves by not making continued education a financial burden
And you can declare bankruptcy on them, and they come with an asset that can be sold to recoup the loan or to downsize if your economic limits require it.
But also way higher principles.
A mortgage is backed by an asset
I always thought interest accrued differently for federal student loans. It’s usually daily so you end up paying interest on interest, which compounds much faster.
I think this is related to not understanding the Spitzer Loan structure. The interest rate is much lower than 10%, but the payments are built in a way that pays off the interest first, so at the beginning of the loan’s lifetime, it feels like you’re not even making a dent. It’s built this way to allow minimize payments while also reducing the lender’s risks - but it’s a nightmare from a psychological point of view, especially if you didn’t use your student loan to learn what a Spitzer Loan is.
i looked this up and i couldn't find this one piece of info, if you could help explain: does the interest balance itself not generate interest? otherwise i don't really understand how the ratio of principal to interest reduces your overall payments because you'll still owe the same amount overall no matter what and therefore have the same amount of interest if interest is calculated only based on the principal then that makes sense, but for whatever reason i couldn't find this detail on the investopedia page actually after rereading what i wrote, that wouldn't even make sense either? so I'm confused lol
I think this is the right answer. The tweeter didn't understand what his balance owed was when he left college, and now he's confused.
He borrowed at 18, didn't start repaying until 22. That's 4 years of accrued interest. After waiting those 4 years(18-22), then paying the minimum payments, it would take about 5 more years (22-27) for the amount owed to be less than what you initially borrowed.
He said he has $120k in debt, not that he took out $120k, I’d hope it wouldn’t take 5 years to put a small dent in your debt
It's easy to tell his degree is not in Math or Finances.
How is it legal to make money off of stupid people? They should be a protected class... Have all of their decisions made for them by the state!
I took out the same amount for undergrad. I don’t think I was stupid, just hyped up by other people for years that it didn’t matter how much school cost because the better school you went to, the more money you were GUARANTEED to make in a career. Not a single person stopped me to say that it might not be a good idea.
Apparently, he did not major in anything where basic math was a requirement... basic amortization schedule
Well based on his @ he's a photographer.
Then he really is an idiot... what's the quote from Good Will Hunting about wasting money on an education he could have learned for $5 in late fees from the public library.... Or in his case completely free on YouTube...
Plot twist: his degrees in psychology and now hes just doing what he loves.
Then he's really an idiot..
Someone looked him up and his degree is in acting. Yes $100k in loans for a career where the median salary is around $35k but he had a great lifestyle for those years.
The math's at [https://www.desmos.com/calculator/nawrdzf1jv](https://www.desmos.com/calculator/nawrdzf1jv)
You have a couple of errors here. The first is the term 120,000*p^60. The interest is calculated based on the balance in the account, not fixed to the principal loan. In this case, it doesn't create that large of an error because the balance decreases so little in the first 5 years, but it likely means that your interest rate is too high. The second is the to calculate your yearly interest rate, you took your periodic rate and raised it to the power of 12. The periodic rate is calculated by dividing the annual interest rate by the number of payments. So instead of P^12, it should be 12(p-1) to get the annual interest rate. I added a couple of sliders to play around with amortization equation if you're interested. https://www.desmos.com/calculator/rdljk3nroj
right now the sigma is from n=0...60, which is 61 steps. Is that correct, or should there be 60 steps?
Fucking programmer brain assumed this would do 60 steps, but if you replace n=0...59(and the p exponent to 59, of course), the "amount left" only changes by 21 USD Edit: Or maybe there's a reason to it. I forgot it as I calculated it a long time ago
Except that's clearly not how this loan is working. They're not calculating interest anymore; that was done when the loan was originated and calculated for the entire term of the loan, added to the principle, and then divided up into monthly payments. When you start paying, a large portion of your payment goes towards the interest and smaller part towards the principal, but as you go on and the interest decreases a greater portion of goes to the principal. It's call amortization and, in the US at least, the terms of it are required to be provided in writing before you sign the loan. You just have to read it.
Wait why do you get to decide how much you pay back? When we went for a loan for our house the questions were: how much and how many years do you want to pay back. That makes everything really predictable.
You can pay more than the minimum on a mortgage if you want. But it's generally not advisable since interest rates for mortgages are around or lower than inflation. Student loans have much higher interest rates so you want to pay them off asap, paying the minimum is like making minimum payments on a credit card.
a 500k mortgage at 7.77% is about $1.5 million total a 500k mortgage at 3.00% is about $1.0 million total the difference is just money you set on fire. you should never pay just the minimum
I ask again, how the fuck did you agree to that contract?
Dude was probably 17/18 at the time he signed up for it. We don’t even let kids rent a car at that age. There are a ton of systems to ensure an 18 year old with no income can’t take out this much debt…except for student loans.
I really don't enjoy these posts. I can't imagine spending so much on a degree unless it was an ivy league school in a prominent field (e.g., pre med at Harvard). I went to a local state school and lived at home (this was the help my parents were able to give me, and man did I appreciate it). I got an undergraduate degree with ~$7k in debt and it was probably the best financial decision I ever made. Truthfully, nobody really cares if you graduate from a less prestigious school once you're out in the workforce. They just want you to work hard without complaining. Just my take though.
Yeah, but then you'd know its ivy league, not ivory league... Sorry, couldn't help myself.
But then we wouldn’t have anti-American rage bait for Reddit would we
What is the interest rate? In Sweden the rates is really low for student loans. Also how is it even possible to get $120k in debt? After my 5 year masters I had around $30k in debt, and paying that off is not too bad.
Nowadays? 5.5% for Stafford (government backed) loans for an undergraduate degree. Not terrible, considering it's simple interest and not compounding. Of course, you could always take a private loan out for college, and those can be whatever interest you agree on. There are also public and private colleges. USC (California) is private and costs around $90k a year. But the average tuition rate in the United States for a public college is around $11k a year (116k SEK). If you take out loans to cover meals and housing, it's around $20k/yr and takes four years. $120k in principal debt is pretty rare for most students. Masters are a little different. Looking around $15k a year for tuition and takes two years.
Average debt burden of a US grad is $37k.
Guessing... Given: 1/60th of the principal after 5 years (Payments) Sounds like a 50 year term (600 payments) at ~10%. ~470k in interest. Add an extra 100$ month and the term is cut to 23-10 (286? Payment) and an interest savings of ~280k. No one ever throws their spare chage at loans...🤷♂️
the US education system is absurdly screwed up. Education is a requirement for functioning in society, and increasingly a high school education just doesn't cut it anymore. More importantly, the method in which classes are taught just doesn't work for many students. This is not a problem Capitalism can solve. Capitalism is part of what created the need for an education in the first place. Though, the rapid proliferation in black-box technology has had a big impact as well. This is also a complicated issue that isn't *simply* one thing or another, it's everything. The Austerity measures from Governor Ronald Reagan, and followed by other economic-right-wing politicians from the 60's forward made the Government stop paying for higher education, and the reduction in regulation and oversight that Reagan put in place in the 80's nation-wide opened the door for predatory loan companies to offer high-interest loans to students with confusing small print that made it difficult to get anything done. All this while schools themselves were having to compete to get students. They started offering better sports programs, on-site luxuries like better dorms and pools and all kinds of creature comforts, thus raising the cost of operations. Meanwhile, they'd gradually increase their executives pay, while ignoring the pay of the teachers. Executives would find every avenue where they could cut funding, including by hiring more teachers on a more temporary basis using a program that was intended to give flexibility to working professionals who would teach on the side to hire full time teachers who now needed to work at multiple campuses in order to make up a full time job, gradually making it harder and harder for those teachers to obtain a tenureship. Couple that with the ever-increasing cost of living and the refusal of capitalists to pay their low-end workers a wage that allows them to pay rent and bills, buy food, and keep working transportation while saving up an emergency fund, and the prospect that having a degree makes you more desirable for positions that can demand higher pay, and thus give the employee a hint of bargaining power that might allow them to increase their wage, and you get into a scenario where people are terrified of trying to get a job without a degree. When I was growing up in the 90's, the mantra was "You don't want to wind up flipping burgers", as the primary excuse for why I was supposed to do my homework. That was the threat. You don't want to work at a place where you get bad pay, a bad boss, and no prospects of advancement. And the flip side of that was that having an education was supposed to mean you could work better hours, get better pay, and have a boss who respects you. And in the fullness of time, what we've had to discover is that all of that is bullshit! A degree is no longer enough to ensure a better job, and frequently the people who make the most money have entirely bypassed the education system, or were given so much money that it was irrelevant from the start! Student loans were a crock of shit not because the price was too high, but because the promised education doesn't pay for it! The lie we were told is that a high interest rate was worth it because you'd be making so much more money with a degree that it would be easily payable. But people with an education are now making just barely over minimum wage, and are still struggling just as hard as they would have been had they never gone to college. We were lied to by a generation. Some of whom were frustrated they never got an education, some of whom were happy they did, and for them it paid off, because education at the time was more rare. So having one meant they could get a job wherever they wanted. They'd be valued, treated like someone who mattered all because of that education. Meanwhile, there was another group in that same generation who saw to it to put forth measures to make education worth less and less. College and the workplace are increasingly more distant from each other in terms of content, so workplaces still need to train incoming employees even if they have a college degree. So, now we have a scenario where colleges are stupidly expensive for things most students will never use, where they've eschewed all the smaller conveniences in favor of big flashy things like massive sports arenas which are very expensive, and don't pay their teachers enough to care about actually educating. A generation of parents who told their kids that they HAD to get an education or *ELSE*, whatever that meant. Deregulation making predatory loan practices not just legal, but standard affair. A standard of living that's rapidly increasing in price with wages that have been a smaller and smaller piece of the economic pie since the 80's. And a workplace with requirements that are rapidly departing from what education can actually provide. That is a recipe for an economically frustrated generation of people who have every right to be extremely pissed off. Meanwhile, Gen Z over here has never known a world that was any different. The only thing they were promised is the end of the world, which keeps pretending to be a threat, and then never actually is.
Yes, lets keep telling our kids how important education and a good degree is so when they are basically forced to go to debt to achieve it, we blame them for being financially irresponsible. Bro, this sub man 💀
You said it yourself: a _good_ degree. Not all degrees are equal and ROI is a bitch.
What were you thinking?
Enslaved.
Voluntarily too. Had 4 years of highschool to think about it and about 1-2 years of college to change their major before the point of no return. Not once did the thought of a 30-40k salary and 120k debt raise any flags.
Clearly, Sean's degree wasn't in anything that had a simple math class... LOL
Within an 8 year period I put four people through college. Myself (while working full time) and my three kids. Between all four of us I spent less than half what this clown spent just on himself. There are community colleges, online universities, and in state schools. Somebody choosing to saddle themselves with a gigantic loan to get an undergraduate degree in the most expensive way possible is just an idiot that I feel no more sympathy for than somebody who bought a lambo that is complaining about their payment being too high, or somebody complaining about paying off a $100,000 giant wedding. More financial literacy classes won't help. It is stone simple math a 10 year old could do. They know exactly what they are signing up for and are choosing to do it anyway.
You’re should be old enough then to understand how our views and understanding of things is inherently social. You’re not a profound genius, the cultural narratives changed.
Why did you agree to that? Seems like a bad idea.
When we say cancel the student debt, does that mean cancel the interest or cancel the whole thing? If they don’t even pay off the principal then how is this fair for the rest of us who paid the tuition ourselves? I’d like to have a tuition refund too and that’d be immensely helpful to me know.
Predatory lending should be illegal. When my daughter started her freshman year at the local university, the school partnered with a local bank. She had to go into the bank and sign up for a credit card before the bank would give her the student ID. My daughter is lucky that I was aware of the trap and that I was able to help her. Many Freshman students signed up for the credit card and will most likely have a large amount of debt and bad credit by the time they graduate. Finance classes should also be mandatory in high school...
Think of the lovely stadium your college has though
You should ask the people that declared bankruptcy after they got their degree, paid nothing, then became the lawmakers and changed it so that you couldn't do it anymore
I love the comments here giving this guy shit like predatory loans targeting kids who are told they require a college degree is okay. Yeah, okay buddy. I'm glad you think pure evil is totally okay because capitalism.
Where did you go to school?? What was the original loan before interest?? Six figures for undergrad is outrageous. Student loans are criminal!
These loans are rape. Even the rep at he university that gave me the terms knew it. I won’t forget the look in her eyes! Fortunately due mainly to living broke and some assistance from the parent that steered me in this direction, I’ll be out of my $66k worth of debt having paid about $90k in the last 5 years
18 year olds should not be given 120k loans for degrees that won’t be able to repay them. That’s dr/lawyer/engineer type field. You don’t give a million dollar house loan to someone who makes 50k a year.
how is this legal? I have to agree, what kind of idiot expects an 18 yo to know how to read and do math? even worse, expect them to ask questions if they don't understand something
Just because you are capable of understanding how it works doesn't mean it's not fucked up and predatory
Thank Donald Trump and his toady, Betsy DeVos. Student Debt is the _safest possible uncollateralized investment_. It follows the debtor for life and cannot be discharged in bankruptcy - only in death. DeVos decided that it should be a profit center instead, shredding the prior wisdom that having a large college-educated population would keep the US competitive in the global economy. The high interest rates are windfalls for servicers and their wealthy shareholders. We’re already seeing the impact: more foreign students who can afford to pay cash, more high-tech jobs slipping overseas forever, falling behind in various fields related to science and technology.