Student loans’ interest doubling
I have several grandchildren who have Stafford college loans. They graduated with honors and are working now. However, the jobs available hardly pay enough for them to cover their living expenses. Now they are worried about the interest on their student loans doubling.
It is wrong for Congress to ignore the importance of this to our country’s brightest minds. We need college educated citizens. In just seven days — July 1, the interest rate on government subsidized Stafford loans is due to double.
I have one grandchild who is married with a disabled child. There are extra medical expenses that were not anticipated. There is doubt how they will make it if interest is double.
My husband and I get less than 1/2 percent interest on our savings account. Banks can borrow money at near-zero interest. I implore, beg, plead, with our representatives in Congress to make sure the Stafford student loans are not doubled.
Please do this for our future leaders!
Sara Dunlap
Brainerd
Comments (17)
Add commentAnother molehill aspiring to be a mountain...
...doubling the interest rate will not double the loan repayments. On a loan of about $15,000, it will only amount to a loan payment increase of about $20 per month. As for Sarah's granddaughter with the disabled child, if she is truly in economic distress, she should apply for a loan deferral for economic hardship. There is no need for the government to bail out every student because some are having economic difficulties. These subsidies, after all, are being paid by people who are often having economic issues of their own.
Did the bill that stopped the
Did the bill that stopped the banks from skimming off the student loans but not assuming any of the risk pass or did the cons kill it?
It seems the cons are intent on making higher education only available to the wealthy like the Romney's of America. That's the wrong direction for this country or any country.
Interest rates
Are set to go up from 3.4% to 6.8% July 1st. That's higher than current mortgage and car loan rates. Is that typical?
That appears to be more than a $20 a month increase on $15,000. It is probably double that. Off to my calculator.
There is also a 1% loan origination fee added up front.
I wonder what the default rate is.
Never Fear, We Have a Plan for that too !
Im absolutely certain Mitt and his boys like Paul Ryan already have thought about how to deal with all those over educated snobs and will unveil their plan when the time is right. The official GOP party line we be revealed just as soon as the anti affordable health care ad spending peaks at $ 300 million US Dollars , then winds down to work on the next pressing issue.At some point in time common sense will prevail...., and all you swing state Govs. DO NOT mention any progress on economic improvements in your states until after Nov.
Government MAKES MONEY off of student loans
Just thought it was worth throwing this little fact out there.
The government MAKES MONEY off of student loans. Quite a bit of money in fact.
The doubling of the interest rate means they will make more money.
The government will make more money off of student loans if the interest rate doubles.
muehlbau -Show your math
I don't think your assertion that the increase is only $20 per month is correct. Please show your math for how you arrived at that figure.
I was estimating my initial numbers but I've done a more formal
calculation using the following two scenarios:
$15,000 as the principal, 3.4% as the subsidized, former interest rate, and 10 years as the term (which is the typical term for a Stafford loan).
Monthly payment: $147.63
$15,000 as the principal, 6.8% as the new, not-as-subsidized interest rate, and 10 years as the term.
Monthly payment: $172.62
The difference? $24.99 per month during the term of the loan.
What number did you get bstinger? Oh, and I used the Excel finance functions, which would be impossible to duplicate in a combox, so you'll just have to find an amortization calculator if you want to check the numbers.
The interest rates
will soon explode, but that is exactly what Soros wanted. Barry has been a fine lapdog for the Soros Cartel. You lefties will reap what you've sown.
What a whiny story.
Oh boo-hoo. If I go an apply for a government loan, and don't like it, I don't sign, or I check out other financial institutional loans. If I cannot afford to pay it back, that's my problem. She says they graduated with honors. Well if the jobs they got don't pay enough, I'll lay odds they have a useless arts degree. And while I am sorry for your great-grandchild, it is not the government's problem or worry, nor mine. And RINO, all institutions make money! What do you liberals want, EVERYTHING for FREE!!!
Fuzzy math
In meuhl's example, an additional $3,000 will be paid over ten years, if the rates are doubled. ($25 times 120 months) That is an additional 20% over the principal. Not much to some, but quite a lot to others living on a young recent college grad's income. And tuition and room and board is much higher than $15,000 a year in Minnesota.
The 3.4% rate ends up costing $2,715 in interest over the ten years for the small $15,000 loan. That is 18% above the principal.
(of course, I am not too good at math, since I just have a "useless arts degree.")
Wouldn't it be nice just to have a dad who could give you some stock so you could finance your education? And BTW, I thought Mitt said he didn't inherit anything from his dad. He must have meant that he got it all while his dad was still alive. Those six years at Stanford, Brigham Young and Harvard must have cost a lot of his stock.
muehlbau math - I agree
I agree with the calculation you described using Excel. I wasn't sure what the term was earlier and did a simple interest calc that showed the difference being $42.50 per month, but when you amortize it over 10 years you are right.
Yes, it costs money when you take a loan...
...but why is it fairer for someone other than the person who benefited from the loan to cover a portion of the interest payments? I'm having a hard time feeling sorry for people who have to pay 6.8% interest on their student loans when I paid closer to 8% interest on mine.
It's OK.
Relax. I went to college for 5 years. I had loans. My rate was 8% across the board. I came out and worked in retail. I still managed to pay off my loans early...ALL of them. AND I paid rent. AND I bought groceries. AND I had a car. AND I got married during that time and paid for a wedding.
6.4% isn't going to kill your grandkids. They've probably got a credit card out there with higher interest on it than that.
It really doesn't matter if it is 6.4%, or 8%, because Obama's
thinking is if you wait long enough, no one has to pay anything; be it loans or illegal immigrants!
Pd
there are no more illegal immigrants. They have a presidential promise to stay out of jail free. (vote for him of course)
The dictator for life is here and he told the Russians that this is the last election.
If he loses he'll probably refuse to leave office.
The world is
Coming to an end!!! My I agree with Fish & a fiesty-finish- female in the same day. Okey good post. Now I need a beer.
Student loans are turning out
Student loans are turning out to be a nightmare for the under-40 crowd. And more importantly, they're turning out to be a nightmare for the economy too. My $440 a month student loan payment, due the 1st of every month for the next 23 years, prevents me from buying a new car. Instead I drive a beater with 100,000+ miles because my $440 a month goes to Aunt Sallie. Sorry GM, sorry Ford, the finance industry and Aunt Sallie take priority.
Thanks,
SpeedyLoanSearch.com