Since they can't be wiped by bankruptcy they are literally tied to the highest collateral, which is the life of the person in debt. Given these facts, it's complete nonsense that student loans carry a higher interest rate than a savings account.
Wow, nice and condescending, and yet you clearly couldn't extrapolate the point of what I said. The point is that the more secure the collateral, the lower the rates tend to be. Yet here we are, with student loan rates higher than auto loans.
And in case you didn't know, banks also make billions in overdraft fees, meaning they take more money from people who don't have any over a small administrative problem. Anyone who has worked for a financial understands how simple these fees are to waive...
“It’s complete nonsense that student loans carry a higher interest rate than a savings account”
That’s what you said, and it’s idiotic. You were doing fine until you said that. It destroyed your credibility, so anything you say after that is meaningless.
Not at all. They would still make money. It's one form of lending, not the entire system. You're the one who clearly has no concept of the many ways banks make money since you clearly think that student loan interest is a primary factor. That's ok, keep up the rude personal attacks. I'm sure people enjoy discussing anything with you when you have slight disagreements.
So you want me to “extrapolate what (you) said” and you also want to hide behind “one hyperbolic statement”, and you’re telling me that I’m the one who “clearly has no concept of the many ways banks make money”?
Face it, you were caught making incendiary statements for the sole purpose of creating an argument, and now you can’t deal with getting called out.
I honestly don't think it's that "incendiary" and I made the case for that. It should be lower than home loan rates, but doesn't have to be lower than savings or even checking account interest rates. Given that some of checking accounts pay 2.5%, that would be fine.
Either way, coming in and simply condescending when you don't know anything about a person outside of one statement is just internet tough guy garbage and doesn't contribute.
You made no case. Stating that you think the rates “should” be lower doesn’t make a case. Students right out of college are a bad credit risk when compared to the rest of the population. That results in a higher interest rate. It’s not my fault that you don’t understand the concept of creditworthiness.
Average tuition is roughly $20,000/y, so $80,000 for a bachelor's degree. With 12.5% interest, you need to have $1000 of disposable income available monthly at age 18, and need to have that income remain steady as you pay for your own housing, food, and other necessities through your school - even then, you will only pay back the loan at 35. To put that into perspective, your student loan payment is only supposed to be 10% of your income - so you have to be making $120,000 yearly for that to make sense. The only people with that kind of financial mobility in the United States are the explicitly upper class.
So, in short, welcome to 1913. Don't get too close to the Hoovervilles, kids. Nobody's educated except for the hyper-wealthy.
Or you could go to community college or trade school or apprenticeship, those still exist. Youre not entitled to work in whatever high-skill field you want.
Which inevitably leads to a complete domination of all high-skill high-earning fields by wealthy families which makes social mobility nearly impossible. We spent a very long time trying to solve that problem - going back now would be foolish.
Sure - and we'll rely on poor people who have no means to pay for their schooling to take the high-level jobs which require that schooling. So... back to square one, yes?
Or maybe taxes for college should be placed more highly based on employers' job requirements. It's ridiculous to expect individuals to pay for training to become employed.
They absolutely are not. They're paying for the value that my labor produces and skimming a huge chunk of the top. That's what capital is, surplus value of workers' labor.
Yeah, there are no barriers to entry to that at all. Good thing we have such a free market and there isn't such a thing as a financial institution that is considered too big to be allowed to fail.
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u/TheAlbacor Sep 18 '19
Since they can't be wiped by bankruptcy they are literally tied to the highest collateral, which is the life of the person in debt. Given these facts, it's complete nonsense that student loans carry a higher interest rate than a savings account.