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on Friday, October 31st, 2008 at 8:41 am by Radley Balko
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Student Loans – man they bite. I owe about 85k. I have friends that owe nearly 2x that (law school). I know it is a surprise but the gov’t really protects these banks that issue these loans and thanks to bankruptcy reform – student loans are nearly non-dischargeable. So the banks charge ordinary interest and the loan is virtually risk free – not so w/ other loans.
1. Cannot be refinanced in the traditional sense of the term. Meaning if you consolidate at 7% that is your interest for life – no matter when that rate dips to 2% – you still can’t refi with a new lender
2. Have enhanced collection practices – allowing lenders to use very aggressive tactics that are not available to ordinary lenders.
Disagree? Think student loans are risky for the banks? Check Salliemae’s bottom line sometime.
In reading the responses, I guess I am lucky to have $35k in student loans hanging out at 4.75%
Balloon Maker |
October 31st, 2008 at 10:39 am
still in school. when it’s all over it’s going to be around 130K, but I will be a doctor (but not the kind of doctor that makes enough to justify the cost.) I knew what I was getting into, so I can’t complain
Fortunately for you as a doctor, the federal government will soon likely dictate who you can treat, how much you can charge, where you work and what specialties you’re allowed to pursue, so you’ll know in advance that you’ll never recoup your loan costs. One less thing to worry about!
That video was hilarious. That guy who got looped into the Nigerian 4-1-9 fraud was priceless, “Turns out it was a scam…” I wonder if the ‘businessman’ who contacted him was named Ben Ahore?
BTW, just s side-note on the side-student loan conversation: government-sponsored loan and grant programs actually allow colleges to raise tuition prices. Most colleges would be more affordable if they weren’t counting on the government giving students a pile of money that they can’t spend on anything else. It’s kind of like what would happen to car repair prices if your mechanic knew that all the people who came in were either pretty well off or had access to extra money that they could only spend on car repair. There’s a spiral of dependence, where the aid raises tuition prices, then even more people can’t afford tuition and clamor for more aid. (And, if someone wants more sophisticated analysis, it’s worth looking at Cato’s write-up on this.)
I’m a law student, will have ~$150k in student loans, at 6.8% (Stafford) & 8.5% (GradPLUS). Thanks to financial disaster, big law firm hiring is very rough this year, and I could not secure a summer associate position. I’m a 2L at a Top 20 school, on the Law Review.