Well originally, the government loans were the only loans not bankrupt-able, but in 2005 the government voted to interfere with lending practices and made private loans not bankrupt-able as well.
I could see the Republican/Conservative argument for the first scenario (ensuring return of monies to the taxpayer, but the second law was reprehensible and a government overreach if you are a small government type of person. They should have no business securing contracts for a lender.
Iâm kind of stunned that you even had to post this.
Democrat Politicians are great at printing more money, and defacing the American
dollar.
Plus they said they want their âcrumbsâ back for more vacation money. lol.
I would make any NEW loans bankruptable. Then lenders can take that into account when they make (or if they make) student loans.
I donât like when they change the rules of the game in the middle of the game. Lenders made loans in the past with the understanding that borrowers couldnât bankrupt against them. There is far more security for a lender under those conditions, and they can therefore write loans (and offer attractive rates) that they couldnât do if the the borrower could bankrupt.
Right now there is in excess of a trillion dollars in play. The hit to banks â and even the government â could be devastating if they change the rules on those loans.
Wasnât part of ObamaCare (or some parallel initiative) to move all government-backed lending to the government itself?
In 2009 or 2010, the government moved from guaranteeing federal student loans to just lending the money out themselves.
I like it better than the previous system because you and I were still on the hook for the money, but the bankers (who took no risk because it was a guaranteed loan) took 6% interest on each loan home.
Lower the interest rate, make them deferrable for any reason up to 10 years after leaving school, max 15 from issuance. A college degree is an investment. ROI should be considered when pursuing a degree.
Since the gummint is on the hook for them, yes, the government should just remove the middleman and collect the interest directly.
But more fundamentally, the government shouldnât be involved at all â not guaranteeing, not writing, not collecting. The free flow of unqualified lending is a big reason why colleges can charge so much for tuition (and subsequently why so many people graduate with worthless degrees.) And government involvement â particularly guaranteeing these loans â is a major contributor to the overall lending problem.
Defer payments for 10 years?
I donât think 10 years of compound interest is going to help.
.
.
.
.
.^^^^
If the interest rate is 0.5 % it wouldnât be bad at all.
And 10 years would give them time to find a job/gain seniority to better afford the payments.
Your response is paternalistic.
Does this include repealing laws that enforce debt collection?
Only 2 years out of the last 30 (or so) years have had inflation rates under 0.5%, lending money in the long term at 0.5% is a loosing proposition - based on the time value of money.
.
.
.
.
.^^^^
Not sure why youâre asking me.
Giving it away is also a loser.
The only way you (the royal you and not you personally) will be able to have student loans with a 0.5% interest rate and first payments deferred for 10 years for any reason is take private for profit banks out the equation and return the Federal Student Loan Program back to being a government financed and administered program.
Since government isnât for profit, they are the only organization that could finance post secondary education under those terms.
If for profit banks are going to the lenders they wonâtâ do it for free (or more realistically at a loss) given interest doesnât even keep pace with historical inflation.
.
.
.
.^^^^
Because you were talking about what should be done.
Yes and without capitalization during that decade.
Can a government that controls the funding control the curriculum. Asking for a friend
Cap the interest rates lower. 0.5%-1.0%. The current rates are ridiculously high with tuition rates.
