-
CycleTrack and SDN are teaming up to make medical school admissions more transparent and accessible! Read the announcement to learn how we’re supporting the future of CycleTrack’s free application-tracking tools .
Student Loan 6.8%, but car loan 4.99%, house 5.37%
Started by Twitch
Get help with your application
Use all the free resources available to you from SDN: articles, guides, expert advising, forums discussions, and school research.
Not everyone can get mortgage rates that low ... but yeah, everything else hasn't changed much honestly over the past year or so, other than fed rates dropping. I wonder if they will lower the fixed rate at all ...
Advertisement - Members don't see this ad
Federal student loans are 'guaranteed' by the federal government to private lenders. There's no way for students to get out of repaying those loans (except through death and maybe disability and, even then, the federal government reimburses the lenders). Student loans are a no-loss proposition to private lenders.
I agree with the original poster. It's absolutely ridiculous to be paying ~7% interest (and don't forget the fees!) for student loans. Having a well educated population is the key to a nation's success. There's absolutely no reason to be gouging students; it's criminally stupid.
I agree with the original poster. It's absolutely ridiculous to be paying ~7% interest (and don't forget the fees!) for student loans. Having a well educated population is the key to a nation's success. There's absolutely no reason to be gouging students; it's criminally stupid.
It's not just the interst rate that you guys seem to be having a problem with, it's also the fact that they are fixed.
Back when I paid back my UG Stafford Loans, they were variable rate, and I ended up paying them back at 8.5+% If you were lucky to graduate like 5 years ago, rates floated down with prevailing interest rates.
I wish I had 6.8% fixed loans then. If interest rates go up, 6.8% rates will look really good. But, I'm sure the reason for fixing them at 6.8% now had more to do with banks' interests (no pun intended) than students' interests. It would be interesting to see what, on average, the inteest rates were back when they were variable. My guess is that they were close to 6.8%.
Back when I paid back my UG Stafford Loans, they were variable rate, and I ended up paying them back at 8.5+% If you were lucky to graduate like 5 years ago, rates floated down with prevailing interest rates.
I wish I had 6.8% fixed loans then. If interest rates go up, 6.8% rates will look really good. But, I'm sure the reason for fixing them at 6.8% now had more to do with banks' interests (no pun intended) than students' interests. It would be interesting to see what, on average, the inteest rates were back when they were variable. My guess is that they were close to 6.8%.
My husband calls it "legal loan" sharking, and it's been going on since the late 70's.
From the Feb 25, 2008 issue of Business Week:
"DON'T REFI TILL JULY
Students or former students tempted to join the refinancing wave and consolidate variable-rate government guaranteed student loans should wait until after July 1. The Fed's recent cuts mean that rates on these loans could be around three percentage points lower when rates are reset in July, says Mark Kantrowitz, publisher of FinAid (finaid.org), a student aid Web site. "These projected decreases represent the largest decrease in federal education-loan interest rates since 1992, and maybe even in the history of the program," he says.
Federal student loans come in two types: Stafford and PLUS loans. Loans of both types made before July, 2006, have variable rates ranging from 6.62% for students in school (or those within a six-month grace period upon graduation) to 7.22% for students who have started paying off a loan.
A Stafford borrower who is repaying a loan and waits until the rates reset should shave at least 2.375 percentage points from current loans. A PLUS loan borrower should see a decrease of at least 3.125 percentage points. Although a wave of refinancing took place in July, 2005, when rates hit 2.88%, there are students who didn't lock in the lower rate. The typical graduate student, who has an estimated $50,000 in debt, could shave almost $75 from monthly payments and save some $9,000 by consolidating this summer.
By Lauren Young. Edited by Suzanne Woolley"
Here's the link:
http://www.businessweek.com/magazine/content/08_08/c4072plus980217.htm?chan=search
"DON'T REFI TILL JULY
Students or former students tempted to join the refinancing wave and consolidate variable-rate government guaranteed student loans should wait until after July 1. The Fed's recent cuts mean that rates on these loans could be around three percentage points lower when rates are reset in July, says Mark Kantrowitz, publisher of FinAid (finaid.org), a student aid Web site. "These projected decreases represent the largest decrease in federal education-loan interest rates since 1992, and maybe even in the history of the program," he says.
Federal student loans come in two types: Stafford and PLUS loans. Loans of both types made before July, 2006, have variable rates ranging from 6.62% for students in school (or those within a six-month grace period upon graduation) to 7.22% for students who have started paying off a loan.
A Stafford borrower who is repaying a loan and waits until the rates reset should shave at least 2.375 percentage points from current loans. A PLUS loan borrower should see a decrease of at least 3.125 percentage points. Although a wave of refinancing took place in July, 2005, when rates hit 2.88%, there are students who didn't lock in the lower rate. The typical graduate student, who has an estimated $50,000 in debt, could shave almost $75 from monthly payments and save some $9,000 by consolidating this summer.
By Lauren Young. Edited by Suzanne Woolley"
Here's the link:
http://www.businessweek.com/magazine/content/08_08/c4072plus980217.htm?chan=search
If you consolidate, don't you lose the grace period? That's one reason I never did it back in July 2005.
It's just unbelievable. And it's likely those interest rates may go even lower later in the year.
What's the point of AMSA and other student organizations that claim they do advocacy work in Washington for students? Federal student loans should carry the lowest interest rates in the market. They're the safest loans out there (now that the mortgage crisis has shown real estate is not as solid as people/lenders used to think).
What's the point of AMSA and other student organizations that claim they do advocacy work in Washington for students? Federal student loans should carry the lowest interest rates in the market. They're the safest loans out there (now that the mortgage crisis has shown real estate is not as solid as people/lenders used to think).
