What do you guys think?

google "Loan Amortization Calculator". Today's government-academic monopoly on student loans is reducing the present and future population of America to nothing less than slavery...bondage at the barrel of the banks-academic complex...at best it might be argued its a return of 'indentured servitude":

350,000 student loan at 1%:
Number of Payments: 360
Total Interest Paid: $55,265.80
Total Paid: $405,265.80😎

350,000 student loan at 2%:
Number of Payments: 360
Total Interest Paid: $115,720.54
Total Paid: $465,720.54😳

350,000 student loan at 3%:
Number of Payments: 360
Total Interest Paid: $181,221.08
Total Paid: $531,221.08👎

350,000 student loan at 4%:
Number of Payments: 360
Total Interest Paid: $251,543.27
Total Paid: $601,543.27👎thumbdown

350,000 student loan at 5%:
Number of Payments: 360
Total Interest Paid: $326,395.24
Total Paid: $676,395.24😕

350,000 student loan at 6%:
Number of Payments: 360
Total Interest Paid: $405,433.66
Total Paid: $755,433.66😡

350,000 student loan at 7%:
Number of Payments: 360
Total Interest Paid: $488,281.14
Total Paid: $838,281.14😱

350,000 student loan at 8%:
Number of Payments: 360
Total Interest Paid: $574,543.36
Total Paid: $924,543.36😱

350,000 student loan at 9%:
Number of Payments: 360
Total Interest Paid: $663,824.50
Total Paid: $1,013,824.50

Prior to the laws being changed over the last decade (for the sole benefit of the central bankers), in America this was illegal and referred to as USURY. RIP America.

Of course, the generation that is getting away with it wasn't subjected to it by their fore-bearers (baby boomers argh!!)

The problem is not the interest rates. The problem is that the government is in the student loan business at all. Period.

Think about it. Why is tuition going up so fast? It's because the government lends money out to anyone that needs it to go to school, without any limits. No matter what the tuition is at a school, a student "has a way to pay for it" because the government just hands it out.

Lowering interest rates will only WORSEN the problem. If the money becomes "more free" by lowering the interest rate, tuition will only INCREASE more rapidly. The solution is to get the government out of the student loan market completely. Have you noticed that a lot of private loans have limits on the total amount you can withdraw for your education? This is because, what bank in their right mind would hand out 400 grand to a student with no assets or credit? They already did this during the housing bubble, and look where that got everyone.

Get the government out of student loans. Pop the bubble. Put a limit on the amount of money a student can borrow. As soon as students don't have access to an unlimited source of money, tuition will drop, and then stay on par with the actual rate of inflation.

But unfortunately that will never happen. The bubble might still pop, but it will be while the government has a grip on the loans. Then, when students are defaulting left and right, they'll draft up some kind of bail out and just print even more money, further deflate our currency, flip the bill to the taxpayers, and start the cycle over again.

End rant.

NDPitch said:

The problem is not the interest rates. The problem is that the government is in the student loan business at all. Period.

Think about it. Why is tuition going up so fast? It's because the government lends money out to anyone that needs it to go to school, without any limits. No matter what the tuition is at a school, a student "has a way to pay for it" because the government just hands it out.

Lowering interest rates will only WORSEN the problem. If the money becomes "more free" by lowering the interest rate, tuition will only INCREASE more rapidly. The solution is to get the government out of the student loan market completely. Have you noticed that a lot of private loans have limits on the total amount you can withdraw for your education? This is because, what bank in their right mind would hand out 400 grand to a student with no assets or credit? They already did this during the housing bubble, and look where that got everyone.

Get the government out of student loans. Pop the bubble. Put a limit on the amount of money a student can borrow. As soon as students don't have access to an unlimited source of money, tuition will drop, and then stay on par with the actual rate of inflation.

But unfortunately that will never happen. The bubble might still pop, but it will be while the government has a grip on the loans. Then, when students are defaulting left and right, they'll draft up some kind of bail out and just print even more money, further deflate our currency, flip the bill to the taxpayers, and start the cycle over again.

End rant.

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^^ Yes. Good analysis. In my mid 30s I have learned the last thing to do is be caught with your proverbial pants down hoping for wholesome corrective change from this present government we the people under about age 50 are yoked with.

The present government is built upon the scheme of legalized counterfeiting via the so-called 'Federal' Reserve (private cabal of entirely private banks responsible for paying their debts with printed up funny money worth no more than the paper its been printed on)

Think about it. We go to school in america for decades and yet there is one thing NEVER taught. Here is a good start of an education in it:

https://www.youtube.com/watch?v=jqvKjsIxT_8

https://www.youtube.com/watch?v=Ssa5WNnbGsw

NDPitch said:

The problem is not the interest rates. The problem is that the government is in the student loan business at all. Period.

Think about it. Why is tuition going up so fast? It's because the government lends money out to anyone that needs it to go to school, without any limits. No matter what the tuition is at a school, a student "has a way to pay for it" because the government just hands it out.

Lowering interest rates will only WORSEN the problem. If the money becomes "more free" by lowering the interest rate, tuition will only INCREASE more rapidly. The solution is to get the government out of the student loan market completely. Have you noticed that a lot of private loans have limits on the total amount you can withdraw for your education? This is because, what bank in their right mind would hand out 400 grand to a student with no assets or credit? They already did this during the housing bubble, and look where that got everyone.

Get the government out of student loans. Pop the bubble. Put a limit on the amount of money a student can borrow. As soon as students don't have access to an unlimited source of money, tuition will drop, and then stay on par with the actual rate of inflation.

But unfortunately that will never happen. The bubble might still pop, but it will be while the government has a grip on the loans. Then, when students are defaulting left and right, they'll draft up some kind of bail out and just print even more money, further deflate our currency, flip the bill to the taxpayers, and start the cycle over again.

End rant.

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The problem with education is that unsustainable cost escalation is intrinsic to our national character. Parents get into the higher education bubble by vowing to start earlier and earlier to save for their children's college tuition. Sometime in the past few decades it became the norm for parents to save money over most of their childrens' lives to pay for college. In keeping up with the joneses, middle and upper-middle class families got sucked into never-ending tuition increases, until at some point, loans became the only practical way to afford higher education. Once actual, earned money was insufficient, practically speaking, to pay for college, the bubble became huge and unstoppable. Government lending was presumably intended to give lower middle class kids a chance at going to college in a system where socioeconomic status trumps intelligence and work ethic. Poorer kids don't stand a chance when the better-off are willing to throw everything they have into the ring for their children's future.

In the never-ending pissing contest that is parenting, it became parental help, parental help with loans, or nothing. Parents try to give their kids the american dream (or at least a shot at it), and competition among them for the best schools (actual education aside) grew into an unsolvable problem. Education = success. You can't put a price on the promise of future prosperity, even when what we're chasing has become a mirage in many cases.

I maintain that the only solution in sight would be high quality public universities that can accept a majority of the population.

NDPitch said:

The problem is not the interest rates. The problem is that the government is in the student loan business .

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Without government backing what private institution is going to loan you six figures unsecured and interest deferred. Unless you have a trust fund or parents with deep pockets the banks would be circling you like sharks in the water. You would probably be lucky to get prime plus three compounded from the date of withdrawal.

When I went to school with GV Black, the federal and state government subsidized colleges and their professional schools. Their control over tuition rates is what kept professional tuition low up to about 1977. The lack of subsidy is the primary reason class size has diminished by 30%, incoming class makeup is no longer 90% in- state residents and tuition rates have climbed to whatever the market will bare.

Unfortunately, the rise in tuition will probably not diminish or slow until classes can no longer be filled with quality applicants or more federal or state control is placed.

OhioDMD said:

Without government backing what private institution is going to loan you six figures unsecured and interest deferred.

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That's exactly my point, though. A private institution wouldn't, and there'd be a brief period of turmoil as a result most likely. However, the end result would be that schools would have no choice but to figure out how to lower their cost of education. If students suddenly didn't have an unlimited pool of money from which to borrow, the costs would come down. I don't believe that the cost of education is really rising faster than inflation. It's a bubble ripe for bursting, created by the government's willingness to give out unlimited money (which was printed by the federal reserve like a daily newspaper).

What I'm saying is that, in my opinion, for everything to stabilize and for the education bubble to burst, the government needs to not be in the student loan business. It would be crappy at first, but in the long run things would come around to more normal levels.

NDPitch said:

That's exactly my point, though. A private institution wouldn't, and there'd be a brief period of turmoil as a result most likely. However, the end result would be that schools would have no choice but to figure out how to lower their cost of education. If students suddenly didn't have an unlimited pool of money from which to borrow, the costs would come down. I don't believe that the cost of education is really rising faster than inflation. It's a bubble ripe for bursting, created by the government's willingness to give out unlimited money (which was printed by the federal reserve like a daily newspaper).

What I'm saying is that, in my opinion, for everything to stabilize and for the education bubble to burst, the government needs to not be in the student loan business. It would be crappy at first, but in the long run things would come around to more normal levels.

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👍 100% agree. (sadly I have little doubt our understanding of the situation and the only viable solution is not shared by the vast majority: which is why I'm not holding my breath. For some reason people in general have to be forced the hard way by getting bitten very, very hard first before they make positive wholesome changes. This bubble will burst and the longer it is delayed the more painful it is going to be for everyone: except those who saw it coming and prepared. It seems very logical to me that the fallout from this bubble bursting will be roughly equivalent in scale and scope to the housing bubble burst of 2008, just this time the effects will mainly be experienced by the academic + banking matrix/ complex. They are going to be sitting around in the ash heap of their expectations wondering what hit them)

Nice Topic. Here is my contribution:

Paper Title:
Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges

Authors:
Stephanie Riegg Cellini, Claudia Goldin

We use administrative data from five states to provide the first comprehensive estimates of the size of the for-profit higher education sector in the U.S. Our estimates include schools that are not currently eligible to participate in federal student aid programs under Title IV of the Higher Education Act and are therefore missed in official counts. We find that the number of for-profit institutions is double the official count and the number of students is between one-quarter and one-third greater. Many for-profit institutions that are not Title IV eligible offer programs and certificates that are similar, if not identical, to those given by institutions that are part of Title IV. We find that the Title IV institutions charge tuition that is about 75 percent higher than that charged by comparable institutions whose students cannot apply for federal financial aid. The dollar value of the premium is about equal to the amount of financial aid received by students in eligible institutions, lending credence to the "Bennett hypothesis" that aid-eligible institutions raise tuition to maximize aid.

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http://www.nber.org/papers/w17827

Description of Bennett Hypothesis from Wiki:

In 1987, U.S. Secretary of Education William Bennett first suggested that the availability of loans may in fact be fueling an increase in tuition prices and an education bubble.[12] This "Bennett hypothesis" claims that readily available loans allow schools to increase tuition prices without regard to demand elasticity

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http://en.wikipedia.org/wiki/Higher_education_bubble

NDPitch said:

That's exactly my point, though. A private institution wouldn't, and there'd be a brief period of turmoil as a result most likely. However, the end result would be that schools would have no choice but to figure out how to lower their cost of education. If students suddenly didn't have an unlimited pool of money from which to borrow, the costs would come down. I don't believe that the cost of education is really rising faster than inflation. It's a bubble ripe for bursting, created by the government's willingness to give out unlimited money (which was printed by the federal reserve like a daily newspaper).

What I'm saying is that, in my opinion, for everything to stabilize and for the education bubble to burst, the government needs to not be in the student loan business. It would be crappy at first, but in the long run things would come around to more normal levels.

Click to expand...

You, sir, know your stuff. Agree 100%

We are experiencing the education bubble, as long as the demand stays high - the prices will keep going up. It is only when students realize that the ridiculous price tag on the education is no longer worth it and/or the student loans are no longer available to them to pay for said education is when we are going to see this bubble burst.

Younger generations have to realize this and realize that there are much cheaper alternatives to a promising career, such as much more affordable online courses that teach tangible new technologies for direct application in today's companies.

Unfortunately, student loans are a huge business - they are given out cheaply to anybody just like mortgages where pre-2008 and we all know what happened with that. Of course with any conflict of interest as big as this comes with plenty of propaganda that brainwashes school aged children and teens/young adults that the only way to be successful is to go to college.

I agree with a lot of what you're saying; but, I feel like the bold is a red herring. Education / college is NOT the problem - the problem is the cost and debt. College is a great thing for many people (I agree not all). I disagree with the idea that US HS grads are ready for industry in most fields. Sure... some MAY be able to teach themselves advanced maths, sciences, and language to add value to a company or develop a business; however, most HS grads cannot.

Now that we have attended college many of us may feel that we can self teach ourselves most subjects but that's because we're college graduates. Sorry for the rant - I just get sick of people beating up on college when the real problem is the cost of higher ed.

CDent2017 said:

Unfortunately, student loans are a huge business - they are given out cheaply to anybody just like mortgages where pre-2008 and we all know what happened with that. Of course with any conflict of interest as big as this comes with plenty of propaganda that brainwashes school aged children and teens/young adults that the only way to be successful is to go to college.

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yappy said:

I agree with a lot of what you're saying; but, I feel like the bold is a red herring. Education / college is NOT the problem - the problem is the cost and debt. College is a great thing for many people (I agree not all). I disagree with the idea that US HS grads are ready for industry in most fields. Sure... some MAY be able to teach themselves advanced maths, sciences, and language to add value to a company or develop a business; however, most HS grads cannot.

Now that we have attended college many of us may feel that we can self teach ourselves most subjects but that's because we're college graduates. Sorry for the rant - I just get sick of people beating up on college when the real problem is the cost of higher ed.

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No you're right and the problem lies with the fact that I generalized College as a whole, let me re-phrase. College is not all bad, in fact I would encourage people who want to go into job specific programs (so programs that lead to specific careers) in college such as engineering, nursing, medicine, dentistry, etc.

Now we can both agree that programs such as this are the minority, with most programs being a generalized credit mash where you learn little about a lot of things but don't learn any job specific skills which in the end gives you a big debt and no job. College cost/programs are outlined by college administration (along with all the propaganda) so yes, the college institution is the problem here. Growing up, I was taught by society (influenced by media) that if I go to college that I will get a better job and be successful no matter what - no one bothered to mention the fact that only the minority of job specific programs where the only ones that would give me a chance (not a guarantee) of a successful future (even those have exaggerated job prospect claims) - but as I grew up and became less naive, I realized that that was because it would be counterproductive to their bottom line (the only thing that matters to most people - let's be honest) if they were upfront and honest about most of their programs being an expensive vacation.

Another thing I should add about college propaganda is that it plays in the whole teen/young adult culture of partying, playing video games all day and hooking up. I'm 18 years old, I have a choice, I can either enter the workforce and take online classes - (both which will teach the kid about job specific skills and work values, essentially getting paid to learn while learning about the real world and making contacts that could blossom into a real career - not to mention little to no debt, it's also a fact that most employers say that they don't care about a piece of paper as much as they care if the individual has a specific set of skills/experience he can bring to the company). My second choice is that I can go to college with my friends, party, hook up, drink my face off - which major? who cares? I'm in university = I will be successful. Of course the 18 year old will choose the 2nd choice, it's way better in all perceived aspects and it sounds way more fun; but unfortunately in most cases, the first option would have been the best by far for the kid's future.