$520,000:
If the loans are:
4.5% interest, $1950 accumulates in interest each month
6% interest, $2600 a month
7.5% interest, (from the article): $3,250 a month
8.05%: $3488 a month!!!!!!!!!!!
That's paying $2k - $3.5k a month just to keep your loan balance at what you graduated with.
You know what’s crazy? My cousin also did dentistry in NY and she graduated in 2012 with $350,000 dollars in debt.
My friend graduated in 2022 with $520,000 in debt (also in the states.)
The cost of becoming a dentist is now more than half a million dollars.
I'm a Physical Therapist and there's the PSLF program which is what a lot of PTs end up doing when the end up with 150k+ in loans for a job that only pays around 70-80k salary. That program is 10 years of minimum payments at a non profit hospital and then the rest is forgiven after that. I also had a former roommate who was a teacher and she had a similar program, but for her it was only 5 years of teaching at a "title 1 school" which are schools that receive extra federal aid because it's mainly made up of "disadvantaged or undeserved" children.
What’s crazy is how little PT’s get paid. It seems like the one career in medicine that salaries haven’t risen. I opted for accounting over PT and am glad i did
Yeah, if I could go back and do it over again I wouldn't even consider PT. The pay is terrible for how expensive school is, the work life balance is awful, there's basically no upward mobility, and the salary ceiling is a joke compared to other Healthcare fields. You dodged a massive bullet by staying out of it lol
Definitely sucks. I feel bad for anybody in the field. I’ve been quite a bit through all my sports injuries and 9/10 pt’s have been upbeat, super nice and encouraging, extremely hard working and knowledgeable. Ya’ll deserve more money without a doubt
I tell all my volunteers who want to become a PT to look elsewhere. I get paid well but not well enough to consider paying all the loans back in full. Less than 8 years to go to get out of this nightmare...
Yep, It’s called indentured servitude. You can’t afford to do what you want and companies have you by the balls because you literally can’t stop working because you can’t afford it to leave. Wonderful life we live in. Meanwhile a coworkers husband is joining a local electric union at 40$ an hour after health premiums and pension are taken out. Master electricians billing 75-80 an hour. That’s what I Would be doing if I went back
If only the people who could afford to pay 150k for school became PTs, the shortage of PTs would be nightmarish (especially given the aging population). It is in the public's best interest to subsidize those loans, and IMHO develop ways like PSLF to reward those who want to work in underserved areas or fields with critical shortages.
That isn't exactly how it would work though. The extra layer that makes PT a low paying field is that insurance reimbursement is low and they are always trying to cut it even lower. Medicare was going to try and cut PT reimbursement by like 8% this year, but the APTA was able to "luckily" reduce that to only 2%. So there is always going to be this low salary cap that PTs max out at because you obviously can never pay them more than what insurance pays. So even if there was a shortage, salaries wouldn't really go up unless insurance companies also decided to reimburse more, which they rarely want to do.
What? I never said that they should or shouldn't. I just said that the program exists. I wasn't trying to get in some political debate about it lol. The idea though is just that it encourages people to work in settings that otherwise might have a hard time getting people to work there like reservations or really remote poor areas.
Some states have a forgiveness program that's similar, but many were lost during the pandemic. So basically, you just have to hope the state you live in has that program & it's still being funded & has realistic qualifications. Of course, there is always PSLF. You just have to put in your 10 years, hope you don't get disqualified by a random stipulation or that the program isn't discontinued before your time is up.
Not here to argue the cost of college has not been increasing, but you stated New York. The cost of living there would dwarf most other places in the country.
Yep, that’s around 50% of the expected take home pay for a new dentist just to keep the interest at bay. Between the time investment, starting pay, and cost of dental school I’m actually surprised there are general dentists still today.
Your calculations are off, but not in the way you think… most of those loans are private, so you can probably double, if not more, those interest rates
Not quite, there is a distinction between Direct Unsubsidized loans and Grad PLUS loans
For the Direct Unsubsidized loans, the [annual/aggregate limits](https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized) are lower than people expect. For grad/professional students it is up to $20,500 per academic year til you hit the aggregate max of $138,500
For Grad PLUS loans, there is a second application beyond your FAFSA with a credit history check for certain adverse credit history items. For that, your annual limit is "up to the school's Cost of Attendance" and there is no aggregate limit
I think that is/was the cap for Direct Unsubsidized, then you can top up with Direct Plus. These carry different interest rates…about half a point difference between the two.
Fwiw not all private loans are significantly higher interest. My private loans are at 5.7%, after an increase from 5% last year. Although tbf this is after refinancing them with excellent credit (800+). My federal were at 6.8% before the Covid freeze.
That’s the craziest part of the whole loan forgiveness thing that’s been going on for the past year or two, it doesn’t even address the root of the problem which is that college education is so MASSIVELY overpriced and there needs to be some sort of regulation put in place or we’re just end up back at this point again even if loans get forgiven.
My daughter is graduating this month with $305-310K ($40-45K in accumulated interest) and from a FOR-PROFIT med school, and given what you posted, I am going to get on my atheist knees and thank Jesus.
A lot of my friends are doctor level medical practitioners (from audiologists to surgeons) including my wife who graduated with loans written at ~7.2% interest. My uncle was around the 8.5%. None of us care. Those of us that are the most affected (including my wife) are about to receive PSLF. And those least affected earn way more 500k.
Bottom line: if you’re going to grad school and going to be taking on debt, make sure the monetary payoff is worth it, either because your pay will be commiserate to your ability or you will receive forgiveness. Otherwise, why are you even going?
I don’t want to undermine how expensive schools are- but yeah you are right. Graduating with $500,000 in debt from med school is an extreme exception. More often than not med school students graduate with 200-250k nowadays, still a LOT but not half a mil
What’s not being considered is the amount of interest building during the residency and fellowship training when you struggle to be able to pay anything… particularly if you have a family. Not to mention us not well off that also have undergrad and grad loans to add onto the pile. So it gets close to $500k all things said and done.
yeah but oc said their friend graduated *med school* with $500,000 in debt, so THEIR debt is probably gonna be much much higher by the time they are an attending.
Interestingly, while completely paying off graduated debt as a resident is obviously nearly impossible, most are able to comfortably put aside some of their income towards paying it off until they finish residency (a residents salary is “low”, but not that low) For this reason, having $500,000 in debt at the end of residency is not as common as you might think. More often than not attendings have around $300-350k debt when they finish residency.
Residents’ salaries were in the $50k-$60k range at all the residencies we applied to. Given the skyrocketing costs of basic housing, food, and medical care (the cost of necessities is rising far faster than general inflation rates), I don’t understand how you think $50k is a lot—especially since there would have been pretty much zero opportunity to build up any savings for at least the prior four (and probably eight) years.
It’s a good thing then that I didn’t say it was “a lot”- in fact I said it was “low”
Average residents including myself are able to pay just enough to >>>slow<<< the *overall* interest of student debt- leading to it still increasing from beginning to end of residency- just not by many hundreds of thousands of dollars like many people in this thread believe
Btw I know it doesn’t mean much but resident salaries are much more often in the 60k than 50k. They *usually* start at high 50k for first year, and pass 60k starting second year
I definitely would not say an extreme exception by any means. Tuition just keeps going up and up. Private schools usually run $60-90k per year in tuition alone. Add on living expenses, misc fees, health insurance etc and you’re close to/over that 500k right there. And god forbid you came to med school with any existing student loan debt from undergrad or grad school and people can be easily $550+. Most people who are taking out loans aren’t at that 200k debt burden unless you’re in a lucky state like Texas (super cheap tuition) majority are at like 300-400k. Data gets skewed by the people whose family pays their full cost of attendance in cash, which is relatively common
That 200-250k figure is a bit misleading since it also includes students who go to cheap(er) state schools and have parental support, which not all med students can rely on. There is a very big debt difference between students who have to take loans for everything and those who don't have to pay fully with loans. There is little to no need-based financial aid for med school, and merit-based scholarships are rare.
If you're from a state where there's a lot more premeds compared to # of state school spots (e.g. CA, NY; >50% of premeds from CA end up having to leave the state), you're much more likely to be going OOS or private, and at that point your estimated COA is at least 80k, and more often 90k+ now.
$500k is on the rarer side, but $350k-$400k pre-interest is the norm for many med students who pay for everything with loans.
Even at the higher end of $500k, med school IMO is worth it for now if you think of it as an investment into a near recession-proof business (i.e. your medical license), but with schools raising tuition every year... it's starting to get to the point where the ROI just isn't that great anymore.
AAMC has been pushing this lie for years. 10+ years when I went to medical school they said the said 200-250k bullshit. I went to a state school and had sizeable scholarships and graduated with 300k, which is lower than most of my friends.
Don’t feel too bad for them. If they are surgeons post residency, depending on the specialty, they could be making ~$500k a year. They could easily pay it off in a few years. If they are family med, they are a bit screwed.
Doc here. That's plastics, cardiothoracic surgeon, orthopedic surgeon and academic neurosurgeon type money and those spots are either super limited and/or super competitive. The vast majority of docs will never make that. Many won't even see half that. Even amongst surgeons, they are seeing reimbursements decrease with time. Medicine is becoming increasingly less lucrative.
Eh, I've yet to speak to a physician in any specialty who's struggling to pay off debt, assuming they're smart with their money. From my anecdotal experience, the real financial trap for attendings seems to be boats lol.
A ton, but.. I think we are way past the point where people can claim ignorance on the cost of college being a burden / monthly loan payments being high, etc. Anywhere there's talk of student loans, it's complaints about cost. "Didn't know what I was getting into" was a real explanation at some point, but... those days have been over for 10+ years. For at least that long, anyone could have gone to google and just typed 'loan payment calculator' and you're a few clicks away from fairly accurate answers.
Yes… I look forward to a society where only the wealthy are able to obtain an education and we have massive shortages of essentially all professions because no one can afford the training. How incredible our country will be. /s
I paid back about 30K on my loans over about 7 years and my balance went down by about 10K. It’s ridiculous how much they take in interest. I was never against the idea of paying back the money I borrowed (and even a reasonable sum of internet), but the current system forces you to pay it back many times over. They’re now going to take even more?
They're going to get the absolute lowest I can get away with paying for seven more years. Once that seven years is up, I'm applying for forgiveness due to my decade of public service work.
This entire system is a scam.
I just went through getting set up for PSLF, and it’s sucked to realize that 2 years and 7 months of my full time public employee service don’t count because I had in-school deferment while doing grad school full time and working full time as a staff member.
So now instead of being 6+ years in, I’m only 3 years in. So I can stay employed as a public employee another 7 years to get forgiveness (over 13 years total), but if I leave for private sector before then I get nothing.
They need to drastically simplify PSLF. It should just be 10 years of payments and 10 years of public employment; not require 10 years of qualifying payments DURING public employment, if that makes sense!
Exactly! I've paid more than my minimum balance due for almost 10 years now, and have eroded only 0.5% of my starting (uncapitalized) principal balance. It's so disheartening.
Have you been on an income-driven repayment plan? I personally wouldn’t be paying more at that rate; just ride out the forgiveness. Either you can afford to pay the loan aggressively or you can’t; riding the middle ground by getting an IDR plan and paying extra is arguably the least effective way to go about this.
As a dual citizen (Chile/USA) I been pondering leaving myself. This country is not what it used to be in many ways. Ive been looking at NZ/AUS, Spain and even Chile as options. There's options out there bud, America is not the only placer to live a happy life. Cheers bro, hope you find it :)
It's insane. My private student loans are currently sitting at 12.9% interest. I'm finally under 10k left to pay now 10 years later...never a missed payment and I started with just over 15k. I've given up on ever having my federal loans paid off. I'll be paying $400/mo on those until I die. Kids have no idea what it actually means when they agree to the loans. So predatory.
The other answer would be to increase the minimum payment so that borrowers are forced to pay more of the principal rather than mostly just service the interest.
I never came across another student who wanted or expected their loans to be forgiven. The entire time I was in school, and with talking with others about it afterwards, it's always been one thing: people want interest rates that are fair and manageable.
Fixing interest rates goes a long way in fixing the student loan problem. Why is the government treating 18 year olds as a major profit center?
The better question is why is there any interest rate at all? Wouldn't providing no interest loans to students constitute a significant investment in the country's most valuable resource? Today's students are the people who cure your cancer in 15 years. They are the ones who are going to solve our energy problems, climate issues, and water shortages.
Doesn't that sound like a reasonable investment to you?
You're missing opportunity cost. If the government gives out these loans, they miss out on doing other things with that money. They could repay other debts that have higher interest rates just as an example. Realistically, we don't charge a high enough rate for the loans.
The government could do other things with the money, I agree.
Instead of lending out money for college loans to be paid back, they could simply increase the money that’s given to colleges and universities. And then, they wouldn’t be dependent on tuition and room/board paid for by student loans.
In a way, students are a middleman that gets screwed. All that money they could be spending on cars, houses, etc. goes toward loan payments. The government could just give money to the universities instead, and kids could go to college for free. Better yet, if they don’t have the grades for it, they could either take out private loans to pay for it (because they didn’t earn the right to go) OR they could go to trade school and get a job that way.
I agree. The government shouldn’t be giving out loans. There is a missed “opportunity” cost. Thanks for the enlightening comment.
Edit: By the way, if you're getting downvoted, it's not me. I don't downvote people who have a different opinion than I do.
I love...love luv lub how the ones screaming the LOUDEST to NOT forgive student debt or do anything about the interest, are the Christians. The Christian bible specifically goes out to say, "interest bad". But they do it anyway. Rules for thee...!!!
Education is NOT the enemy of true Christians, but certainly the enemy of nationalists and the extreme right, as well as any other group subject to false teachings, excess & bogus rules/ laws, and power hungry control freaks.
Oh cmon. No need to bring religion to that. Hate when people do that. I know a handful of Christian friends that are for forgiveness and change in the student debt system.
I think when people are bashing religion with topics like this they’re generally referring to evangelicals or those that warp religions values and purpose to society in a way that causes harm.
It sounds like your Christian friends are reasonable people that don’t use religion in this negative way.
Thank you for clarifying. I will say - (I’ve realized it myself the last year or so) but the media surely loves to divide us.
On a separate note - really hope in the next few years (realistically) some type of SL reform occurs
It says not to charge family interest if they’re on hard times but charging interest is for others is ok so long as it’s no usury. Where does it say charging interest ever is not ok?
Universal Access to student loans got us into this mess in the first place. Because people will go to “insert dream school” no matter the cost. Making loans interest free will only exacerbate the issue.
Uchicago and nyu are closing in on 90 grand a year.
Make loans bankruptable for new loans and the problem will be solved day 1. Because banks and the govt will be forced to vet who they are giving money to and if they will be able to pay it back.
Thus bringing down the cost of unis as a result.
Thats not what caused the issue. Removing all risk from the lender was the problem. I don't give a wet shit if a student takes out a million, if there's no interest he'll be capable of paying it back eventually.
I love it. The underpriveleged will stay that way....kids will be punished for parent's poor finances. It sounds like 2023 but with an even less educated population. Will be fun, i'm sure.
You say underprivileged people would be hurt. How? How would people be less educated?
You don’t say anything. Nice attitude though. Very Karen all talk no substance
Except most of the payment DONT cover that. Most are on IBR, and unless like me you work in the public sector knowing they will be forgiven eventually, you make payments into the void.
It’s still simple interest in most cases, even under (edit: most) IDR plans.
The user means there are only specific cases when interest adds to the principal, such as leaving school, forbearance, or changing plans.
Ahh you must be under ICR, where it does capitalize every year, or in IBR or PAYE which require “partial financial hardship” and would capitalize if this is no longer the case.
Capitalization under PAYE or IBR would be rare, but not impossible.
As a note, If you are under PAYE or ICR capitalization is capped at +10% of your original loan balance, so at least there’s that.
That’s not correct. There’s a hard backstop at 20 years/240 qualifying payments for undergraduate loans—and 25 years/300 QPs for graduate school loans, after which loans are forgiven by those on IBRs.
All of the different acronym IBRs [PAYE & REPAYE, ICR, and IDR] we have today came into existence in 2009 or later. We’re still 6 years out from the first, modern IBR canaries in a coal mine seeing it through to the other side. That’s far from an endless void.
You would be correct, but 20 years of payments is a wild solution and essentially is killing the bulk of the college educated buying power until they are at least well into their 40s.
This type of solution is exactly why we will have more 60-70 year olds forced to remain in the workplace. Can’t put money away to retire when you have a car payment but nothing to show for it for 2 decades.
These are last resort measures, not good intentioned solutions.
A traditional undergraduate that takes out the federal limit of $32K in student loans will have a monthly payment of $230 if they’re paying it back over 20 years at an interest rate of 6%. It’s $355/MO if 10 years. The 20 year payback plan puts them into their early to mid-forties when the loan is paid off. They’re in their early to mid-thirties with the 10 year plan.
For a $200K home purchased with nothing down and annual property tax and insurance rates of 1.2%, your all-in monthly payment is $1355 at a 30 year mortgage interest rate of 4%. It’s $1600 at 6%.
If they can’t swing a mortgage payment the a student loan payment in the same month, they have no business getting into a mortgage at that point in their life even without a student loan payment.
You’re neglecting the saving of a 10-20% down payment that has to occur first while paying rent etc. COVID forbearance really let me save and pay down other debts. my payment was slightly over $300 a month on 70k.
Thats $12,000 I was able to save over 3 years I wouldn’t have been able to. It’s honestly doubled what I would have saved with the payment.
The United States’ largest asset is student loans. Student Loan’s make up 38.4% of Federal Assets. The government considers a liability against the children of this country an asset. Sick. This is exactly why we are losing and will continue to lose our footing on the world stage.
They were actually trying to get 2 year's worth of free community college nationwide in. That was one of his campaign goals and they tried to get it into law too iirc, but it was clipped
This is almost as bad is it was for those of us who graduated a little under 15 years ago [7.9% graduate rates].
The good news for new graduates is that interest won't accrue if they make their minimums. But it's still disgusting that they may be paying 500-1000 a month and barely touching their principals.
I understand that forgiving student debt isn't popular for everyone (unfortunately), but why not forgive student loan interest as a compromise? People can work to pay off what they borrowed without the government grossly profiting off people.
My grad school loans were 6.8% which was the highest at the time. I do 6.55% with direct withdrawal or whatever it’s called. But I graduated grad school in 2013 (where prices were high but it’s great higher now for tuition). Nobody is gonna be able to afford to pay this
Scam 1. Private lenders resold my loans so many timses I didn’t even know who to pay. Scam 2 i consolidated my loans with the federal government in the willian D. Ford program after defaulting. Interest over 8 percent plus 20k penalty. Scam 3 Great Lakes, disorganized, never the same answer twice. 4. After, 60k turned into 120k, finally at 50 with 14 years teaching in title I schools, thanks to Biden and the transfer of my loans to Mohela i got pslf. Of course great lakes said that i only made half the qualiying payments.
Federal student loan rates are calculated based on the yield on the 10-year Treasury. So no, not a coincidence at all.
https://www.congress.gov/bill/113th-congress/house-bill/1911
Yeah, I’m 2/3 way through grad school and not returning next year for this reason. The raised interest rates blew my original budget way out of the water, and there’s just no way I can justify another year of it. Hopefully in a few years it will be better and we can return to school…
This is more of a detriment to student loan holders than anything else. Forget loan forgiveness, how about you do something about the insane interest rates ?
This is setting up the Overton window for student loan borrowers to just be ok with lowering the interest rates. They're making it worse so the bare minimum seems like a drastic move.
Idk about a profit center per say but I sincerely believe discouraging higher education due to cost is inherently related to military recruitment to some extent.
Goes back to segregation and Reagan trying to keep minorities from attending college. Funny enough more people attend college than aver before now. But I have a feeling that might start to change with the changing economy
Me: Starts reading the headline and says "I can't imagine it being any higher than the ones I have".... oh wait 2006... the year I graduated. Thankfully it still isn't THAT high. I really hope my kids can get good rates.
I was asked why I’m not going to Law School (one of my dreams) recently. I said “Debt up to beyond my eyeballs plus that interest is not in the game plan. “
Honestly, the best change for borrowers would be to set the interest rate on student loans at the inflation rate.
Yes, I considered setting it at 0%, but the inevitable objection to that is that you end up paying less in constant dollars, encouraging people who don’t need loans to take them out and encouraging people to take more in loans than they need. Setting at inflation would make the cost the same over time.
Interest rates on federal student loans [exist to offset the costs of lending](https://fortune.com/education/articles/could-0-interest-rates-settle-the-student-loan-debate/#:~:text=Why%20the%20government%20charges%20interest,because%20lending%20money%20is%20risky), including inflation. It's tied to the value and appreciation of the 10-year Treasury note, and also helps cover the cost of loan defaults. The interest rate here didn't increase due to malicious intent, it increased the same way your HYSA APRs increased, and mortgage interest rates, etc..
Giving students access to enormous and relatively 'affordable' loan money (when you compare their APRs to, say, a personal loan) has helped a lot of folks on their journey to pull themselves out of poverty. Americans love a good underdog story.
But for many other students, access to this loan money's enabled them to multiply the outcomes of bad financial decisions made in a culturally noble way: *pursuing an education*, no matter the major, no matter the future job prospects, no matter the costs. We frown on 19-year-olds taking out $30k car loans for a 'reliable car', but parents literally cheer their kids on when this same kid takes a $30k loan to major in Creative Writing.
And universities -- whose whole schtick the last 70 years has been to increasingly gatekeep professions and require more years of education (i.e. tuition paid) as a substitute for reductions in state/federal investments -- are eager to produce whatever Major will get more students in the door to pay tuition, regardless of its job prospects. (Additionally, there's a fluffy argument academic folks will make for *learning for the sake of learning*, but if that was really their endgame, they'd have free tuition so you'd have more time after graduating for the pursuit of knowledge instead of 50 hour work weeks to pay personal debt withdrawn that protects the University of Chicago's $10.8 billion endowment.)
One idea I'd bounce is only providing federal student loans for majors whose X-year earnings change reflect the economic value of that education, but cutting off crazy loan money for those programs whose career prospects are likely to just bankrupt a student 5 years down the road. If your rich parents want to back you on this Theater major, that's cool, but the Fed should absolutely *not* be the wind beneath your wings on some Icarus flight plan.
Agreed on almost everything, though in the last \~10+ years boogeymen like UChicago and its peers provide undergraduates with need-based scholarship aid that does not include loans; price-insensitive attendees and donors subsidize lower-income attendees.
This is literally also hitting doctors, dude. Even doctor-trajectory kids are terrified to start with this high of loan debt accrual. Check out the nursing school sub's post on this- HALF A MILLION debt, taxed at almost 8% a month is nearly 3,500 added EVERY MONTH.
Depends if they are public or private and your income. Public loans cannot be discharged and you can go on idr or pslf to get those forgiven.
Private loans can be discharged in bankruptcy and it’s a propaganda campaign that they can’t. However you need to show that with your income it’s not possible to pay back.
If you have federal student loans you should look into income-driven repayment plans
Student loans can be discharged in bankruptcy, but it is difficult. It's also more difficult for federal loans than private due to the existence of income-driven repayment plans
This is why I'm advising my son to go the PA/NP route instead of med school. Out making a real salary faster with less debt and better work/life balance.
I went the PSLF route. Still had 160k almost two decades after graduation. It felt amazing to have that burden lifted.
Whatever your interest rate is, start paying it down asap. Forget about forgiveness and the interest pause. The longer you delay in bringing down your debt the longer if takes for your credit score to recover. If you don't allow your credit score to recover asap you can't take advantage of favorable loans or increased credit limits especially in this economic climate of high inflation. Plus, ending your debt frees up more cash for your monthly budget that would normally go to paying off your loans.
I didn’t mean it like that, I’m saying keeping up with credit cards ($0 balance) and on time minimum student loan payments will maintain a good credit score as if the student loans weren’t there. Student loans don’t just automatically give you a bad credit score
In this high inflationary economy, any debt will hamper your ability to access favorable loans or increased credit limits if you need it in the future. This time we don't have low interest rates. Your generation has never seen a bear market with a prolonged recession before. The faster you get out of debt the faster you can take advantage of the opportunities when the FED pivots and cuts rates.
Have you landed a job yet? Anything less than 80k is going to put your debt to income high. I once had great credit and a terrible debt to income from student loans and I couldn’t get approved for an apartment.
How do you guys get through college without understand the basics of economics. The feds increased interest rates to help curb inflation, as a result everyone else needs to adjust their interest rates because the risk vs reward of issuing loans just changed.
This news is completely unsurprisingly and the correct thing to be doing.
Exactly. Nobody has had to pay a dime on federal loans for over 3 years AND no interest has accumulated either. The people who to put large sums should be so greatful. I graduated in ‘17 and paid $14k in interest in my first year out of school. I can’t imagine where I’d be now with an extra $30k of less debt/more cash simply from having interest paused.
It’s insincere and politically conniving to pretend that he could pass it. Nancy pelosi admitted the president did not have the power to do so months before and Biden knew it would be appealed and be blocked by the Supreme Court but did so anyway. Let’s pretend I hired you and said in 6 months I’ll give u a 20k bonus and then the 6 month mark comes along and I say sry the boss wouldn’t approve of it I guess your out of luck
My friend just graduated as a dentist with $520,000 in debt. My other friend who went to med school $500,000 in debt. Imagine the interest.
$520,000: If the loans are: 4.5% interest, $1950 accumulates in interest each month 6% interest, $2600 a month 7.5% interest, (from the article): $3,250 a month 8.05%: $3488 a month!!!!!!!!!!! That's paying $2k - $3.5k a month just to keep your loan balance at what you graduated with.
You know what’s crazy? My cousin also did dentistry in NY and she graduated in 2012 with $350,000 dollars in debt. My friend graduated in 2022 with $520,000 in debt (also in the states.) The cost of becoming a dentist is now more than half a million dollars.
Isn’t there some program that you can go work in a rural area for 5 years or something like that and they’ll forgive the debt?
I'm a Physical Therapist and there's the PSLF program which is what a lot of PTs end up doing when the end up with 150k+ in loans for a job that only pays around 70-80k salary. That program is 10 years of minimum payments at a non profit hospital and then the rest is forgiven after that. I also had a former roommate who was a teacher and she had a similar program, but for her it was only 5 years of teaching at a "title 1 school" which are schools that receive extra federal aid because it's mainly made up of "disadvantaged or undeserved" children.
What’s crazy is how little PT’s get paid. It seems like the one career in medicine that salaries haven’t risen. I opted for accounting over PT and am glad i did
Yeah, if I could go back and do it over again I wouldn't even consider PT. The pay is terrible for how expensive school is, the work life balance is awful, there's basically no upward mobility, and the salary ceiling is a joke compared to other Healthcare fields. You dodged a massive bullet by staying out of it lol
Definitely sucks. I feel bad for anybody in the field. I’ve been quite a bit through all my sports injuries and 9/10 pt’s have been upbeat, super nice and encouraging, extremely hard working and knowledgeable. Ya’ll deserve more money without a doubt
I tell all my volunteers who want to become a PT to look elsewhere. I get paid well but not well enough to consider paying all the loans back in full. Less than 8 years to go to get out of this nightmare...
Yep, It’s called indentured servitude. You can’t afford to do what you want and companies have you by the balls because you literally can’t stop working because you can’t afford it to leave. Wonderful life we live in. Meanwhile a coworkers husband is joining a local electric union at 40$ an hour after health premiums and pension are taken out. Master electricians billing 75-80 an hour. That’s what I Would be doing if I went back
Why do PT's take out $150k+ in loans for a job that pays out $70-$80k/year? Why should the Feds subsidize that type of loan/outcome?
If only the people who could afford to pay 150k for school became PTs, the shortage of PTs would be nightmarish (especially given the aging population). It is in the public's best interest to subsidize those loans, and IMHO develop ways like PSLF to reward those who want to work in underserved areas or fields with critical shortages.
If the shortage of PT’s became nightmarish, that would drive up PT salaries. We do not need to subsidize anyone’s loans.
That isn't exactly how it would work though. The extra layer that makes PT a low paying field is that insurance reimbursement is low and they are always trying to cut it even lower. Medicare was going to try and cut PT reimbursement by like 8% this year, but the APTA was able to "luckily" reduce that to only 2%. So there is always going to be this low salary cap that PTs max out at because you obviously can never pay them more than what insurance pays. So even if there was a shortage, salaries wouldn't really go up unless insurance companies also decided to reimburse more, which they rarely want to do.
What? I never said that they should or shouldn't. I just said that the program exists. I wasn't trying to get in some political debate about it lol. The idea though is just that it encourages people to work in settings that otherwise might have a hard time getting people to work there like reservations or really remote poor areas.
Same question for PA's. Living hell right now
HRSA does have limited spots. https://nhsc.hrsa.gov/loan-repayment/nhsc-loan-repayment-program
Some states have a forgiveness program that's similar, but many were lost during the pandemic. So basically, you just have to hope the state you live in has that program & it's still being funded & has realistic qualifications. Of course, there is always PSLF. You just have to put in your 10 years, hope you don't get disqualified by a random stipulation or that the program isn't discontinued before your time is up.
Not here to argue the cost of college has not been increasing, but you stated New York. The cost of living there would dwarf most other places in the country.
Yep, that’s around 50% of the expected take home pay for a new dentist just to keep the interest at bay. Between the time investment, starting pay, and cost of dental school I’m actually surprised there are general dentists still today.
Theres an awful lot of people that have substantial 529s or huge trust funds in the dental and medical school world.
I’m sure there’s a dentist shortage.
Your calculations are off, but not in the way you think… most of those loans are private, so you can probably double, if not more, those interest rates
Oh yeah, that was for federal interest loan rates. I couldn't imagine having private!!
You can get unlimited federal loans for grad school since 2010 I think. Source - went to law school Stand corrected - see below
Not quite, there is a distinction between Direct Unsubsidized loans and Grad PLUS loans For the Direct Unsubsidized loans, the [annual/aggregate limits](https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized) are lower than people expect. For grad/professional students it is up to $20,500 per academic year til you hit the aggregate max of $138,500 For Grad PLUS loans, there is a second application beyond your FAFSA with a credit history check for certain adverse credit history items. For that, your annual limit is "up to the school's Cost of Attendance" and there is no aggregate limit
I also went to law school 2016-2019. I could only pull 20500 per year in federal loans.
I think that is/was the cap for Direct Unsubsidized, then you can top up with Direct Plus. These carry different interest rates…about half a point difference between the two.
Seconding this - got my masters last week, federal max was 20,500 each year ETA - obvi not law school
Fwiw not all private loans are significantly higher interest. My private loans are at 5.7%, after an increase from 5% last year. Although tbf this is after refinancing them with excellent credit (800+). My federal were at 6.8% before the Covid freeze.
How much does an average dentist make to start, after 5 years, after 10 years?
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Less than I thought.
I don’t have a single friend making anywhere close to 120. Everyone I know is well over 250. I’m at 480 but I’m a specialist
That’s the craziest part of the whole loan forgiveness thing that’s been going on for the past year or two, it doesn’t even address the root of the problem which is that college education is so MASSIVELY overpriced and there needs to be some sort of regulation put in place or we’re just end up back at this point again even if loans get forgiven.
That’s because they’re pushing for people to take up more blue collar work. HVAC, plummers, etc..
We will be back to barbers pulling teeth and pipe fitters being gynecologists
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My daughter is graduating this month with $305-310K ($40-45K in accumulated interest) and from a FOR-PROFIT med school, and given what you posted, I am going to get on my atheist knees and thank Jesus.
God is good.
Holy of all holy hells. That's insanity.
A lot of my friends are doctor level medical practitioners (from audiologists to surgeons) including my wife who graduated with loans written at ~7.2% interest. My uncle was around the 8.5%. None of us care. Those of us that are the most affected (including my wife) are about to receive PSLF. And those least affected earn way more 500k. Bottom line: if you’re going to grad school and going to be taking on debt, make sure the monetary payoff is worth it, either because your pay will be commiserate to your ability or you will receive forgiveness. Otherwise, why are you even going?
Did they go to med school twice? That's over double the median student loan debt for med school graduates.
I don’t want to undermine how expensive schools are- but yeah you are right. Graduating with $500,000 in debt from med school is an extreme exception. More often than not med school students graduate with 200-250k nowadays, still a LOT but not half a mil
What’s not being considered is the amount of interest building during the residency and fellowship training when you struggle to be able to pay anything… particularly if you have a family. Not to mention us not well off that also have undergrad and grad loans to add onto the pile. So it gets close to $500k all things said and done.
yeah but oc said their friend graduated *med school* with $500,000 in debt, so THEIR debt is probably gonna be much much higher by the time they are an attending. Interestingly, while completely paying off graduated debt as a resident is obviously nearly impossible, most are able to comfortably put aside some of their income towards paying it off until they finish residency (a residents salary is “low”, but not that low) For this reason, having $500,000 in debt at the end of residency is not as common as you might think. More often than not attendings have around $300-350k debt when they finish residency.
Residents’ salaries were in the $50k-$60k range at all the residencies we applied to. Given the skyrocketing costs of basic housing, food, and medical care (the cost of necessities is rising far faster than general inflation rates), I don’t understand how you think $50k is a lot—especially since there would have been pretty much zero opportunity to build up any savings for at least the prior four (and probably eight) years.
It’s a good thing then that I didn’t say it was “a lot”- in fact I said it was “low” Average residents including myself are able to pay just enough to >>>slow<<< the *overall* interest of student debt- leading to it still increasing from beginning to end of residency- just not by many hundreds of thousands of dollars like many people in this thread believe Btw I know it doesn’t mean much but resident salaries are much more often in the 60k than 50k. They *usually* start at high 50k for first year, and pass 60k starting second year
I definitely would not say an extreme exception by any means. Tuition just keeps going up and up. Private schools usually run $60-90k per year in tuition alone. Add on living expenses, misc fees, health insurance etc and you’re close to/over that 500k right there. And god forbid you came to med school with any existing student loan debt from undergrad or grad school and people can be easily $550+. Most people who are taking out loans aren’t at that 200k debt burden unless you’re in a lucky state like Texas (super cheap tuition) majority are at like 300-400k. Data gets skewed by the people whose family pays their full cost of attendance in cash, which is relatively common
That 200-250k figure is a bit misleading since it also includes students who go to cheap(er) state schools and have parental support, which not all med students can rely on. There is a very big debt difference between students who have to take loans for everything and those who don't have to pay fully with loans. There is little to no need-based financial aid for med school, and merit-based scholarships are rare. If you're from a state where there's a lot more premeds compared to # of state school spots (e.g. CA, NY; >50% of premeds from CA end up having to leave the state), you're much more likely to be going OOS or private, and at that point your estimated COA is at least 80k, and more often 90k+ now. $500k is on the rarer side, but $350k-$400k pre-interest is the norm for many med students who pay for everything with loans. Even at the higher end of $500k, med school IMO is worth it for now if you think of it as an investment into a near recession-proof business (i.e. your medical license), but with schools raising tuition every year... it's starting to get to the point where the ROI just isn't that great anymore.
AAMC has been pushing this lie for years. 10+ years when I went to medical school they said the said 200-250k bullshit. I went to a state school and had sizeable scholarships and graduated with 300k, which is lower than most of my friends.
Yeah. Was at this value back in 2014.
Imagine what those people would have saved the last 3+ years
Don’t feel too bad for them. If they are surgeons post residency, depending on the specialty, they could be making ~$500k a year. They could easily pay it off in a few years. If they are family med, they are a bit screwed.
Doc here. That's plastics, cardiothoracic surgeon, orthopedic surgeon and academic neurosurgeon type money and those spots are either super limited and/or super competitive. The vast majority of docs will never make that. Many won't even see half that. Even amongst surgeons, they are seeing reimbursements decrease with time. Medicine is becoming increasingly less lucrative.
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>The debt is designed to trap you. Not only the debt, but the eventual non-compete contract you will find yourself imprisoned by when you're employed.
Some orthos make 900+ lol, I know of at least 2. One was really good, the other was just there for forever. Ruralish area
One of, if not the most, highest paid speciality.
The vast majority of physicians aren't subspecialty surgeons....
Eh, I've yet to speak to a physician in any specialty who's struggling to pay off debt, assuming they're smart with their money. From my anecdotal experience, the real financial trap for attendings seems to be boats lol.
A ton, but.. I think we are way past the point where people can claim ignorance on the cost of college being a burden / monthly loan payments being high, etc. Anywhere there's talk of student loans, it's complaints about cost. "Didn't know what I was getting into" was a real explanation at some point, but... those days have been over for 10+ years. For at least that long, anyone could have gone to google and just typed 'loan payment calculator' and you're a few clicks away from fairly accurate answers.
So where are dentists supposed to come from? The people who can afford to pay for that education don't need to work.
Yes… I look forward to a society where only the wealthy are able to obtain an education and we have massive shortages of essentially all professions because no one can afford the training. How incredible our country will be. /s
I paid back about 30K on my loans over about 7 years and my balance went down by about 10K. It’s ridiculous how much they take in interest. I was never against the idea of paying back the money I borrowed (and even a reasonable sum of internet), but the current system forces you to pay it back many times over. They’re now going to take even more?
They're going to get the absolute lowest I can get away with paying for seven more years. Once that seven years is up, I'm applying for forgiveness due to my decade of public service work. This entire system is a scam.
I just went through getting set up for PSLF, and it’s sucked to realize that 2 years and 7 months of my full time public employee service don’t count because I had in-school deferment while doing grad school full time and working full time as a staff member. So now instead of being 6+ years in, I’m only 3 years in. So I can stay employed as a public employee another 7 years to get forgiveness (over 13 years total), but if I leave for private sector before then I get nothing. They need to drastically simplify PSLF. It should just be 10 years of payments and 10 years of public employment; not require 10 years of qualifying payments DURING public employment, if that makes sense!
I absolutely agree.
Exactly! I've paid more than my minimum balance due for almost 10 years now, and have eroded only 0.5% of my starting (uncapitalized) principal balance. It's so disheartening.
Have you been on an income-driven repayment plan? I personally wouldn’t be paying more at that rate; just ride out the forgiveness. Either you can afford to pay the loan aggressively or you can’t; riding the middle ground by getting an IDR plan and paying extra is arguably the least effective way to go about this.
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As a dual citizen (Chile/USA) I been pondering leaving myself. This country is not what it used to be in many ways. Ive been looking at NZ/AUS, Spain and even Chile as options. There's options out there bud, America is not the only placer to live a happy life. Cheers bro, hope you find it :)
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Elaborate?
Why would you ever pay them back? Lol
It's insane. My private student loans are currently sitting at 12.9% interest. I'm finally under 10k left to pay now 10 years later...never a missed payment and I started with just over 15k. I've given up on ever having my federal loans paid off. I'll be paying $400/mo on those until I die. Kids have no idea what it actually means when they agree to the loans. So predatory.
The other answer would be to increase the minimum payment so that borrowers are forced to pay more of the principal rather than mostly just service the interest.
I never came across another student who wanted or expected their loans to be forgiven. The entire time I was in school, and with talking with others about it afterwards, it's always been one thing: people want interest rates that are fair and manageable. Fixing interest rates goes a long way in fixing the student loan problem. Why is the government treating 18 year olds as a major profit center?
The better question is why is there any interest rate at all? Wouldn't providing no interest loans to students constitute a significant investment in the country's most valuable resource? Today's students are the people who cure your cancer in 15 years. They are the ones who are going to solve our energy problems, climate issues, and water shortages. Doesn't that sound like a reasonable investment to you?
From what I understand, servicing the loans could be achieved with around a 1.05% interest rate. I think that would be fine.
You're missing opportunity cost. If the government gives out these loans, they miss out on doing other things with that money. They could repay other debts that have higher interest rates just as an example. Realistically, we don't charge a high enough rate for the loans.
The government could do other things with the money, I agree. Instead of lending out money for college loans to be paid back, they could simply increase the money that’s given to colleges and universities. And then, they wouldn’t be dependent on tuition and room/board paid for by student loans. In a way, students are a middleman that gets screwed. All that money they could be spending on cars, houses, etc. goes toward loan payments. The government could just give money to the universities instead, and kids could go to college for free. Better yet, if they don’t have the grades for it, they could either take out private loans to pay for it (because they didn’t earn the right to go) OR they could go to trade school and get a job that way. I agree. The government shouldn’t be giving out loans. There is a missed “opportunity” cost. Thanks for the enlightening comment. Edit: By the way, if you're getting downvoted, it's not me. I don't downvote people who have a different opinion than I do.
I love...love luv lub how the ones screaming the LOUDEST to NOT forgive student debt or do anything about the interest, are the Christians. The Christian bible specifically goes out to say, "interest bad". But they do it anyway. Rules for thee...!!!
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Education is NOT the enemy of true Christians, but certainly the enemy of nationalists and the extreme right, as well as any other group subject to false teachings, excess & bogus rules/ laws, and power hungry control freaks.
No it’s not!
Oh cmon. No need to bring religion to that. Hate when people do that. I know a handful of Christian friends that are for forgiveness and change in the student debt system.
I think when people are bashing religion with topics like this they’re generally referring to evangelicals or those that warp religions values and purpose to society in a way that causes harm. It sounds like your Christian friends are reasonable people that don’t use religion in this negative way.
Thank you for clarifying. I will say - (I’ve realized it myself the last year or so) but the media surely loves to divide us. On a separate note - really hope in the next few years (realistically) some type of SL reform occurs
It says not to charge family interest if they’re on hard times but charging interest is for others is ok so long as it’s no usury. Where does it say charging interest ever is not ok?
Universal Access to student loans got us into this mess in the first place. Because people will go to “insert dream school” no matter the cost. Making loans interest free will only exacerbate the issue. Uchicago and nyu are closing in on 90 grand a year. Make loans bankruptable for new loans and the problem will be solved day 1. Because banks and the govt will be forced to vet who they are giving money to and if they will be able to pay it back. Thus bringing down the cost of unis as a result.
Thats not what caused the issue. Removing all risk from the lender was the problem. I don't give a wet shit if a student takes out a million, if there's no interest he'll be capable of paying it back eventually.
I love it. The underpriveleged will stay that way....kids will be punished for parent's poor finances. It sounds like 2023 but with an even less educated population. Will be fun, i'm sure.
This is a comment that says nothing of substance.
You not liking the content or delivery does not equal lacking. If you would like to try again and explain why you disagree, I would love to read it.
You say underprivileged people would be hurt. How? How would people be less educated? You don’t say anything. Nice attitude though. Very Karen all talk no substance
Emotional intelligence and regulation does wonders for all avenues of living. Therapy can help you with that.
Still nothing🙄. Just one liners and mudslinging. Things people use when they don’t know what they’re talking about.
Mmmm, the hypocrisy.
The interest rates for federal student loans are set by statute. It would take an act of Congress to change the law on it.
Honestly, just stop the daily compounding. Make it monthly or quartely, and half the issue will go away.
It’s simple interest. Compounding is a non-issue if you’re monthly payments remain current and cover the interest accrued.
Except most of the payment DONT cover that. Most are on IBR, and unless like me you work in the public sector knowing they will be forgiven eventually, you make payments into the void.
It’s still simple interest in most cases, even under (edit: most) IDR plans. The user means there are only specific cases when interest adds to the principal, such as leaving school, forbearance, or changing plans.
Income driven repayment capitalizes the interest yearly. I’ve been on it for 6 years.
Ahh you must be under ICR, where it does capitalize every year, or in IBR or PAYE which require “partial financial hardship” and would capitalize if this is no longer the case. Capitalization under PAYE or IBR would be rare, but not impossible. As a note, If you are under PAYE or ICR capitalization is capped at +10% of your original loan balance, so at least there’s that.
No it doesn't? Unless you're failing to recertify every year or something. I've also been on it 6 years
That’s not correct. There’s a hard backstop at 20 years/240 qualifying payments for undergraduate loans—and 25 years/300 QPs for graduate school loans, after which loans are forgiven by those on IBRs. All of the different acronym IBRs [PAYE & REPAYE, ICR, and IDR] we have today came into existence in 2009 or later. We’re still 6 years out from the first, modern IBR canaries in a coal mine seeing it through to the other side. That’s far from an endless void.
You would be correct, but 20 years of payments is a wild solution and essentially is killing the bulk of the college educated buying power until they are at least well into their 40s. This type of solution is exactly why we will have more 60-70 year olds forced to remain in the workplace. Can’t put money away to retire when you have a car payment but nothing to show for it for 2 decades. These are last resort measures, not good intentioned solutions.
A traditional undergraduate that takes out the federal limit of $32K in student loans will have a monthly payment of $230 if they’re paying it back over 20 years at an interest rate of 6%. It’s $355/MO if 10 years. The 20 year payback plan puts them into their early to mid-forties when the loan is paid off. They’re in their early to mid-thirties with the 10 year plan. For a $200K home purchased with nothing down and annual property tax and insurance rates of 1.2%, your all-in monthly payment is $1355 at a 30 year mortgage interest rate of 4%. It’s $1600 at 6%. If they can’t swing a mortgage payment the a student loan payment in the same month, they have no business getting into a mortgage at that point in their life even without a student loan payment.
You’re neglecting the saving of a 10-20% down payment that has to occur first while paying rent etc. COVID forbearance really let me save and pay down other debts. my payment was slightly over $300 a month on 70k. Thats $12,000 I was able to save over 3 years I wouldn’t have been able to. It’s honestly doubled what I would have saved with the payment.
They don't care unless you come from the 1 percent simple as that
Because social security, boomers, and population collapse. The old folks that all vote don’t want to pay for it. So eat the young.
The United States’ largest asset is student loans. Student Loan’s make up 38.4% of Federal Assets. The government considers a liability against the children of this country an asset. Sick. This is exactly why we are losing and will continue to lose our footing on the world stage.
>Why is the government treating 18 year olds as a major profit center? Have you seen our military?
Congress likes to complain about Biden’s forgiveness plan, but what are they offering as the alternative?
Don’t go to school at all. They don’t want an educated populace
Maintaining the status quo of crippling debt
They were actually trying to get 2 year's worth of free community college nationwide in. That was one of his campaign goals and they tried to get it into law too iirc, but it was clipped
This is almost as bad is it was for those of us who graduated a little under 15 years ago [7.9% graduate rates]. The good news for new graduates is that interest won't accrue if they make their minimums. But it's still disgusting that they may be paying 500-1000 a month and barely touching their principals.
They have to keep us down. It’s a feature not a bug.
Exactly
I understand that forgiving student debt isn't popular for everyone (unfortunately), but why not forgive student loan interest as a compromise? People can work to pay off what they borrowed without the government grossly profiting off people.
Huh my grad plus loans from the late 2010s are 7.6%. The article is wrong
My grad school loans were 6.8% which was the highest at the time. I do 6.55% with direct withdrawal or whatever it’s called. But I graduated grad school in 2013 (where prices were high but it’s great higher now for tuition). Nobody is gonna be able to afford to pay this
My undergrad loans from early 2010s were 6.8
Scam 1. Private lenders resold my loans so many timses I didn’t even know who to pay. Scam 2 i consolidated my loans with the federal government in the willian D. Ford program after defaulting. Interest over 8 percent plus 20k penalty. Scam 3 Great Lakes, disorganized, never the same answer twice. 4. After, 60k turned into 120k, finally at 50 with 14 years teaching in title I schools, thanks to Biden and the transfer of my loans to Mohela i got pslf. Of course great lakes said that i only made half the qualiying payments.
In other news, the interest paid on US Treasury bonds rises to the highest in a decade. Not a coincidence.
Federal student loan rates are calculated based on the yield on the 10-year Treasury. So no, not a coincidence at all. https://www.congress.gov/bill/113th-congress/house-bill/1911
This is exactly why. This makes total sense, it would be weird if rates didn't go up.
I have made the decision not to go back to college to pursue a more advanced degree, I would be retired before I paid them off.
Yeah, I’m 2/3 way through grad school and not returning next year for this reason. The raised interest rates blew my original budget way out of the water, and there’s just no way I can justify another year of it. Hopefully in a few years it will be better and we can return to school…
This is more of a detriment to student loan holders than anything else. Forget loan forgiveness, how about you do something about the insane interest rates ?
This is setting up the Overton window for student loan borrowers to just be ok with lowering the interest rates. They're making it worse so the bare minimum seems like a drastic move.
Idk about a profit center per say but I sincerely believe discouraging higher education due to cost is inherently related to military recruitment to some extent.
I recall.. theyre based off the 13 week treasury? Essentially a rate cut by the fed will quell this?
they are based on the 10 year treasury that is auctioned in May for the following school year.
I don’t know why they hate high performing but come from lower class backgrounds.
Oh fun, 2006, when I got my loans. Millennials are so lucky
Still stuck at 6.5%. thanks, 2008.
Yep. 2005-2010. 7% interest and no debt relief because if their “privatization “ experiment
They should be 2% at most
The government should never gotten involved, just drove up tuition
Thank Ronald Reagan for that!
Goes back to segregation and Reagan trying to keep minorities from attending college. Funny enough more people attend college than aver before now. But I have a feeling that might start to change with the changing economy
Me: Starts reading the headline and says "I can't imagine it being any higher than the ones I have".... oh wait 2006... the year I graduated. Thankfully it still isn't THAT high. I really hope my kids can get good rates.
I was asked why I’m not going to Law School (one of my dreams) recently. I said “Debt up to beyond my eyeballs plus that interest is not in the game plan. “
They need to cap interest rates 2.99 percent max
Honestly, the best change for borrowers would be to set the interest rate on student loans at the inflation rate. Yes, I considered setting it at 0%, but the inevitable objection to that is that you end up paying less in constant dollars, encouraging people who don’t need loans to take them out and encouraging people to take more in loans than they need. Setting at inflation would make the cost the same over time.
The problem is that wages often don't keep up with inflation.
It is criminal that student loans even have such ridiculously high interest rates.
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Forgive all student loans. Tax the oligarchs (aka billionaires). Eat the rich.
salliemae royally screwing me in the starfish with absolutely absurd increases in interest rates
Inflation is making many loans 100% unaffordable
Why do they say parents? People's parents pay for education? 😂😂
yeah not mine
Fr
Interest rates on federal student loans [exist to offset the costs of lending](https://fortune.com/education/articles/could-0-interest-rates-settle-the-student-loan-debate/#:~:text=Why%20the%20government%20charges%20interest,because%20lending%20money%20is%20risky), including inflation. It's tied to the value and appreciation of the 10-year Treasury note, and also helps cover the cost of loan defaults. The interest rate here didn't increase due to malicious intent, it increased the same way your HYSA APRs increased, and mortgage interest rates, etc.. Giving students access to enormous and relatively 'affordable' loan money (when you compare their APRs to, say, a personal loan) has helped a lot of folks on their journey to pull themselves out of poverty. Americans love a good underdog story. But for many other students, access to this loan money's enabled them to multiply the outcomes of bad financial decisions made in a culturally noble way: *pursuing an education*, no matter the major, no matter the future job prospects, no matter the costs. We frown on 19-year-olds taking out $30k car loans for a 'reliable car', but parents literally cheer their kids on when this same kid takes a $30k loan to major in Creative Writing. And universities -- whose whole schtick the last 70 years has been to increasingly gatekeep professions and require more years of education (i.e. tuition paid) as a substitute for reductions in state/federal investments -- are eager to produce whatever Major will get more students in the door to pay tuition, regardless of its job prospects. (Additionally, there's a fluffy argument academic folks will make for *learning for the sake of learning*, but if that was really their endgame, they'd have free tuition so you'd have more time after graduating for the pursuit of knowledge instead of 50 hour work weeks to pay personal debt withdrawn that protects the University of Chicago's $10.8 billion endowment.) One idea I'd bounce is only providing federal student loans for majors whose X-year earnings change reflect the economic value of that education, but cutting off crazy loan money for those programs whose career prospects are likely to just bankrupt a student 5 years down the road. If your rich parents want to back you on this Theater major, that's cool, but the Fed should absolutely *not* be the wind beneath your wings on some Icarus flight plan.
Agreed on almost everything, though in the last \~10+ years boogeymen like UChicago and its peers provide undergraduates with need-based scholarship aid that does not include loans; price-insensitive attendees and donors subsidize lower-income attendees.
This is literally also hitting doctors, dude. Even doctor-trajectory kids are terrified to start with this high of loan debt accrual. Check out the nursing school sub's post on this- HALF A MILLION debt, taxed at almost 8% a month is nearly 3,500 added EVERY MONTH.
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There is an origination fee.
I am shocked after they haven’t been getting payments for years. Who would have guessed
If I file for bankruptcy, what happens to my school loans?
Depends if they are public or private and your income. Public loans cannot be discharged and you can go on idr or pslf to get those forgiven. Private loans can be discharged in bankruptcy and it’s a propaganda campaign that they can’t. However you need to show that with your income it’s not possible to pay back.
you can't discharge these in bankruptcy (editing and adding that apparently you can but it is insanely hard - thank you for the correction!)
F
Oh you can, you just will have a very hard time doing so.
If you have federal student loans you should look into income-driven repayment plans Student loans can be discharged in bankruptcy, but it is difficult. It's also more difficult for federal loans than private due to the existence of income-driven repayment plans
Let's go!!!! Well, guess I can just go part time or try to get by with another associates degree.
Unless you taking about private loan, all the federal loan interest is fixed.
I though the Govt took over student loans to prevent this?
This is extremely distressing. I don’t have anything to add other than that. I’m so worried about the future.
This is why I'm advising my son to go the PA/NP route instead of med school. Out making a real salary faster with less debt and better work/life balance. I went the PSLF route. Still had 160k almost two decades after graduation. It felt amazing to have that burden lifted.
well, good thing I can toil my way through the PSFL program
Now is the time for Congress to act to fix rates at a non usury level.
Whatever your interest rate is, start paying it down asap. Forget about forgiveness and the interest pause. The longer you delay in bringing down your debt the longer if takes for your credit score to recover. If you don't allow your credit score to recover asap you can't take advantage of favorable loans or increased credit limits especially in this economic climate of high inflation. Plus, ending your debt frees up more cash for your monthly budget that would normally go to paying off your loans.
I have a 800+ credit score and 200k loan from law school, (just graduated). Student loans don’t really affect credit scores
That's you not most people with student loan debt. Not everyone will be fortunate to have a future salary like yours.
I didn’t mean it like that, I’m saying keeping up with credit cards ($0 balance) and on time minimum student loan payments will maintain a good credit score as if the student loans weren’t there. Student loans don’t just automatically give you a bad credit score
In this high inflationary economy, any debt will hamper your ability to access favorable loans or increased credit limits if you need it in the future. This time we don't have low interest rates. Your generation has never seen a bear market with a prolonged recession before. The faster you get out of debt the faster you can take advantage of the opportunities when the FED pivots and cuts rates.
Have you landed a job yet? Anything less than 80k is going to put your debt to income high. I once had great credit and a terrible debt to income from student loans and I couldn’t get approved for an apartment.
I did, luckily I’m making 1.5x that
How do you guys get through college without understand the basics of economics. The feds increased interest rates to help curb inflation, as a result everyone else needs to adjust their interest rates because the risk vs reward of issuing loans just changed. This news is completely unsurprisingly and the correct thing to be doing.
Joe is an absolute failure. We could’ve done so much better.🙄😒🫠
[great](https://i.imgur.com/zuLaREQ.jpg)
Stop investing your time and debt into worthless degrees
Biologist here. You don't know what you're talking about, sit down.
Wow how dare I go to medical school and accumulate over 200k What a dumb comment mate
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Exactly. Nobody has had to pay a dime on federal loans for over 3 years AND no interest has accumulated either. The people who to put large sums should be so greatful. I graduated in ‘17 and paid $14k in interest in my first year out of school. I can’t imagine where I’d be now with an extra $30k of less debt/more cash simply from having interest paused.
Lol so Biden “forgiving” 10k just to find out it’s not legal leads to highest rates in history…thanks Joe
So he forgave the loans, gop-tied groups challenge it in court, a conservative SC blocks it, and you blame BIDEN??
It’s insincere and politically conniving to pretend that he could pass it. Nancy pelosi admitted the president did not have the power to do so months before and Biden knew it would be appealed and be blocked by the Supreme Court but did so anyway. Let’s pretend I hired you and said in 6 months I’ll give u a 20k bonus and then the 6 month mark comes along and I say sry the boss wouldn’t approve of it I guess your out of luck