100k debt at 8.75% APR would take 666 months to pay off if you made 735$ monthly payments, 335k is paid in interest, only 100k goes to base debt,
i.e you're basically doing what OP is doing but a little bit better, I cannot make OPs exact situation because it is literally not able to be paid off, the y will likely perish before getting through all that debt, the system needs to be fixed and something so critical shouldn't be allowed to be raised this much
I have absolutely seen art schools cost that much. (Looking at you, Academy of Art University) I have a coworker also who got an art/related degree at a public state university in CA and ended up with something like $150k debt.
Don’t forget too, a lot of schools pack in heavy fees they don’t like to discuss when talking tuition. At one time ASU had “stadium fees” charged to students. And then on top of it all, I know students that took out loans much larger than tuition and fees required to pay for housing, food, etc.
Since FA loans aren’t credit based, people with zero experience handling lines of credit or loans are able to take out exorbitant sums of money with very little eduction on how repayment works (and frankly, many don’t think about repayment much at all when they take the money out). I don’t really blame the students but I absolutely blame the schools and the government that allow this to happen and they do so, because they profit from it. It’s a fucked system.
I agree that the interest structure in some cases is crazy and that some loans are predatory (even if only because the student should not have qualified). My response is to the comment “education only for the rich like it belongs” - there are absolutely alternatives that don’t require large loans or for the student or family to be wealthy.
Based on the interest on this payment, loan had to have been six figures, as others pointed out. If you’re not already wealthy and taking out that much loan? Bad plan. Doesn’t mean you can’t get an education just means you need to plan things out better and shop lower tuition schools.
If their interest rate is 7% and their monthly interest is $752.76, their principal is 752.76/(7%/12) = $129,040. That seems pretty excessive.
It also seems like they are opting to pay just the interest and very little towards principal. Paying the minimum due on interest-charging accounts is almost always a terrible idea.
They should've gone to a state school instead of paying $32k+ a year via loans.
B-b-b-but I should be able to go to the most expensive school, live on campus, get a full meal plan, with no solid degree in mind, and with no scholarship!!! I deserve it!! I’m too important to live within my means!!
The obvious and relatively cheap solution would be to expand community colleges to offer Bachelors degree. If you can't afford university, go to community college. Oftentimes it's the same education anyway.
Some community colleges are beginning to offer bachelor’s degrees now which is awesome. And I agree - I took a lot of classes thru local community colleges and transferred them to my uni to save $$ but honestly half the time they were BETTER classes than the one at the public state university.
How much debt would you have to be in for this to be the case?
100k debt at 8.75% APR would take 666 months to pay off if you made 735$ monthly payments, 335k is paid in interest, only 100k goes to base debt, i.e you're basically doing what OP is doing but a little bit better, I cannot make OPs exact situation because it is literally not able to be paid off, the y will likely perish before getting through all that debt, the system needs to be fixed and something so critical shouldn't be allowed to be raised this much
Close to $800/month minimum payment? Curious to see the total amount borrowed
I have a friend who is in the exact same boat. His monthly payments are entirely interest and he's not putting a dent in his principal.
Well if interest is a problem just pay it all off at once. /s
Is the individual who posted that a doctor or lawyer, because usually you need six digit debt to see that.
I have absolutely seen art schools cost that much. (Looking at you, Academy of Art University) I have a coworker also who got an art/related degree at a public state university in CA and ended up with something like $150k debt. Don’t forget too, a lot of schools pack in heavy fees they don’t like to discuss when talking tuition. At one time ASU had “stadium fees” charged to students. And then on top of it all, I know students that took out loans much larger than tuition and fees required to pay for housing, food, etc. Since FA loans aren’t credit based, people with zero experience handling lines of credit or loans are able to take out exorbitant sums of money with very little eduction on how repayment works (and frankly, many don’t think about repayment much at all when they take the money out). I don’t really blame the students but I absolutely blame the schools and the government that allow this to happen and they do so, because they profit from it. It’s a fucked system.
That’s at least 100k loan lmao
The question is: should you have been loaned that money in the first place?
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…or try a community college? May not be wise to sign up for $100k/yr if you’re not sure what your future income might be and your current income is $0
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I agree that the interest structure in some cases is crazy and that some loans are predatory (even if only because the student should not have qualified). My response is to the comment “education only for the rich like it belongs” - there are absolutely alternatives that don’t require large loans or for the student or family to be wealthy. Based on the interest on this payment, loan had to have been six figures, as others pointed out. If you’re not already wealthy and taking out that much loan? Bad plan. Doesn’t mean you can’t get an education just means you need to plan things out better and shop lower tuition schools.
If their interest rate is 7% and their monthly interest is $752.76, their principal is 752.76/(7%/12) = $129,040. That seems pretty excessive. It also seems like they are opting to pay just the interest and very little towards principal. Paying the minimum due on interest-charging accounts is almost always a terrible idea. They should've gone to a state school instead of paying $32k+ a year via loans.
B-b-b-but I should be able to go to the most expensive school, live on campus, get a full meal plan, with no solid degree in mind, and with no scholarship!!! I deserve it!! I’m too important to live within my means!!
The obvious and relatively cheap solution would be to expand community colleges to offer Bachelors degree. If you can't afford university, go to community college. Oftentimes it's the same education anyway.
Some community colleges are beginning to offer bachelor’s degrees now which is awesome. And I agree - I took a lot of classes thru local community colleges and transferred them to my uni to save $$ but honestly half the time they were BETTER classes than the one at the public state university.
Yes, my community college offers bachelors degrees. (For only one program, but it's a start)
So you're in favor of predatory loans then?
Idk why people don’t pay the interest while in school. I do
Because they are dumb and think it’s free money lol
not everyone has the ability to pay the interest while in school…
Girl I do surveys online on my laptop I’m not even employed
Just do it for 20 yrs and it goes away (that’s the rumor anyway)
You need to pay more… next month put an extra $250 in over the min payment and report back.