Author Topic: Peak Education  (Read 10475 times)

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Offline mu2010

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Re: Peak Education
« Reply #630 on: June 14, 2018, 12:18:30 PM »
My undergrad loans, I believe, were amortized over 10 or 12 years. Not sure what was different and why some over over 15, 20, or more years. I was in school from '06-'10, I paid off the loans early and was done by the end of '15. The government loans were around 6% fixed and I also had a private bank student loan that was variable, but always around 4% after the recession.

Offline jmecklenborg

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Re: Peak Education
« Reply #631 on: June 14, 2018, 12:27:12 PM »
I believe

^See, even those of us who are reasonably intelligent don't quite understand what is going on with these loans.  I certainly received zero consultation prior to borrowing the money or after I graduated.  I remember knowing that you got a six-month grace period but I was really confused when I started getting mail in 2005 about consolidating my loans.  It looked like a scam (there was no website and I think I called but could never get through) but I did it and my interest rate dropped precipitously on the old loan.  It did on the newer loan too, but that loan seems like it switched to a variable rate after having been a fixed rate.  Nobody tells you anythying! 

Offline Gramarye

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Re: Peak Education
« Reply #632 on: June 14, 2018, 12:27:44 PM »
I think many schools simply shunt students into "default" (no pun intended) loans with certain providers.  I never actually sought out Bank of America as my law school student loan provider.  It was just who the financial aid office worked with and it would have been a much bigger lift than it was worth to go to a different provider, especially considering that I didn't really have some sweetheart deal with a different provider lined up, and I was reasonably confident that I wasn't going to do much better anywhere else.

Same with the term lengths.  In fact, the term on one of my loans randomly changed at some point (after it was acquired) and I didn't even call to fight it.  It was a 15 year loan.  After it was acquired, my payment suddenly dropped by a decent amount.  I eventually realized they were now treating it as a 20 year loan.  At first I was annoyed because it means more interest over the life of the loan.  But it's 1.625% interest.  If someone wants to give me 1.625% unsecured credit on 20-year fixed terms, even if it wasn't what we originally negotiated (especially because there really wasn't a negotiation and I just kind of signed the standard option, not much different than clicking "Agree" to the Apple terms of service), I'm willing to let someone with a more serious problem tie up their customer service line.  I just laugh and enjoy the story because it means the loan purchasers didn't even really read the note itself.  In fact, it's entirely possible that they still haven't gotten physical possession of it and couldn't read it even if they wanted to.

Offline taestell

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Re: Peak Education
« Reply #633 on: June 24, 2018, 07:39:42 AM »
The increases are largely due to an arms race among colleges for the newest and fanciest facilities. It's a tremendous waste of resources and the cost of it all is being passed on to 18 year olds in the form of debt that will take 15 years to pay off.

In smaller countries like France and England there are maybe 20~ major universities and their relative "rank" has been known for many years.  But in the United States, with 200+ major colleges and universities, and hundreds of smaller places, they offer innumerable competing programs. 

Also, the payoff period for loans I believe is 20+ years, not 15.  I am still paying on a $4,000 loan from academic year 1996-97.  The interest rate was originally 5.5% but has been 1.9% since a 2005 refinance, which is why I've been taking my sweet time paying it off.  The balance is probably under $1,000 at this point. 

Well that is the unavoidable result of (1) states no longer funding public universities → (2) public universities having to get more of their funding from tuition rather than the states → (3) universities realizing that potential students care more about having nice dorms and rec centers than academic programs, and since they now have to "run like a business", they have to offer these amenities in order to attract the tuition-paying students. The whole thing could be avoided if we just shifted funding of universities back to the government.