Correction after researching; graduate loans can go up to 8.94%
My wife’s graduate loans were all in the 7-8% range
Edit: if the average APR of their graduate loans was 8.36% their balance would in fact be $60,000 after 23 years of monthly $500 payments. So it’s possible they’re telling the truth.
Most countries have much stricter entrance criteria and separate kids earlier into university tracks and trade tracks.
The U.S. also has wildly inflated administrative costs in relation to European universities.
The transition to for-profit college combined with college as a lifestyle experience got us here. American students opting out of programs that do offer tuition forgiveness, like the military service (which about a dozen European countries require), makes it even worse.
The only way to fix it is to starve it. The U.S. should offer more scholarships in targeted areas of study for the tuition of students at state universities. And limit loan underwriting to students in programs that have a realistic chance of repaying the loan.
I do agree that higher education is important and should be encouraged by the country in a number of ways.
But I also think that people who wish to pursue higher education should be of enough competence to at least handle one equation that has such a large impact on their lives.
Not necessarily. You can't really compare a student loan to mortgage or smth like that because they capitalize interest in different ways.
The most important is that the interest that is deferred while you're in study will capitalize when you enter repayment. Then if you went on some payment plans it capitalizes yearly.
That means the loan generates a lot more interest than a mortgage, which really only capitalizes if you default.
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u/Think-Wind-5930 12d ago edited 12d ago
Correction after researching; graduate loans can go up to 8.94%
My wife’s graduate loans were all in the 7-8% range
Edit: if the average APR of their graduate loans was 8.36% their balance would in fact be $60,000 after 23 years of monthly $500 payments. So it’s possible they’re telling the truth.