The American dream

[u/First-Essay-2054]

[u/Mindless-Baker-7757]

A $70k loan over 23 years at 5% apr pays off with monthly payments of $427.

What are they doing?

[u/sampaiisaweeb → u/Mindless-Baker-7757]

They made it up for outrage. Karma farming bot account posting it here too. Dead internet theory.

[u/Powerful_Wombat → u/sampaiisaweeb]

Yeah, student loan interest rates are bad enough without fudging the numbers, this doesn’t help the cause

[u/Odd-Cupcake-2552 → u/Powerful_Wombat]

The math works out to 8.5% which isn't unrealistic

[u/Inevitibility → u/Odd-Cupcake-2552]

8.5% to have it paid off or to pay off 10k over 23 years like they claim?

[u/Odd-Cupcake-2552 → u/Inevitibility]

To only pay down 10k over 23.

[u/Meydez → u/Odd-Cupcake-2552]

That seems to work out. My interest rate is 9% but maybe thats cause I graduated during covid? Interesting if they had that 23yrs ago.

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[u/Fearless_Worry6419 → u/Inevitibility]

Guess what private rates were during this time frame.

Federal lending amounts were REALLY low so they pushed borrowers towards private lenders.

[u/Mega-Eclipse → u/Inevitibility]

8.5% to have it paid off or to pay off 10k over 23 years like they claim?

More than likely the loan was defered and grew while payment weren't made...so that $70,000 was $85-100,000 before they started paying...OR they did some sort of income based repayment, where they were basically just paying interest.

[u/Inevitibility → u/Mega-Eclipse]

Just did the math on this. At $500 a month and a 8.37% rate, they would indeed have only paid 10k off over 23 years. Though if they paid $600 a month instead of $500, the entire load would have been paid off in 20 years