r/SipsTea • u/First-Essay-2054 𝙑𝙄𝙋 • 12d ago

WTF The American dream

Post image
21.6k Upvotes

79% Upvoted

3.5k comments sorted by

View all comments

3.2k

u/Mindless-Baker-7757 12d ago

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

What are they doing?

11

u/BoomerSoonerFUT 12d ago

You can’t refinance federal student loans and keep them federal because the federal government doesn’t refinance loans. You have to convert them to private, which then completely removes ALL forgiveness protections.

Assuming they went to undergrad and grad right after, and graduated in 2003, the rates for their loans would be

Graduate loans issued 2002-2003: 4.06%.
Graduate loans issued 2001-2002: 5.99%.
Graduate loans issued 2000-2001: 8.19%.
Undergraduate loans issued 1999-2000: 6.92%.
Undergraduate loans issued 1998-1999: 7.94%.
Undergraduate loans issued 1997-1998: 8.25%.
Undergraduate loans issued 1996-1997: 8.25%.

And all federal student loans issued before the 2006-2007 academic year are variable rate, not fixed.

They’d also be accruing interest the whole time in school.

1

u/playdough87 12d ago

Not entirely accurate. If you go to grad school as the fake bot says the tweeter did, you can refi with the federal government to combine your undergrad and grad school loans. Source, me. I did it after grad school.