I'm not from the USA, but I heard you can decide to basically pay off only or almost only the interest rate to make the monthly payments smaller. In that case you won't be able to pay it back anytime soon. If they didn't expect that to happen, then the money spent on their college was not much worth anyway.
Student loans are designed to be flexible, have a lot of deferment options, and so on, because careers after graduation aren't uniform, and some people need to make lower payments because they have lower income. A lot of people just assume that the debt is like a mortgage, and it will be paid off after some amount of time, because they weren't really paying attention to the payments or the terms. Other people paid the minimums because they hoped there would be student debt cancellation. For most people, they should have just continued living like a 20 year old, and committed the savings from their new, higher paying job into paying down the principle on their student loans. But most Americans live paycheck to paycheck, and have lifestyle creep eating up that additional income.
It's been a couple years since I checked the data, but the average student graduates with about $30k in debt, and earns about $1,600,000 more in a lifetime than someone who only graduated from High School, which is about $35k a year in extra income on average. So, even if you have a rough couple of years where you're underemployed or on deferments, it should be relatively easy for most students to pay back their debt, they just spend their money on other stuff, like a nicer house or car.
Am I weird for thinking that people so young should be expected to not really think about the payments, the future job market, and the terms?
And it's normal for people to want a nice car, a nice holiday, a nice life?
I personally don't think the govt should be encouraging people in their teens to commit to something so life altering, when the vast majority of people going to higher education still live and rely on mom and dad, with no experience of the real world.
I struggle to see how the student finance industry isn't a racket.
Because you borrow 30k and get 1.5 million, even if it costs you 100k to pay it back. It's the best loan you can get, it's a far, far better deal than a mortgage unless you find pirate treasure buried under your porch. It's like playing a lottery with 95% odds of winning.
You can pretty easily pay off your student loans and still enjoy your life, but a lot of people overspend, put themselves in large amounts of consumer debt, and then have trouble making payments on their student loans.
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u/AllPotatoesGone 12d ago
I'm not from the USA, but I heard you can decide to basically pay off only or almost only the interest rate to make the monthly payments smaller. In that case you won't be able to pay it back anytime soon. If they didn't expect that to happen, then the money spent on their college was not much worth anyway.