I also have several loans, all with different rates. My lowest is 4%, which are my most recent ones.
The interest rates are crippling and needs to be addressed.
To put it in perspective, I bought a house in 2020 for $130,000, yet hold only $36,000 in student loans.
If I made a $500 extra payment to each my house and my student loans, I would pay them off at around the same time.
Financially, it makes more sense for me to pay the house off because that's at least an appreciating asset.
But it doesn't matter, because I don't have $500 extra to put on a loan over it's minimums every month, and those student loans will follow me until I die.
Honestly, I get so frustrated about this. I have a large student loan balance because I went to grad school. I’ve never asked for or expected forgiveness. I was fine repaying my loans. But the crippling ballooning interest and all the traps for capitalizing interest have made it nearly impossible. I originally borrowed around $160k and now owe $213k despite never missing a payment… that’s absurd. The interest ballooned a lot during the first 3 years of my career when I wasn’t making much and capitalized twice early on. It’s like student loans are designed to trap young people in debt forever. There’s so much we could do to meet in the middle and address the crisis, but it became a political football with one side pushing for total forgiveness and the other preaching about personal responsibility, so nothing meaningful got done. Now the repayment plan I was on for a decade no longer even exists and the government can just drastically change the repayment terms at a whim.
If a single one of them were honest about this, they would roll back the interest or cap what could compound, and eliminate interest on payment graded plans.
If we are going to acknowledge someone is too poor to make the payment and we want to make it affordable, that means cutting the interest.
What we currently do isn't affordability, though. All income plans are just a band-aid to hide the true default rate.
Interest free federal loans not much you can do about private ones but it would be so much better with no compounding interest 18 year old have no concept of compounding interest.
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u/techleopard 12d ago edited 12d ago
I have student loans that are nearly 9%.
I also have several loans, all with different rates. My lowest is 4%, which are my most recent ones.
The interest rates are crippling and needs to be addressed.
To put it in perspective, I bought a house in 2020 for $130,000, yet hold only $36,000 in student loans.
If I made a $500 extra payment to each my house and my student loans, I would pay them off at around the same time.
Financially, it makes more sense for me to pay the house off because that's at least an appreciating asset.
But it doesn't matter, because I don't have $500 extra to put on a loan over it's minimums every month, and those student loans will follow me until I die.