Student Loan Interest Reduction
Student loans, regardless of private or governmental, should be limited on the interest it charges to students. Student loans bear interest at rates from 4% (which many do not qualify for) to 14%. In other words, for an individual who makes the leap to get an education, and help better our world, the government and these companies decide it is a good idea to make a profit from their decision. It is understood that these loans must bear some interest. I am not advocating the removal of student loan debt, nor the complete removal of interest. Instead, I am petitioning that interest bearing student loans should be capped at a rate of 3% in order to ensure students can pay their loans with some hope that those loans will be paid off some day.
There is a student I know personally who has student loans totaling to over $400,000.00. His interest rate is at over 6%. Since finishing law school and passing the bar, his income was at $50,000.00/ year. How is a person like him supposed to pay these student loans back? It is a hopeless situation for him, and many people like him. So what do they do? Much of the time, they give up. They feel that no matter what they do, there is no possible way to pay off their debt. Coupled with the substantial increase in living expenses, such as: groceries, rent/mortgage, gasoline, utilities, etc. it is virtually impossible to LIVE while trying to manage paying off such student loans.
By reducing the amount of interest charged on student loans, the government and many private student loan companies would benefit from students who are able to take control of their debts while not stopping their livelihood. I believe a 3% student loan cap will benefit all students and lenders alike.
It is true that private lending companies will not find providing such loans to be a viable business option with this type of decrease in profit. But, they will make up their losses by students being more willing to pay back their loans.
There is more I could touch on the issue, but I believe this subject has been discussed substantially by many people throughout the years. It is clear that the student loan debt crisis is a real issue in America. Reducing the interest in student loans will be a giant step towards resolving this crisis once and for all.
There is a student I know personally who has student loans totaling to over $400,000.00. His interest rate is at over 6%. Since finishing law school and passing the bar, his income was at $50,000.00/ year. How is a person like him supposed to pay these student loans back? It is a hopeless situation for him, and many people like him. So what do they do? Much of the time, they give up. They feel that no matter what they do, there is no possible way to pay off their debt. Coupled with the substantial increase in living expenses, such as: groceries, rent/mortgage, gasoline, utilities, etc. it is virtually impossible to LIVE while trying to manage paying off such student loans.
By reducing the amount of interest charged on student loans, the government and many private student loan companies would benefit from students who are able to take control of their debts while not stopping their livelihood. I believe a 3% student loan cap will benefit all students and lenders alike.
It is true that private lending companies will not find providing such loans to be a viable business option with this type of decrease in profit. But, they will make up their losses by students being more willing to pay back their loans.
There is more I could touch on the issue, but I believe this subject has been discussed substantially by many people throughout the years. It is clear that the student loan debt crisis is a real issue in America. Reducing the interest in student loans will be a giant step towards resolving this crisis once and for all.
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