The student loan interest is where I think the federal government is trying to make money off of young people. Good informative video. I enjoyed it. Explains everything very well. I think your channel deserves more subcribers. One of my main finance channels I look to for information.
I appreciate that Mike! I would agree that it's certainly interesting how the government is collecting interest on student loans as part of its income. But on the bright side, the student loans offered by the federal government typically seem to be at a low, fixed interest rate that's offered to every student who qualifies. The alternative would be private lenders which can charge much more obviously. While those low interest rates on federal student loans are definitely attractive, part of the reason students have to borrow so much has to do with the inability to discharge student loans in bankruptcy. I really think colleges and universities have taken advantage of that and raised tuitions pretty aggressively over the past few decades. Just thinking out loud here - it's a great conversation to be had!
@@PracticalPersonalFinance Yeah, I agree with everything you're saying. I heard before that when you went to college a long time ago you could work part time during the school year and work full time during the summer and not have to borrow anything. I look and wonder why things like personal computers and televisions keep getting cheaper and cheaper over time and why college prices can't do the same or at least stay the same over time. I think it makes health care costs a lot higher too which is bad but I think the high cost of health care has a lot more to do with it than that. I also think housing cost too much too. I live close to Ironton, Ohio and Ohio University Southern there used to be at the Ironton High school but now they have 4 good sized buildings in Ironton but I know the university is a lot bigger now. I think students just want an education and not all these fancy things. If a college has a gym just the students that want to use it should pay for it not anyone that goes to college there. Yeah, even though intersest rates for student loans are low you can't discharge them in bankruptcy. The US treats student loan debt completely different than any other type of debt. You can discharge your medical debt in bankruptcy. Your gambling debt and credit card debt. But you can't with student loans. I heard someone say in a video about that on RUclips that that makes absolutely no sense. I like a lot of the videos on your channel a lot and learn a lot from watching them like this video. I thought it was a good video when I first watched it. I wish the college's didn't have to charge so much money to go to school at them. And that makes health care costs so much higher as well.
@Ronald Reagan They let you take out student loans to pay for things like room and board ( rent ), transportation expenses, books, personal computers, and other things though. You should only take them out if you're going to pay them back and you should try your best to pay them back. I don't think colleges should have started charging a lot more money just because of student loans. Things like personal computers and televisions the prices for them goes down over time, the price for college should at least stay the same if not go down over time. You used to be able to go to college and work full time during the summer and part time during the school year and not have to borrow anything. I don't see why that should be any different now and why student loans should have any affect on that. Student loans existing doesn't have anything to do with how much it costs a college to educate you and give you a degree. It shouldn't matter. The Republicans tax cuts for the wealthy is a big reason for the national debt too, it even says that online. I don't know much about all this but I notice how George W. Bush was president for 8 years right before the 2008 recession and he happens to be a Republican. A Democrat wasn't president for 8 years before the 2008 recession, a Republican was.
@Ronald Reagan yeah. I only owe so much in student loans. And the interest rate on them isn't all that high and it's fixed. The amount it goes up is less than $500 a year so all I have to pay is $500 a year and my balance doesn't go up any. That's not that much to me. So yeah. I don't spend as much money as other people on different things anyway. Like in all the movies and TV shows ive seen where people are in Florida Ive always thought Ive never had any desire to go to Florida. I actually haven't done much traveling at all. I don't have cable or satellite and don't care. I always just watch antenna network tv. You can get a lot of good channels that way really. At least I think so.
It's funny because the example in the video is exactly what I'm dealing with right now! $900 of interest every year! All I want to do is get rid of this debt as soon as possible. It gives me so much anxiety that the banks are making so much money off of me, nearly a thousand a year! This video really encouraged me. I'm definitely going to be debt free one day!
I calculated all 16 of of my loans together and got $199.05 / Month. That's a ~58k loan all at different fixed rates ranging from 2.75% to 6.8%. What I don't understand is how people get interest rates to get out of hand. How do people pay student loans for 10+ years and only pay off interest + barely touching principle? $200/month seems like a super easy barrier to cross in order to touch the principle. When it gets to 100k+, is when it looks the scariest. Also, doesn't the interest get better by the day once we touch the principle? Like that $20,000 example is like that if the principle was never touched right? So interest gets lower the more you pay off principle?
The student loan interest is where I think the federal government is trying to make money off of young people. Good informative video. I enjoyed it. Explains everything very well. I think your channel deserves more subcribers. One of my main finance channels I look to for information.
I appreciate that Mike! I would agree that it's certainly interesting how the government is collecting interest on student loans as part of its income. But on the bright side, the student loans offered by the federal government typically seem to be at a low, fixed interest rate that's offered to every student who qualifies. The alternative would be private lenders which can charge much more obviously. While those low interest rates on federal student loans are definitely attractive, part of the reason students have to borrow so much has to do with the inability to discharge student loans in bankruptcy. I really think colleges and universities have taken advantage of that and raised tuitions pretty aggressively over the past few decades. Just thinking out loud here - it's a great conversation to be had!
@@PracticalPersonalFinance Yeah, I agree with everything you're saying. I heard before that when you went to college a long time ago you could work part time during the school year and work full time during the summer and not have to borrow anything. I look and wonder why things like personal computers and televisions keep getting cheaper and cheaper over time and why college prices can't do the same or at least stay the same over time. I think it makes health care costs a lot higher too which is bad but I think the high cost of health care has a lot more to do with it than that. I also think housing cost too much too. I live close to Ironton, Ohio and Ohio University Southern there used to be at the Ironton High school but now they have 4 good sized buildings in Ironton but I know the university is a lot bigger now. I think students just want an education and not all these fancy things. If a college has a gym just the students that want to use it should pay for it not anyone that goes to college there. Yeah, even though intersest rates for student loans are low you can't discharge them in bankruptcy. The US treats student loan debt completely different than any other type of debt. You can discharge your medical debt in bankruptcy. Your gambling debt and credit card debt. But you can't with student loans. I heard someone say in a video about that on RUclips that that makes absolutely no sense. I like a lot of the videos on your channel a lot and learn a lot from watching them like this video. I thought it was a good video when I first watched it. I wish the college's didn't have to charge so much money to go to school at them. And that makes health care costs so much higher as well.
@Ronald Reagan They let you take out student loans to pay for things like room and board ( rent ), transportation expenses, books, personal computers, and other things though. You should only take them out if you're going to pay them back and you should try your best to pay them back. I don't think colleges should have started charging a lot more money just because of student loans. Things like personal computers and televisions the prices for them goes down over time, the price for college should at least stay the same if not go down over time. You used to be able to go to college and work full time during the summer and part time during the school year and not have to borrow anything. I don't see why that should be any different now and why student loans should have any affect on that. Student loans existing doesn't have anything to do with how much it costs a college to educate you and give you a degree. It shouldn't matter. The Republicans tax cuts for the wealthy is a big reason for the national debt too, it even says that online. I don't know much about all this but I notice how George W. Bush was president for 8 years right before the 2008 recession and he happens to be a Republican. A Democrat wasn't president for 8
years before the 2008 recession, a Republican was.
@Ronald Reagan yeah. I only owe so much in student loans. And the interest rate on them isn't all that high and it's fixed. The amount it goes up is less than $500 a year so all I have to pay is $500 a year and my balance doesn't go up any. That's not that much to me. So yeah. I don't spend as much money as other people on different things anyway. Like in all the movies and TV shows ive seen where people are in Florida Ive always thought Ive never had any desire to go to Florida. I actually haven't done much traveling at all. I don't have cable or satellite and don't care. I always just watch antenna network tv. You can get a lot of good channels that way really. At least I think so.
@@PracticalPersonalFinancethe government? You still don't understand who profits.
It's funny because the example in the video is exactly what I'm dealing with right now! $900 of interest every year! All I want to do is get rid of this debt as soon as possible. It gives me so much anxiety that the banks are making so much money off of me, nearly a thousand a year! This video really encouraged me. I'm definitely going to be debt free one day!
I calculated all 16 of of my loans together and got $199.05 / Month.
That's a ~58k loan all at different fixed rates ranging from 2.75% to 6.8%.
What I don't understand is how people get interest rates to get out of hand. How do people pay student loans for 10+ years and only pay off interest + barely touching principle? $200/month seems like a super easy barrier to cross in order to touch the principle. When it gets to 100k+, is when it looks the scariest.
Also, doesn't the interest get better by the day once we touch the principle? Like that $20,000 example is like that if the principle was never touched right? So interest gets lower the more you pay off principle?
Thanks again for the information I was surprised how unhelpful google was on the interest loan calculation
If only a large coffee from Starbucks was still $2.47...
This is very disappointing. 7% of my payment goes towards the actual loan and 93% goes towards accrued interest. WTF.
Ok