2 ms·
They may not seem that large, but I suspect that compounding interest effects and the fact that the debt is there very early in peoples lifetimes make them very
by dv_dt 10y ago
They may not seem that large, but I suspect that compounding interest effects and the fact that the debt is there very early in peoples lifetimes make them very heavily weighted in terms of the effects on lives and economies.
- maxerickson 10y agoThe interest compounding on a $30,000-40,000 loan wouldn't really be a student loan issue, it would be a job issue. The interest on the loan sizes I've mentioned is typically going to be less than $4000 a year, so if they pay $6000 a year the loan will go away quite quickly. That's a substantial amount of after tax income for a lot of jobs, but students should be looking at the debt in those sort of terms, that it is going to be one of their main payments for a while.
- dv_dt 10y agoNot the interest of the student loan, the 'interest' of the opportunity cost of paying $4000-$6000 year instead of some other use (eg personal or retirement savings, or saving for a house). There is a huge forward cost in their financial quality of life because of these early debt payments.