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> Student loans (which are much lower interest rate and nothing like these loans) Private student loans currently can be as high as 12.99% fixed: https://www.b

> Student loans (which are much lower interest rate and nothing like these loans) Private student loans currently can be as high as 12.99% fixed: https://www.bankrate.com/loans/student-loans/current-interest-rates/ https://www.bankrate.com/loans/student-loans/current-interes...

PragmaticPulp 5y ago
In which case, the person should refinance immediately and lower that rate significantly.
- alex_young 5y ago
  Just out of curiosity, do you known anyone with significant private student loan debt? I do, and from my experience their debts are not only extremely burdensome, but impossible to renegotiate.
  - ARandomerDude 5y ago
    When I went through it about 10 years ago, I took out an unsecured personal loan for 2.5% and used the cash to "pay off" my student loans. Then I just had a $500/mo payment until I was done with it. I was making about $35K per year but was careful to have excellent credit. It can be done.
  - PragmaticPulp 5y ago
    I've helped several people through it, yes. Renegotiating isn't the same as refinancing. You can see the refinance rates lower down on the page you linked above. The rates are significantly lower. Refinancing student loan debt is an extremely common scenario. It's not an impossible edge case. It would be difficult to do if the person had worked themselves into a situation where they have unreasonably high debt burdens (e.g. $200K+) but no career to speak of, so it's not a magic bullet.
    - jointpdf 5y ago
      > It would be difficult to do if the person had worked themselves into a situation where they have unreasonably high debt burdens (e.g. $200K+) but no career to speak of, so it's not a magic bullet. There is a way: income-driven repayment plans. There are several flavors, but you pay ~10% of (your_income - 1.5 x federal_poverty_wage). The poverty guideline depends on household size (info here: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...). Most loans are eligible. Any balance that is left after 20 years is forgiven. It’s a lot harder to default on these loans, and it’s the best way out for people with an insurmountable amount of debt. Actually, it’s probably the best repayment plan for most people, and there has been talk about making them the default plan. However, you may have to pay taxes in the forgiven amount. There are some edge cases where you could pay more over the life of the loan if your income increases dramatically, but it’s unlikely. More info: https://studentaid.gov/manage-loans/repayment/plans/income-driven https://studentaid.gov/manage-loans/repayment/plans/income-d...
      - rdtwo 5y ago
        Forgiven can be a real problem because the balance balloons and it could easily triple resulting in a huge tax burden. Once forgiven it becomes income and you get to pay taxes on the whole “gain”
throw_nbvc1234 5y ago
So have a combination of the federal and state government guarantee student an amount of public loans for the student to attend a public in-state school. The student also shouldn't be forced to take on private loans because their parents refused to pay their share; that's a problem for the government and parents to figure out, not for the student to be punished for. The estimated 2021 cost of attendance at the public school i graduated from are low enough that you should still be able to graduate with less then "6 figures debt" scenario that's tossed around, especially if you're working a part-time job throughout your education. If in-state schools are too expensive for federal govt to fund, then that's the state's problem to solve since that seems like a broken public college system. Kids should have a right to education, but if someone doesn't have the money or is getting a degree without prospect of sustainable financial return then they should be prevented from making the bad decision of going to a more expensive private university.

PragmaticPulp 5y ago

In which case, the person should refinance immediately and lower that rate significantly.

alex_young 5y ago
Just out of curiosity, do you known anyone with significant private student loan debt? I do, and from my experience their debts are not only extremely burdensome, but impossible to renegotiate.
- ARandomerDude 5y ago
  When I went through it about 10 years ago, I took out an unsecured personal loan for 2.5% and used the cash to "pay off" my student loans. Then I just had a $500/mo payment until I was done with it. I was making about $35K per year but was careful to have excellent credit. It can be done.
- PragmaticPulp 5y ago
  I've helped several people through it, yes. Renegotiating isn't the same as refinancing. You can see the refinance rates lower down on the page you linked above. The rates are significantly lower. Refinancing student loan debt is an extremely common scenario. It's not an impossible edge case. It would be difficult to do if the person had worked themselves into a situation where they have unreasonably high debt burdens (e.g. $200K+) but no career to speak of, so it's not a magic bullet.
  - jointpdf 5y ago
    > It would be difficult to do if the person had worked themselves into a situation where they have unreasonably high debt burdens (e.g. $200K+) but no career to speak of, so it's not a magic bullet. There is a way: income-driven repayment plans. There are several flavors, but you pay ~10% of (your_income - 1.5 x federal_poverty_wage). The poverty guideline depends on household size (info here: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...). Most loans are eligible. Any balance that is left after 20 years is forgiven. It’s a lot harder to default on these loans, and it’s the best way out for people with an insurmountable amount of debt. Actually, it’s probably the best repayment plan for most people, and there has been talk about making them the default plan. However, you may have to pay taxes in the forgiven amount. There are some edge cases where you could pay more over the life of the loan if your income increases dramatically, but it’s unlikely. More info: https://studentaid.gov/manage-loans/repayment/plans/income-driven https://studentaid.gov/manage-loans/repayment/plans/income-d...
    - rdtwo 5y ago
      Forgiven can be a real problem because the balance balloons and it could easily triple resulting in a huge tax burden. Once forgiven it becomes income and you get to pay taxes on the whole “gain”

throw_nbvc1234 5y ago

So have a combination of the federal and state government guarantee student an amount of public loans for the student to attend a public in-state school. The student also shouldn't be forced to take on private loans because their parents refused to pay their share; that's a problem for the government and parents to figure out, not for the student to be punished for. The estimated 2021 cost of attendance at the public school i graduated from are low enough that you should still be able to graduate with less then "6 figures debt" scenario that's tossed around, especially if you're working a part-time job throughout your education. If in-state schools are too expensive for federal govt to fund, then that's the state's problem to solve since that seems like a broken public college system. Kids should have a right to education, but if someone doesn't have the money or is getting a degree without prospect of sustainable financial return then they should be prevented from making the bad decision of going to a more expensive private university.