It’s not helpful to calculate APY that way. After all, if they had made the maximum repayment period 50 years instead of 5 years that would result in a lower AP

It’s not helpful to calculate APY that way. After all, if they had made the maximum repayment period 50 years instead of 5 years that would result in a lower APY according to your calculation. In reality the APY will be heavily dependent and on your income (as a high income will result in repayment period less than 5 years, while a low income will result in only partial repayment by the end of the 5 years).