4 ms·

Can they instead reduce the interest rate?

• zeroonetwothree 3y ago
  The national emergency is over now so they actually can't make changes anymore.
• theodpHN 3y ago
  Earlier this month, the NY Times warned students and their families to "Expect Interest Rates on Federal Student Loans to Rise" to as high as 8.05% for new PLUS loans this fall. That news came as Apple, just days after a recent $90 billion share buyback, filed a prospectus with the SEC for a new $5 billion bond program with longer-term bonds expected to have a coupon rate of approximately 5%. The imbalance between loan rates for students and Apple shareholders was actually far more pronounced before the Fed fund rate hikes started last year in response to inflation. During the pandemic, Apple -- which reported around $166.3 billion in cash and investments on its balance sheet as of March 31 -- held a bond sale worth $14 billion for stock buybacks and dividends to benefit from borrowing rates as low as 0.70%. Direct PLUS student loan rates at that time were down to 5.30% for new loans but as high as 8.5% for existing loans (the U.S. Dept. of Education does not offer refinancing of its up-to-30-year fixed rate loans in times of much lower interest rates). Unlike the tax-deductible interest Apple pays, annual deductions on student loan interest are capped by the IRS at $2,500 (or lower, depending on the borrower's income). https://news.slashdot.org/story/23/05/30/2132241/student-loan-payment-pause-gone-under-debt-ceiling-deal https://news.slashdot.org/story/23/05/30/2132241/student-loa...
  • falcolas 3y ago
    8.05% Jesus. That's high. For a $100k loan (not unusual for high paying degrees), you'd need to shell out over $650 a month just to break even with interest.