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Are student loans actually debt instruments any more? They seem to resemble a tax. First off you can't default on them. The companies providing them are guara
by r4vik 14y ago
Are student loans actually debt instruments any more?
They seem to resemble a tax.
First off you can't default on them. The companies providing them are guaranteed by the government and have obligations to lent to pretty much anyone.
You can defer paying them back if you don't have a job or you're not earning enough.
Finally, they can't be inherited by your estate.
So if you never actually manage to pay them off they're effectively a graduate tax.
- Flimm 14y agoWhat tax would charge you $1400 a month if you're earning less than that? I'm very unfamiliar with the American system for student loans, but your comment sounds very different to the examples the article provided.
- r4vik 14y agoThey don't charge you $1400 a month if you're earning less than that, you can defer. Your interest gets added to your principal in that circumstance. If you model a tax as an infinitely large debt, this scenario makes the loan resemble a tax more.
- Evbn 14y agoWhen you buy milk from the store, do you pay a dairy tax? It isn't a tax to enforce payback of borrowed funds. And taxes can be defaulted or negotiatied downward, says the lawyer in the ad on the TV.