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Americans, how would you feel about making student loans completely illegal? (lemmy.world)

submitted 1 year ago by nodsocket@lemmy.world to c/asklemmy@lemmy.ml

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This would save young Americans from going into crippling debt, but it would also make a university degree completely unaffordable for most. However, in the age of the Internet, that doesn't mean they couldn't get an education.

Consider the long term impact of this. There are a lot of different ways such a situation could go, for better and for worse.

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[–] yanyuan@lemmy.world 4 points 1 year ago (1 children)

Maybe my understanding of the wording is wrong, but I think you assume a total return of investment of 4.125% and 4.375%. Hence, your total payments correspond to fixed rates of less than 0.5% per year.

For a fixed rate of 4.125% (per year), I calculate a total repayment of $51,016.80, over 20 years.

[–] LilB0kChoy@lemm.ee 2 points 1 year ago

Sorry, I wasn’t clear. Those aren’t APRs, they are the fixed loan rates. Whatever amount is borrowed is repaid plus 4.125% or 4.375% interest depending on the term selected.

It’s like a reverse bond. The government has established that those rates are a fair return on money they “borrow” from citizens in bonds, it seems fair to give the same terms in the other direction.