Reply to Canceling $10k of student loan debt is stupid.

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[quote=Anonymous][quote=Anonymous]I do not think they should cancel the loans.

Our loans were 6.5% interest and they also front load the interest and structure it so that you don't pay anything towards the principal in the beginning and the principal starts ballooning.

I would suggest that we offer lower interest loans for certain majors and careers. Nursing, teaching, engineering, etc. Generic liberal arts majors- no. (And I was a liberal arts major). I also think they should be structured differently with the interest throughout the loan instead of front loaded. Front loading the interest on a mortgage is different because they assume you'll sell within 7 years. But with student loans, you can't discharge. We also weren't able to consolidate and lower the interest rate.[/quote]

This is why they need to teach personal finance 101 as a required course in college across all institutions in order for students to graduate.  It's called amortization.

The reason you get an amortized loan for everything from a mortgage, to an auto loan, to a student loan is because it allows the borrower to have a fixed payment over the course of the entire loan.  An unamortized loan requires balloon payments that could really mess people up.

Truly shocking people can leave university with their $250k degrees and not even know about the basic concept of an amortized loan. What the hell do they teach these days at university?  Apparently a bunch of useless stuff.[/quote]

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