Reply to Why is Biden extending the student loan repayment pause?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I will say I believe the conundrum many of us are in, that we can't refinance at a lower rate because we don't want to lose potential forgiveness, but are stuck paying exceedingly high interest rates, could do for a fix.

I could see a policy that all holders of federal loans are brought down to an interest rate of something like 2%, but don't get forgiveness. That might be a decent compromise. I'm still sitting at almost 7% on my loans and just paying interest plus a small amount of principal.[/quote]

It isnt just the rate, its daily compounding. For a 10k loan the daily compounding interest is 0.75 per day. And it compounds off the daily balance so it compounds on 10,000.75 the next day...etc so add 4 years of daily compounding interest plus 6 months after graduation. This is not how car loans and mortgages compound.
No one should be paying 1k per month on student loans on 80k they took out that turned into 100k+ total by graduation and etc etc. You can pay 80k after 10 years (1k x12 x 7 years), have paid the principal amount borrowed and then 80k still left- that keeps daily compounding. [/quote]

Those are the terms you agreed to. And this is only true for the private loans btw. But if you didn’t like the terms, the time to say so was before you took and spent all the money, not after.[/quote]

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