Well, but when were your friends doing this? Prices for intown apartments/houses are on the rise where I am, because of gentrification. Where at one point you could get a big old house, cheap, to rent, now those big old houses are being rennovated by upper middle class people, and driving up the costs of real estate in those neighborhoods. You really can’t compare when you went to school to now. Also, where you live is a factor as well. It might be cheap out in some college town, away from a big city, but if you are going to a big state school, that’s located in a large city, that’s likely not the case.
3 Likes
Well yes. The author claims to understand, but then considers the completely standard reality of very low principle:interest ratios when making minimum payments to be noteworthy in some way. It is just the way loans work.
I would be happy to take that deal, since it’s more money than I can make putting my money in a bank. Which brings me to some obvious points we’re all missing:
-
This guy that’s complaining, as has been pointed out, could do a LOT to help his situation. You’re not entitled to HBO, Christ!!!
-
Even so, that doesn’t somehow excuse greedy fuckers like loan companies to just take advantage of situations, especially when that situation is a student loan. When you’re in high school, what options are you seriously aware of when considering your future? Society pressures you to go to college, tells you you won’t get a job without a degree, then rapes you up the ass with these kinds of APR’s. You can’t just say “hey, that’s how math works” and wash your hands of the ethical implications. There’s no reason we can’t, as a society, offer truly low interest loans, not to mention lower tuition fees by firing all the useless VP’s and admin people that were birthed over the last 20 years.
3 Likes
Wow. You’ve never understood people who want lower interest rates on their loans? What is this “interest rate clock” of which you speak? Not a concept I’ve heard of. You likely don’t want to hear it, but you’re the type of customer banks love, because you pay them more than you have to. There is obviously no requirement to step back out to your original term, nor to a longer term than your current remaining term when refinancing. If you can get a lower rate, you could consider that you have 2 choices. Same payments and you’ll be done sooner (saving $$), or lower payments and be done at the same time as before refinancing (also saving $$).
Your colleagues that take advantage of the lower-interest refinancing opportunity to extend their terms and lower their monthly payments are simply taking advantage of a low cost of money that the equity in their home gives them access to. Presumably this is in order to have a live-now pay (more) later lifestyle. Nothing wrong with that either. It’s how the system works. But yes, they’ll have mortgages for longer than you will. But nice toys.
Once you have your loans assembled into a portfolio, I will buy out the lot of them and give you a really good lump sum.
2 Likes
This guy has every right to be upset. His anger, however, is directed at the wrong target. As most of the commenters have pointed out, the terms of his loan aren’t that outrageous. What’s outrageous is that a 4 year degree at the University of Minnesota-Mankato cost him over $80,000. That’s a second tier state school in an upper midwest state. I went to Texas A&M University in the early 90s, and the total cost of my education was less than $25,000. I’m guessing an education at Minnesota-Mankato back then was considerably less than that. I think it’s pretty safe to say that the cost of higher education in the US has increased more than fourfold in the last 25 years. Inflation doesn’t come anywhere close to explaining that. So this guy should be mad. He should be really, really mad. Just not at the people who lent him money.
13 Likes
If you can, making an extra monthly payment (or two!) a year can really help- because those payments go entirely into paying the principal off. It can hurt, but the amount you save on interest in doing so can be substantial.
That’s assuming a person is capable of swinging extra payments (which is in no way a given).
I for one don’t think it’s remotely tenable. Human nature is simply too greedy, so either you need an authoritarian regime to keep everybody in line or eventually the communal/cooperative ownership model will fall apart as people either leave for better options (if it’s truly voluntary) or become mired in corruption and infighting (if there aren’t better options available).
There are nongovernmental examples of cooperative living. Take the Israeli kibbutz movement, for example, which after a couple of generations of true communistic success has all but collapsed as younger people have moved away to make their fortunes elsewhere.
1 Like
I think the issue is that the author himself spotted six or seven or eight ways to make life easier on himself, and then was like “but fuck that, I gotta watch GoT”. The thing sounds almost like an Onion article: “Area man discovers compound interest, disapproves”
You’re in a somewhat different situation, in that you’re working as well as taking loans. Overall, you seem more aware of what you’re getting yourself into, and perhaps most importantly, you don’t seem to be posting rants about how unfair it is to pay back the interest on the loans you’ve taken out (that I know of).
1 Like
The kibbutzim make a great example and I’m embarrassed I didn’t think of it myself.
On the other hand, Amish communities have been growing and growing in number in recent decades. I’m not sure if it’s fair to characterize their way of life as communistic, though, given the emphasis on self-reliance, thrift, etc. in that community, and the fact that as far as I know they make their own houses. Not sure how they handle land ownership, inheritance, however…seems worth a little more research, though.
I think what it shows is that people need to stop thinking in all these stupid terms: communism, socialism, libertarianism… and just accept that they all have a lot in common if the goal is to create a better society, both for better and for worse. The Amish aren’t communists, but they think communally. They’re not libertarians, but they’re firm believers in their personal liberty to live life how they want to. Mostly, they’re pragmatists- whatever works, is really their motto, which is why some sects drive tractors while others stick to horses and buggies.
2 Likes
For state schools the increase in tuition over the last 30 years is mostly explained by reduced state subsidization.
Combine that with the fact that the income distribution has shifted such that the median family income is $50k instead of the $90k it would be if the income distribution was the same as 1970 and the vast majority have a much harder time affording higher education.
On the other time the super rich can buy more car elevators and pay less property tax on them.
10 Likes
Great points! I tend to agree that words like “communism”, etc. are just signposts pointing vaguely in the direction I’m trying to indicate, but it’s easy to forget that and start quibbling about the terminology instead of the thing being referred to.
Dude… that’s totally not how mortgages work. In fact, that makes no sense at all. The key word to google here is ‘curtailment’.
No argument whatsoever that student loan-makers are greedy fuckers, and worse, greedy fuckers protected by insane regulations. Fuck (most of) 'em. I just meant that in a better-managed system of paying for education, he’d still have to pay compound interest–just on a much lower interest rate.
Dropping out of college was the best financial decision I ever made.
But I might still default! Better buy insurance against that! I recommend getting it from Xitoimes Inc. I’m on their board, but there’s no conflict of interest.
1 Like
The Amish may not have authoritarian bureaucracy, but I’d say that fear of God (and, for those who lose faith, fear of excommunication) is a form of authoritarianism.
Not to mention that their economic model isn’t one that most of us would choose. There’s a romantic appeal to subsistence living, but I feel my life is far more enhanced than hurt by my access to things like cheap electricity and higher education, things that are made possible in large part by “evil” institutions like debt and corporate personhood.
2 Likes
The thing is, he isn’t even willing to cut HBO or WWE. His willingness to sacrifice or put in some effort is, by his own statements, close to zero. He’s no poster child for the evils of student loans.
3 Likes
In fact if you’d just cut your rate by 0.80% 5 years after getting your mortgage you’d have knocked off nearly 5 years of payments, and you’d be debt free today.
1 Like
