Student loan rates are truly too high
The political cartoon posted on the opinion on Saturday, Aug. 31, is so misleading. The implication is that the greatest problem with student debt is the ever-increasing tuition and fees. If it were, there would be far less frustration amongst graduates today.
The tuition and fees are a given. Students know what they are facing and they choose to commit to that. What is not expected is the horrendous and varying interest rates on student loans after graduation. A graduate can be paying close to $1,000 a month against his student loans and at the end of three and a half years see only a net decrease of $13,000 on his loans.
When I had a student loan in the 1970s, the interest was much lower than the rates for loans on homes and autos. I struggled to pay it off as my degree, as so many graduates experience, had not led to the gainful employment I had hoped. But I never felt that it was a losing battle.
A majority of today's student loans are classified as direct loans. Today's rules classify student loans as "unsecured loans" and thus allow the lenders to charge interest beyond other categories of loans. In 2018 the rate jumped from 3.4% to 6.8% overnight. When a graduate is finding their way and starting a new job, a curve ball like that is extremely discouraging. It seems the banking industry is bent on beating down one of the most valuable assets we have in this country - new college graduates. There must be a better way.