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.
Why make it illegal? Why not offer only federal loans?
How about:
20 year loan, 4.125% fixed rate 30 year loan, 4.375% fixed rate
No early repayment penalties and maybe interest returned incentives for full repayment return before term at certain benchmarks.
The average debt for a 4-year Bachelor’s degree is $34,700. At the end of 20 years the total repayment amount would be $36,131.375, 30 years would be $36,218.125.
Looks good to me.
Why not make it free? At the end of the education cycle the student will get a job and start paying taxes. Isn’t that what society needs? Having educated people to do various jobs. Why putting that behind a crazy paywall?
I’d be in favor of that too. My point was to highlight that it’s not the loans themselves that are the problem.
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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.