patogordo wrote:nucky thompson wrote:Summerz wrote:I was looking at home interest rates and that are (give or take) @3.5%. So, why are our student loans 6.5%? For the good of the national economy the gov’t wants us all to buy homes, but they also want a smarter nation, so why are interest rates higher for (education) us? Given that we cannot bankrupt our loans, why are we not receiving better treatment?
For someone with $150K in loans the difference (10 year plan) is $26K, est. $220 a month.
debt owing on a house is typically secured by the house. this is called a mortgage. when debt is secured, the creditor is exposed to less risk. less risk equals lower interest rate. tuition creditors cannot foreclose on your diploma to recoup debt owed after default. therefore, higher interest rate.
this is dumb. there are no tuition creditors. the lender is the federal government. the federal government has tremendous power to recoup debt owed -- you can't discharge it in bankruptcy, they can garnish wages, withhold your tax refund, etc etc. there is absolutely no reason the gov't should be charging such a high interest rate on student loans.
the government lends money for tuition, yet they are not a tuition creditor?