Author Topic: Student Loan Math Complainy-Pants  (Read 5863 times)

Rage

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Student Loan Math Complainy-Pants
« on: October 26, 2015, 02:01:08 PM »
This:
http://www.startribune.com/student-loans-interest-rates-keep-borrowers-in-the-hole/336437521/

He paid $6000 towards his $83K in college loans and the principal only went down by $700 (works out to 6.4% interest rate, I think).  Which is a bummer.

I actually agree with the author that in-state college education shouldn't put you that far in the hole (even with deferments).  And to some extent I agree that it's a game that's rigged in the favor of banks and other rent-takers. 

But good lord, it's just fucking math, man.  You have to pay more than the interest if you want the principal to go down.

And this bullshit:
Quote
Could I afford a little higher payment if I cut out some social outings, canceled next summerís travel plans, and scratched my monthly subscriptions to HBO and the WWE Network? Yeah, probably. But I enjoy those things, and I donít want to sacrifice the quality of life that I enjoy today just so I can pay my loans off by the time Iím 48 as opposed to 52.

Why the hell do you have HBO and WWE if you owe $83K??!!  I bet the 48 year old you will wish you weren't such an asshole to yourself.  He seems convinced that he can only enjoy life by spending lots of money.

MgoSam

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Re: Student Loan Math Complainy-Pants
« Reply #1 on: October 26, 2015, 02:08:35 PM »
Yeah, the person has some legitimate concerns, but seriously I have a mortgage and expenses and want to invest in early retirement, so guess what, I cut out a lot of social outings. It's called being responsible.

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Re: Student Loan Math Complainy-Pants
« Reply #2 on: October 26, 2015, 02:29:31 PM »
The evidence suggests that this very expensive education contained no actual math courses. Of course a big loan at an interest rate of over 6 percent is going to have front-loaded interest.
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nereo

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Re: Student Loan Math Complainy-Pants
« Reply #3 on: October 26, 2015, 02:32:42 PM »
granted the author is a social studies teacher and not a math teacher... but I'm simply blown away that he seems surprised by this.

I've known since before I ever applied for college that most of the initial payments would go towards interest.  Examples of payoff schedules and loan balances are actually required literature when taking out a student loan, which the OP probably tossed into the trash.
Every online student loan lender will show you the amount of principle and accrued interest at the click of a button.

jeez man... get a clue!

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RFAAOATB

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Re: Student Loan Math Complainy-Pants
« Reply #4 on: October 26, 2015, 03:08:57 PM »
You can't call yourself middle class with loans like that, can you?  I mean I'm middle class and had my college paid for with a grant from the Bank of Mom and Dad. I barely have a concrete idea of what student loans are.

Agreed dude should suck it up and pay off more than the minimum.  I would love to sign up for WWE Network.  Unfortunately I love money more.

Abe

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Re: Student Loan Math Complainy-Pants
« Reply #5 on: October 26, 2015, 03:34:59 PM »
Total cost for 4 years (including room & board, excluding any financial aid) is $70k. It's unclear what his unique circumstances were, but looks like the interest grew at 6% for 3 years without any payments to get to $83k. 3 years is a long time to not pay anything on a loan. Also, offering a loan to someone isn't a crime. It's called business. It's a crime that his parents didn't have the sense to warn him about an expensive education and going into a poorly-paying field. There should be some kind of big warning that guidance counselors hand out, preferably with a compound interest graph.


nereo

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Re: Student Loan Math Complainy-Pants
« Reply #6 on: October 26, 2015, 03:52:50 PM »
Total cost for 4 years (including room & board, excluding any financial aid) is $70k. It's unclear what his unique circumstances were, but looks like the interest grew at 6% for 3 years without any payments to get to $83k. 3 years is a long time to not pay anything on a loan. Also, offering a loan to someone isn't a crime. It's called business. It's a crime that his parents didn't have the sense to warn him about an expensive education and going into a poorly-paying field. There should be some kind of big warning that guidance counselors hand out, preferably with a compound interest graph.
But that's just it... There are such warnings and information.  It's built into the student loan process.
Here's an example mhttp://studentaid.psu.edu/types-of-aid/loans/stafford/repayment

They give you a handy calculator you can use with your OWN information or with any information you choose.

every year you get a statement showing what your monthly payment will be once you graduate.  They are even required to state how much interest you will pay under various repayment options.  The mailing they sent me looked a lot like this.

Asking for a reduction in payment like the author did?  They are required to send you a new mailing showing what your payments and interest will be.  It's also available online.

As loan options go - student loans are the most forthcoming and obvious about what you are being charged and what you will pay.  The problem is that people just don't bother to read some very, very simple statements.
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Re: Student Loan Math Complainy-Pants
« Reply #7 on: October 26, 2015, 04:18:37 PM »
I believe you that students (and their parents) don't read the loan information.

I read all the home and car purchase contracts before I sign them.  The employees are always amazed.  Most have never seen anyone actually read the contract before.


nereo

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Re: Student Loan Math Complainy-Pants
« Reply #8 on: October 26, 2015, 06:37:21 PM »
I believe you that students (and their parents) don't read the loan information.

I read all the home and car purchase contracts before I sign them.  The employees are always amazed.  Most have never seen anyone actually read the contract before.
lol, I had a similar experience.  Many years ago I bought a car on a special 0.9% financing for 12 months (paid it off before 12 months ended).  The girl handed me the ~4 page contract and said I could read it over so I did.  It took me about 15 minutes.  Three times the salesman poked his head in asking what was taking so long...  they seemed shocked that I'd want to read all the information before giving them several thousand dollars.
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Tjat

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Re: Student Loan Math Complainy-Pants
« Reply #9 on: October 26, 2015, 07:34:20 PM »
Too many people think amortization is a scary word when it's an incredibly simple concept. Use any means you'd like to calculate the payments for your loan. Multiply your interest rate by your total balance --> This is your interest payment. Subtract from your total payment --> This amount goes to principle. Repeat each payment period...

Math aside, is anyone else extremely uncomfortable whenever with a group of friends and everyone is complaining about their student loan payments. Over half my friends will be making payments into their mid-40s, yet as soon as kid #2 popped out, it was off to finance a minivan....

meg_shannon

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Re: Student Loan Math Complainy-Pants
« Reply #10 on: October 27, 2015, 01:44:27 AM »
My best friend did this. Tons of student loans, 2 young kids, and 2 leased vehicles (including a new cross over because the paid off sedan wasn't 'big enough'). We have a lot in common, so I try to support her with listening to her financial issues, but it's harder every year. When we met, we were in a similar financial position, but my husband and I have paid debts off, drove old paid off cars (right now we don't own one at all - or lease one), and kept our child's expenses down - 1 year of preschool vs. 3 years, free classes/parks vs. paid classes, etc. So now we're pulling ahead financially, even though they make about 30-40K more per year.

Jack

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Re: Student Loan Math Complainy-Pants
« Reply #11 on: October 27, 2015, 10:41:40 AM »
Over half my friends will be making payments into their mid-40s, yet as soon as kid #2 popped out, it was off to finance a minivan....

Well, there's their problem! They apparently think 2 + 2 = 7 [minivan seats]! If they can't do basic arithmetic, how could we possibly expect them to understand compound interest?

YoungGranny

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Re: Student Loan Math Complainy-Pants
« Reply #12 on: October 27, 2015, 10:47:26 AM »
By my quick calculation the loans are going to take another 33 years to get paid off IF he cut out a few things and came up with an extra $50 a month that would save 8 YEARS not just 4. (But then again, I can't expect them to figure out a payoff schedule if they don't even understand interest in the first place).

 Realistically he could probably trim at least $200 from his monthly budget which would save another 10 years. Being out of debt 18 years faster certainly seems better than watching HBO/WWE but what do I know...

Abe

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Re: Student Loan Math Complainy-Pants
« Reply #13 on: October 27, 2015, 04:18:50 PM »
Those student loan forms are about as straight-forward as one can make them. I don't have a good explanation for why so many people are surprised about student loan debt, other than carelessness. That, and over-confidence in their ability to get a high-paying job.

JZinCO

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Re: Student Loan Math Complainy-Pants
« Reply #14 on: October 27, 2015, 04:35:31 PM »
By my quick calculation the loans are going to take another 33 years to get paid off IF he cut out a few things and came up with an extra $50 a month that would save 8 YEARS not just 4. (But then again, I can't expect them to figure out a payoff schedule if they don't even understand interest in the first place).

 Realistically he could probably trim at least $200 from his monthly budget which would save another 10 years. Being out of debt 18 years faster certainly seems better than watching HBO/WWE but what do I know...
One could do even better than that by scheduling extra payments to be applied to principal only, correct?
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Sofa King

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Re: Student Loan Math Complainy-Pants
« Reply #15 on: October 27, 2015, 06:08:52 PM »
This idiot agreed to the terms of the loan and now he is bitching.  Fuck this stupid fuck and those like him.

http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/hard-to-feel-sorry-for-these-people/

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Re: Student Loan Math Complainy-Pants
« Reply #16 on: October 27, 2015, 06:27:38 PM »
Is 17,500 per year for tuition, room, board really what we'd call "too expensive"? Even by Mustachian standards, $17.5k isn't a bad deal for a year's worth of living.

Even if we suppose that postponing payments until interest racked up to a total debt of $82,961 was totally necessary - that's still only $20,740 for each year of undergrad. And if we consider he actually did two years of grad school free due to scholarships... he actually paid only $13,827 per year of education.

Why shouldn't 6 years of education cost $80k? How is that unfair? If I sit around and do nothing with bare bone expenses and no income, it's going to cost me at least $20,000 per year. This guy got whole a education, to boot.

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Re: Student Loan Math Complainy-Pants
« Reply #17 on: October 27, 2015, 07:19:20 PM »
Lots of "Stupid" in this article, but since no one has brought it up yet, $80G for an education degree from Mankato State? Sure hope you used that awesome climbing wall while you were there!  The Trustees are every bit fully vested cronies in this higher ed scam... and they got paid first!

MrsPete

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Re: Student Loan Math Complainy-Pants
« Reply #18 on: October 28, 2015, 06:55:12 PM »
He's lying (probably to himself) when he says, "I understand interest".  Clearly, he doesn't. 

Thing is, I specifically remember learning these things in high school algebra.  It's not exactly specialized knowledge. 

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Re: Student Loan Math Complainy-Pants
« Reply #19 on: October 28, 2015, 07:15:46 PM »
He's lying (probably to himself) when he says, "I understand interest".  Clearly, he doesn't. 

Thing is, I specifically remember learning these things in high school algebra.  It's not exactly specialized knowledge.

This is what shocks me.... he knew what his monthly payment was, and he knew how many years it would tkae to pay off his loans.  Based on his article it seems like it took him an entire year to work out this super simple math equation:

(monthly payment) x (total number of months) = how much I'll pay.

That's not even a high-school level math!
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Re: Student Loan Math Complainy-Pants
« Reply #20 on: October 29, 2015, 04:06:24 PM »
He's lying (probably to himself) when he says, "I understand interest".  Clearly, he doesn't. 

Thing is, I specifically remember learning these things in high school algebra.  It's not exactly specialized knowledge.

This is what shocks me.... he knew what his monthly payment was, and he knew how many years it would tkae to pay off his loans.  Based on his article it seems like it took him an entire year to work out this super simple math equation:

(monthly payment) x (total number of months) = how much I'll pay.

That's not even a high-school level math!

It's third grade math. The next step, subtracting the "cost" of the item from how much you actually pay so as to figure out how much extra you paid for the privilege of borrowing, is second grade math.
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Re: Student Loan Math Complainy-Pants
« Reply #21 on: October 29, 2015, 05:31:16 PM »
And here's a counterpoint: http://www.startribune.com/counterpoint-math-on-student-debt-doesn-t-add-up/338111171/

Makes a lot of sense to me, and I'm glad the Strib actually printed it. I'm sure many of the comments are full of complainy-pants, but some people will just never learn.

YoungGranny

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Re: Student Loan Math Complainy-Pants
« Reply #22 on: October 30, 2015, 06:24:48 AM »
And here's a counterpoint: http://www.startribune.com/counterpoint-math-on-student-debt-doesn-t-add-up/338111171/

Makes a lot of sense to me, and I'm glad the Strib actually printed it. I'm sure many of the comments are full of complainy-pants, but some people will just never learn.

and one of the comments on the counterpoint:

"If you read the article, it sounds like a middle/aged or older guy writing it.  I find it interesting that his name is only listed at the bottom.  Charlie is merely a student at a private college studying accounting.  Nowhere in the article does Charlie tell us this, or whether he has taken out large student loans to a private college like St. Thomas, or if his mom and dad are paying his way.  I don't even know if I believe it's him writing it.  It sounds like someone from a banking family defending what's happening in America.  And yes, it's drawn plenty of responses from people who were able to pay their student loans before college cost $25-50,000 to go, and interest rates that rose into double digits.  The world is a different place.  if you haven't dealt with today's realities, talk to some who have.  I'll bet Charlie isn't one of them."

The world is full of complainy-pants I suppose.....

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Re: Student Loan Math Complainy-Pants
« Reply #23 on: October 30, 2015, 10:57:09 AM »
Also, it seems to me that our culture is much more accepting of student loans these days. You get a group of professionals together and if someone gripes about student loans, most will nod their head understandingly and talk about their student loans. There isn't that feeling of "hair on fire debt" that they must pay off ASAP. It's treated like a mortgage - everyone has one and it will take forever to pay off so why even try to do it any faster?

I was super blessed - my parents paid for my education. My husband got grants, etc for his education. And we have been saving for our kids educations.
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MgoSam

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Re: Student Loan Math Complainy-Pants
« Reply #24 on: October 30, 2015, 11:21:39 AM »
Also, it seems to me that our culture is much more accepting of student loans these days. You get a group of professionals together and if someone gripes about student loans, most will nod their head understandingly and talk about their student loans. There isn't that feeling of "hair on fire debt" that they must pay off ASAP. It's treated like a mortgage - everyone has one and it will take forever to pay off so why even try to do it any faster?

I was super blessed - my parents paid for my education. My husband got grants, etc for his education. And we have been saving for our kids educations.

Yeah, I'm very fortunate in that I had parents who saved and paid for my education as they did for my siblings, so I don't have any student debt. I feel like most people I know with debt treat it like it will always exist, whereas I have a decently-close friend who paid for both undergrad and grad school in about 5 years by living frugally sending as much money towards her debts (after maxing out her 401k), I personally love this idea. I wish more people were like her because she isn't the type to complain, instead she rolls up her sleeves and gets to work.

mm1970

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Re: Student Loan Math Complainy-Pants
« Reply #25 on: October 30, 2015, 12:02:09 PM »
And here's a counterpoint: http://www.startribune.com/counterpoint-math-on-student-debt-doesn-t-add-up/338111171/

Makes a lot of sense to me, and I'm glad the Strib actually printed it. I'm sure many of the comments are full of complainy-pants, but some people will just never learn.

and one of the comments on the counterpoint:

"If you read the article, it sounds like a middle/aged or older guy writing it.  I find it interesting that his name is only listed at the bottom.  Charlie is merely a student at a private college studying accounting.  Nowhere in the article does Charlie tell us this, or whether he has taken out large student loans to a private college like St. Thomas, or if his mom and dad are paying his way.  I don't even know if I believe it's him writing it.  It sounds like someone from a banking family defending what's happening in America.  And yes, it's drawn plenty of responses from people who were able to pay their student loans before college cost $25-50,000 to go, and interest rates that rose into double digits.  The world is a different place.  if you haven't dealt with today's realities, talk to some who have.  I'll bet Charlie isn't one of them."

The world is full of complainy-pants I suppose.....
I graduated in the early 90s and some of my loans were at 10%.  10% ! That certainly made me want to pay them off faster.

I admit to not reading or understanding my loan applications. I was 18.  Nobody in my family had gone to college.  Even my mom didn't explain it well to me, and she was a bank teller.  Overall families aren't well educated in this.