Black People Politics : Student loan rate extension passed under threat of veto

[Clyde C Coger Jr]

In the Spirit of Sankofa,




.......Pressure from the President, Mr. Barack Obama...

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Student loan rate extension passed under threat of veto

The House on Friday passed a Republican version of a bill that would extend the low 3.4 percent rate on government-subsidized student loans, despite pressure from conservative groups to oppose the measure and a veto threat from the White House.

http://news.yahoo.com/blogs/ticket/...nsion-passed-under-threat-veto-171547048.html


Obama would veto Republican student loan bill, says White House

Obama criss-crossed the country this week in support of legislation that would keep more money in the pockets of cash-strapped college students. Republicans initially resisted the idea, but Mitt Romney quickly moved to neutralize the issue as a political weapon by embracing it in principle. House Republicans adapted by finding a clever "pay-for" solution to defray the cost of the legislation (lower interest rates = lower payments = lower revenue for the government). They chose the Prevention and Public Health Fund included in what all sides have now agreed to call "Obamacare," which Republicans have vowed to repeal.
http://news.yahoo.com/blogs/ticket/obama-veto-republican-student-loan-bill-says-white-160233278.html

Peace In,

 

[Clyde C Coger Jr]

In the Spirit of Sankofa,





........A better understanding of student debt and its connection with the national debt, and obviously, the economy's recovery:

A guide to student loans​

By KIMBERLY HEFLING, AP Education Writer – 3 days ago ​

WASHINGTON (AP) — President Barack Obama and his likely GOP opponent, Mitt Romney, agree on an issue of importance to college students: Keeping the interest rate low on a popular federally subsidized student loan issued to low-and middle-income students.
The interest rate is scheduled to double on July 1 from 3.4 percent to 6.8 percent on subsidized Stafford loans unless Congress acts. About 7 million undergraduates would be affected, raising costs by an average of $1,000 each, according to the White House.
Q: How big of a problem is student loan debt?
A: U.S. student loan debt has surpassed credit card and auto-loan debt, with some estimates putting it at $1 trillion. This debt jeopardizes the fragile recovery and increases the burden on taxpayers.
http://www.google.com/hostednews/ap...dYnC4A?docId=158633047edc4af08c09f6aa90e01fae

Peace In,

 

[Shikamaru]

The interest rate is scheduled to double on July 1 from 3.4 percent to 6.8 percent on subsidized Stafford loans unless Congress acts. About 7 million undergraduates would be affected, raising costs by an average of $1,000 each, according to the White House.

I am unsure if this is correct.

Let's use the rule of 72 for this example.
Let's round 3.4 down to 3.
Let's round 6.8 up to 7

Dividing 72 by 3 yields 24.
Dividing 72 by 7 yields approximately 10.2.

School debt interest compounds.

At 3%, the debt doubles every 24 years.
At 7%, the debt doubles every 10 years.

3% and 7% are Annual Percentage Rates (APR).
The Annual Percentage Yield (APY) of both will be a bit higher due to compounding interest.

Furthermore, school debt is amortized with the bulk of one's monthly payment settling the interest first and the principal amount later as the end of the loan approaches.

This ensures the banker gets his profits first.

Taking into account the aggregate of student loans as well as the increase in the number of student loans that are in trouble, I say the figure of $1000 on average is greater.

 

[Clyde C Coger Jr]

I am unsure if this is correct.

Let's use the rule of 72 for this example.
Let's round 3.4 down to 3.
Let's round 6.8 up to 7

Dividing 72 by 3 yields 24.
Dividing 72 by 7 yields approximately 10.2.

School debt interest compounds.

At 3%, the debt doubles every 24 years.
At 7%, the debt doubles every 10 years.

3% and 7% are Annual Percentage Rates (APR).
The Annual Percentage Yield (APY) of both will be a bit higher due to compounding interest.

Furthermore, school debt is amortized with the bulk of one's monthly payment settling the interest first and the principal amount later as the end of the loan approaches.

This ensures the banker gets his profits first.

Taking into account the aggregate of student loans as well as the increase in the number of student loans that are in trouble, I say the figure of $1000 on average is greater.

In the Spirit of Sankofa,






.......Perhaps, but in all fairness to the report, given in generalities, which states costs are to rise "on an average" and "about" to the total number of affected students; from which there is no great disparity in comparison to your general calculations: "I say the figure of $1000 on average is greater."

About 7 million undergraduates would be affected, raising costs by an average of $1,000 each, according to the White House.

Further, on negative amortization, there's this:

Making payments of at least the new interest that accrues during the in-school and grace periods avoids negative amortization. This can save borrowers money and help them pay off the debt sooner that borrowers who defer payments of principal and interest.

Negative Amortization: Negative amortization occurs when the payments on a loan are less than the interest that accrues, causing the balance owed on the loan to increase. Interest capitalization is a form of negative amortization.
http://www.finaid.org/loans/

And this:

Increasing the term of the loan is another way of reducing the monthly payments. For example, increasing the term on a Federal unsubsidized Stafford loan from 10 years to 20 years will cut the monthly payment by about a third (34%). But because the payments exceed the new interest that accrues, the borrower will make some progress in retiring the debt.

And then the report offers other critical considerations...

However, the number of borrowers defaulting on federal loans has jumped sharply recently. Of 3.6 million borrowers who entered repayment in fiscal 2009, nearly 9 percent defaulted with two years, up from 7 percent for the previous year's cohort. Meanwhile, the College Board said last fall that the average in-state tuition and fees at four-year public colleges rose an additional $631, or about 8 percent, compared with a year ago. The cost of a full credit load has passed $8,000 — an all-time high.

But by all means Shikamaru, be welcomed to assist the Government in sorting out this problem. At the end of the day, its a good thing, in my book, President Obama used his veto power to get the House(GOP) to maintain low interest rates.

Peace In,

 

[Shikamaru]

But by all means Shikamaru, be welcomed to assist the Government in sorting out this problem. At the end of the day, its a good thing, in my book, President Obama used his veto power to get the House(GOP) to maintain low interest rates.

All the assistance they shall be receiving from me is the paying of my school debt off in its entirety before the close of this year never to fall for the trap of borrowing money for college ever again.

Staying away from debts that can't be discharged out through bankruptcy is the lesson learned from paying that "tuition".