For George and others. A case in point of 'neoliberalism'. Corporatist government: how student loans are structured

[Jim Doran]

GOH, George especially,

This is an example of the creation of harmful structures and of government enabling businesses to disable people!

All in the name of wonderful, good goals!

I DO NOT know this from personal experience but I have seen enough descriptions of student loans to know that they are all describing the same elephant.

"My final attempt to help those that don’t understand the student loan game.

Mortgage: At closing, you know exactly what you will pay back. Interest is calculated monthly. Extra payments pay down principal.

My Mortgage was $135k for a 30-year loan in 2004. Refinanced once for lower interest rates and terms. We made a couple of lump sum principal payments and the house was paid off in 2021. That's 13 years early.

Student Loan: Interest is compounded daily. Extra payments go toward future payments, not to pay down the principal. If you don’t make a monthly payment because you are paid up in advance, your interest is still calculated daily.

I was told if I made my payments on time (I never missed a single payment nor paid late) loan would be paid off in 20 years. I won’t say the college financial aid rep lied to me. What I will say is she probably didn’t understand it herself.

I was also told about the Public Service Forgiveness. Make 10 years of payments and the rest is paid off. Well, when I applied, I was told my loans weren’t eligible.

I borrowed $45,000 in student loans

First 10 years I paid $275/month = $33,000

Next 15 years I paid $550/month = $99,000

1 final lump sum payment = $16,000

Total $148,000

Mortgage $135k paid off in 17 years for a total of $183,000.

Student Loan $45k paid off in 25 years after making a final $16k payment for a total of $148,000.

Yes, you can say everyone should know better, but chances are you wouldn’t have known any better either.

We are told over and over that your way out of poverty is through education. Yet, the poorest, most vulnerable, first-generation college students are just happy to be living their dream and trying their hardest to escape the cycle of poverty.

What the government should do is take every penny people have paid toward interest and apply it to the principal and preferably stop charging interest. This would probably pay off many loans. At the most, the loans should be set up like a mortgage.

Anyone who reads this and doesn’t understand the system is broken doesn’t want to understand".

Best,

Jim