Could it be that the actual price of college is too high and not the interest rate on school loans?
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Join the contest Subscribenot sure if you're trying to be cute hereSo they should not be based on federal treasury auctions? What do you suggest as a benchmark, instead? Are you not concerned about unintended consequences when you distort the market too far?
And what is too high? We are not even back to the student loan interest rates from the 1990s, which were as high at 8.25% in 1995-96. The rate is expected to go up to 6.5% soon, which would be a 16 year high, not an all time high or some sort of record. It is almost more of a normalization.
that is a separate issue but one I'm also in full agreement on. College is way way too expensiveCould it be that the actual price of college is too high and not the interest rate on school loans?
There is a certain amount of risk that the loans would not be paid back. There must be a risk premium associated with it. The originator needs to be compensated to cover that risk, regardless of who it is. The current rate is far from usury.not sure if you're trying to be cute here
anything backed by the gov't is considered risk free so the loans should be have servicing rate on top of the risk free rate and no more. Instead, we've created a cashcow for the banks and made loans more expensive
private loans, have at it
no, loans backed by the gov't carry no credit risk. 30yr is under 5% so the rate plus servicing should price from there.There is a certain amount of risk that the loans would not be paid back. There must be a risk premium associated with it. The originator needs to be compensated to cover that risk, regardless of who it is. The current rate is far from usury.
A $1 loan with 7% rate is nothing. A 70,000+ cost of the education will generate a hard life to repay when most graduates are starting their careers and the interest rate only adds to it. It’s not the current loan rate, it is the principal that is the genesis of the issue.
I guarantee this government has risk.backed by the gov't carry no credit risk.
no question but we're discussing the reality of the rate as applied in financial circles.I guarantee this government has risk.
#DominionHasEnteredTheChat
Absolutely they do. I think we are talking about two different things. I’m talking about the risk of them not being paid back. No loan is risk free. That is already happening.no, loans backed by the gov't carry no credit risk. 30yr is under 5% so the rate plus servicing should price from there.
private loans I agree would let the mkt dictate the cost
please show where a us gov't backed loan is not being paid back or has been defaulted on by the US Gov'tAbsolutely they do. I think we are talking about two different things. I’m talking about the risk of them not being paid back. No loan is risk free. That is already happening.
No. Defaulted on by the student. This is what I mean that we are talking about different aspects of the same topic. What I am saying is that regardless of the lender they need to be compensated for the risk they take. 7-8% isn’t nearly enough for many of these degrees with little in the way of job prospects. I know I wouldn’t invest in a person who gets a shitty degree without a serious interest rate. It’s essentially a junk bond. The government should charge accordingly as well.please show where a us gov't backed loan is not being paid back or has been defaulted on by the US Gov't
I would add to this to say that the government granting funds to any university is also a problem. Because grants come with hooks. Those hooks are never about protecting the Constitution or any kind of liberty. Nope. It’s a clue.no dog in this fight,but,seems to me the idea of the government "lending" for any private endeavor is the driver of the problem. student loans being the one here but home mortgages,bailing out banks and auto manufacturers is not even close to a legitimate function of same and should have never be happening or continued. the exorbitant cost of college is a rather separate issue which should be addressed. the presence of no risk loans to pay for it is retarded beyond comprehension. a mortgage lender has a shot at recouping loss by taking the property in a default. gonna garnish wages of a 20 something working at mickey d who got a degree in gender studies at a cost of 60-80K? good luck.
the role of the fed and gov regulation and socialist vote buying scams is really the big driver of inflation.
The answer is not to ring up six figure loans for college. At any interest rate. Even in today's world, there are still plenty of ways to obtain an (increasingly worthless) college degree. As my co-worker says, "my kids have two college funds: J-O-B, and A-R-M-Y."Agreed, take a loan pay it back. student loans are not an exception.
The answer to student loans is to get the interest rates to a realistic level. I know grads that are paying 7% interest (and more) on six figure loans but paying half that on home loans taken a few short years ago. The lenders have a loan that cannot be extinguished by bankruptcy, is insured by the government against default and has little service or origination responsibility. These should be low interest loans not a meal ticket for lenders.
I would like to see an investigation into how student loan lenders were able to get such a sweetheart deal.
They should have come out the gate at 20%.“What you have right now is a situation where these high rates aren’t generating more braking power on the economy,” said Joseph Lupton, global economist at J.P. Morgan. “That would suggest that they either need to stay high for longer or maybe even higher for longer, meaning rate hikes might come into the conversation.”
Yep... The FED Reserve should have gone "Paul Volcker" during 2022. Reminds me of a home owner getting a termite report saying there is a small infestation that needs to be eradicated. The mindset of "We will deal with it when it becomes an issue" seems to be the mindset of Americans".They should have come out the gate at 20%.
They’d bring inflation to a screeching halt if the banks would turn off these 15%-25% vehicle and personal loans.
I hope you’re correct.I also expect to be buying gold under $1,900 per ounce in the next 6 months. I’m not going to short it, but that’s where I see it.
Countries are buying gold lately. That should tell everyone what’s up.I hope you’re correct.
If it dips back below $2K, I think you’ll see a lot of folks buying…incidentally increasing demand and raising prices.
That said, I honestly believe the true price is much higher than the current $2300 or so…and have been buying more every month; only an ounce or two at a time though. Of course all of us individual buyers combined worldwide are pretty low inputs on the global market where the big boys buy it by the ton…not insignificant, but not enough volume to seriously move the market.
History repeating itself. Amazing how the Government cooks the books and makes the USD appear "strong". The very countries that make up the "basket of foreign currencies" are stocking up on gold.Countries are buying gold lately. That should tell everyone what’s up.
it's a combination but she is not wrong. need to really raise rates, force higher reserve requirements on banks and cut gov't by about 30% because if not, we could be looking at persistent 3.5% inflation floor
insane right!!!!!!! how anyone could be happy about this and the mkt going higher is absolute bonkers
would love to see thatIt will never happen but what banking fallout around the world if people simply put plastic away and use cash for a few months. Passively resisting against the system by using cash!
Because the big bursting bubble is being set up. The big guy's are hedged and the little guys with retirement money in BlackRock and the big banks are going to take a beating. We talk about meme stocks.... Let's talk about meme markets of the world.insane right!!!!!!! how anyone could be happy about this and the mkt going higher is absolute bonkers
It is much worse then they projected. This is what the Clown Circus see when their heads is so far up their asses! Pure bullshit just saying.
Could probably cut .gov by 70% and have it run more efficiently.it's a combination but she is not wrong. need to really raise rates, force higher reserve requirements on banks and cut gov't by about 30% because if not, we could be looking at persistent 3.5% inflation floor
I think they should raise ratesMay 17 (Reuters) - U.S. Federal Reserve Governor Michelle Bowman on Friday repeated her view that inflation will fall further with the policy rate held steady, but said she has seen no improvement on inflation this year and remains willing to hike rates should progress stall or reverse.
"After seeing considerable progress on slowing inflation last year, we have not yet seen further progress this year," Bowman said in remarks prepared for delivery to the Pennsylvania Bankers Association in Nashville, Tennessee. "While the current stance of monetary policy appears to be at a restrictive level, I remain willing to raise the target range for the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed."
I agree.I think they should raise rates
We're still at 3.5% and I don't believe it's that low.
The Fed uses PCE when talking about a 2.0% inflation target. The news media confuses us with CPI because that shows a higher number, which is better for clicks and ratings, but distorts things to the point that the average American has no clue what is going on. But, hey, at least the news media sold some more ads.I think they should raise rates
We're still at 3.5% and I don't believe it's that low.
CPI index has been treated like a two dollar whore. The amount of things the Gov keeps putting in and taking out to manipulate the numbers; for a lower inflation rate is ridiculous.The Fed uses PCE when talking about a 2.0% inflation target. The news media confuses us with CPI because that shows a higher number, which is better for clicks and ratings, but distorts things to the point that the average American has no clue what is going on. But, hey, at least the news media sold some more ads.
PCE is the Personal Consumption Expenditures index.
PCE is at 2.7%
I am just pointing this out so that when you hear the Fed folks talk, you will at least be on the same page enough to understand what they are saying. They are not looking at a 3.5% number that they are trying to lower to 2.0%. They are looking at a 2.7% number that they are trying to lower another 0.7%
yes correct however, the cpi data drives the narrative and often diverges from pce. yes they usually go hand in hand but not always. If CPI continues to flatline or trend up with summer spending, Fed won't give a shit about pce as the narrative is all that is discussed by the talking headsThe Fed uses PCE when talking about a 2.0% inflation target. The news media confuses us with CPI because that shows a higher number, which is better for clicks and ratings, but distorts things to the point that the average American has no clue what is going on. But, hey, at least the news media sold some more ads.
PCE is the Personal Consumption Expenditures index.
PCE is at 2.7%
I am just pointing this out so that when you hear the Fed folks talk, you will at least be on the same page enough to understand what they are saying. They are not looking at a 3.5% number that they are trying to lower to 2.0%. They are looking at a 2.7% number that they are trying to lower another 0.7%
They also just changed the actual formula changing the time period. You can't even compare historical values.CPI index has been treated like a two dollar whore. The amount of things the Gov keeps putting in and taking out to manipulate the numbers; for a lower inflation rate is ridiculous.
How many stores still take cash? Will be a long line at the checkout.It will never happen but what banking fallout around the world if people simply put plastic away and use cash for a few months. Passively resisting against the system by using cash!
Didn't know about the changing the formula/time period.. been a while since I dissected the CPIThey also just changed the actual formula changing the time period. You can't even compare historical values.
You'll own nothing and you'll be happy.
The BLS analyzes 2 years of spending information during the following year (2021) to estimate the biennial spending weights used to calculate CPI indexes in 2022. Rather than continuing to use these spending weights in 2023, the BLS updated weights to reflect consumer spending in 2021. With this change, the BLS uses one year of spending data rather than two and updates every year rather than two years.