I was a student without funds, so I had to borrow money to attend college and grad school.
When I did borrow money, I always borrowed, knowing full well that it would have to be paid back. I always had a job to pay for my living expenses; therefore, I tried to borrow only for tuition costs. The rate was one or two over prime. Today prime is very low.
When Obama and the Democrats took over, they did away with the banks’ terms and used our government to fund the loans. The catch here was that process then caused the rates to rise. At times the loan rate could be more than 8%. Also, they allowed the money to be used for other things unrelated to tuition—a big mistake. With the competition of all the federal payments, the colleges and universities raised tuition, and students were more apt to use the funds for living expenses and not just education. The thinking was, why to get a job at low wages now if you could borrow the money and use it while you were in school. Once you graduate, you will get a good job and pay the loans back with the excellent pay you expected. Therefore most students did not seek employment to offset the costs of living outside their homes. Student debt got out of control, and now we see the consequences of government control and government policies encouraging student debt. All student loans should only pay for tuition.
I would propose that all loan recipients be provide a new loan agreement wherein all those students that paid off their student loans at the amount over one over prime would be provided a credit. For all others still owing the student loan fund they should have their loans recalculated to allow them the same one percent over prime that those have been in place from the inception of their loans. No loans should be forgiven.
Original source can be found here.
