Scooch
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- Aug 27, 2011
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subsidizing debt just shifts interest to principal, that's collected by the school up front.
my own "massive" debt doesn't really cost so much because the interest is so low.
but people like to talk about omg i have 60k in loans (that i pay over 30 years at a crazy low interest rate thanks to tax payers)
if it were only 30 and we paid the unsubsidized interest, we'd still have the same payment but people wouldn't be able to say OMG 60K!
the sticker price is inflated to soak rich people with marginal students and the nominal amount of loans is inflated over the real amount
my parents made too much to bother with applying financial aid but i didn't pay the sticker price - schools still compete for decent students
Aren't most student loans for 10 year terms, not 30?
I get the math of what you're saying, but in real dollars to the student and then young adult, paying $500/month from age 22 to 32 is not an insignificant burden.
I also suspect that a lot of degrees at good-but-not-elite private schools don't propel you into a higher paying job than the same major at a similarly regarded public school.