Student Loan Interest Reduction

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They did not pass the law that would give students lower interest rates but they probably will.

I wish to go on record as saying I don’t want those lower interest rates passed. We don’t need to make student loans more attractive. We need to make student loans less attractive.

I watched a TV show last night which included the story of a young dancer who had gotten a much-coveted $28,000 per year position as a dancer. She was lamenting that she could not pay off her $60,000 in loan debt. Of course she can’t! There was close to zero chance that her intended career would supply her with the salary needed to cover that loan debt.

Nobody should take out $60,000 in loans to get a dance degree. Or a theater degree. Or an anthropology degree. Not unless they plan to live with their parents for a number of years.

From http://money.usnews.com/money/blogs/my-money/2013/01/30/how-much-student-loan-debt-is-too-much:

Your Budget with $50,000 in Student Loans (16.5 percent of borrowers). This is where graduates really start to feel the burden of student loans. Monthly payments are around $450, largely because private loans are necessary above $31,000 in tuition costs.
It would be a tight budget for someone earning between $40,000 and $50,0000. Student loans would be a large portion of the budget. You’d be paying about as much for loan payments as you would for food. Food is usually the third largest category in a household’s budget. Your monthly loan repayment would be about a third of what you are paying in housing costs.
 
Eduhonesty: I feel sorry for the girl. In my view, financial aid offices have a lot to answer for.  But reducing loan rates is not the answer. Discouraging debt is the answer.