I see where home mortgage rates can run below 2.5%. Savings accounts pay a half-percent. Of course, under current laws, credit cards can charge 15%-20%-25% plus.
The poorer one is, the more they pay. Like not having bail money, or money to pay traffic fines resulting in interest payments doubling and more the debt. Or having to pay exorbitant daily fees to private companies for monitoring. Profit making on our lives. Our lives. Not for real goods or equitable and fair services. When I was a boy in the ’50s, my father taught me about bookies, 'the vig' (vigorish), and loansharking. Today, loansharking is legal, if you are rich. Current near-zip inflation shows no change coming soon. But the interest we earn on a 403 is taxable?
There appear to be many people, whether through some deep-felt sense of right/wrong or those believing life is a zero-sum thing, who do not want student loans forgiven. Despite having a strong America means having an educated populace. Despite American students being saddled with education costs and health care costs that first-world country students are not.
From the Lending Tree site: "For all types of debt, including student loans, capitalized interest happens when some of the interest you owe gets added onto your principal balance. Let’s say you borrowed $25,000 at the start of college, and your loan had a 5.5% rate. If you spend four years in deferment, making no payment on your student debt, your loan will quietly accumulate $6,189 in interest. Once you graduate and your grace period ends, that $6,189 gets added to your principal amount. Now instead of owing $25,000, you’re on the hook for $31,189. Not only does capitalized interest on student loans increase your debt, but it also means you end up paying even more interest. Because your principal and accrued interest are now combined, you essentially end up paying interest on your unpaid interest."
However, who gets out of a degree for under 5 times $25,000? Compounded.
American students have to start families later, buy homes later (which wind up costing a bundle more as profit takers buy up the foreclosed home for rentals) and start families later. They will be able to put less aside for retirement. The consolidation of all wealth in America continues.
Why not have zero interest on student loans? Refund the interest paid on student loans going back 'x' years, eliminate all interest on current loans and charge no interest on future loans? If we cannot fund education like first-world countries, at least make it possible. No profit making on the future of America. Debt entered into without chicanery, debt paid back, families and homes started, more equal opportunity for more Americans, an equal playing field versus the rest of the world. Perhaps a partial solution, admittedly not perfect. But perfection should not be the enemy of the good. I believe this might result in more good than the current way.
Michael Meninger lives in Worcester.