Obama's Student loan deal saves students between $4-$8 a month

[Ichingcarpenter]

The Impact

Let's consider the impact of each of these orders.

Consolidation

The first would clearly be the most significant, because it is aimed at helping more student loan borrowers. How much would an interest rate reduction of up to 0.5% affect payments?

For the average borrower, the impact would be small. In 2011, Bachelor's degree recipients graduating with debt had an average balance of $27,204, according to an analysis done by finaid.org, based on Department of Education data. That average has ballooned from just $17,646 over the past decade.

Using these values as the high and low bounds of average student debt over the last ten years, the monthly savings for the average student loan borrower would be between $4.50 and $7.75 per month. Clearly, this isn't going to save the economy. While borrowers with bigger balances would save more, this is the average. And even someone with $100,000 in loans would only cut their monthly payments by $28.50.


http://www.theatlantic.com/business/archive/2011/10/obamas-student-loan-action-wont-have-much-impact/247411/

A lot more anaylis at the link from The Atlantic.

[Safetykitten]

1. But in 2027, it kicks in and they save 100 bucks.

[Ichingcarpenter]

4. That $100 is a year not a month.

Its better than nothing

[Safetykitten]

6. Why oh why, when presented with a problem, Obama "solves" it by itty-bitty nothings?

[KILL THE WISE ONE]

8. because that is all he can do by executive order ?

better then nothing ...

[Ichingcarpenter]

9. 1.3 to 2,5 cents a day

that adds up over the decades as your children will be paying off their loans.

[Sherman A1]

2. It is just a shame that

we find all sorts of money for bank bailouts and endless wars, but we can't pump money into education which would reduce the needs for the student loans in the first place, helping our schools, providing a well education citizenry capable of building our future. But then that's just my opinion.

[customerserviceguy]

15. From what I've seen

Every new loan program, grant gimmick, or educational tax credit gets swallowed up by the higher education system, and they still want more. You cannot fill this bottomless pit by shoving more money into it.

A college education is the most expensive thing I can think of where a person with no (or bad) credit can get a loan for, without a demonstrated means of paying it back, for whatever course of study (needed by society or not) with zero collateral. The only difference between those "business" or "career" schools that advertise on your local rerun TV station and the college/university system is ivy.

[msongs]

3. restore them to a government run function and get rid of the corporate thieves who handle them

[dkf]

7. Didn't they do that already?

[Change has come]

5. How very progressive!

Please add this to "the list"!!

[defendandprotect]

10. Good Ole Obama ... !!! ROFL

[KansDem]

11. All right!!! Starbucks, here I come!

But only once or twice a month...

[polichick]

14. Thanks for the stock tip - SBUX will go up!! :)

[a la izquierda]

12. Bwahahaha...

this will make a huge difference with my $550/month loan payments. That's the same amount as my rent.

I'm not asking for my debt to disappear...but I swear to god, if the rich get tax cuts (my uncle's cut would pay my loans off in one year), I'm done with this party and this president. I'm already mostly done with the party, and I'm only voting for the President if I live in a swing state.

[KG]

13. let's add this to Teh List!!!!!!!!!1111!!!!

[FarLeftFist]

16. Sometimes progress is measured one inch at a time.

[lonestarnot]

17. mmmm mmm mmm in 2 years kid can buy a fucking hamburger.

[Cal Carpenter]

18. This isn't even crumbs

Honestly, it's not. This is a plan that will look just lovely to people who aren't effected by it. This is considered a 'victory' or 'progress'? It's a freaking joke. The student loan racket just funnels more money upward into the hands of the executives of banks at the expense of the working people.

Sort of like the mortgage refi plan to save people's homes. I can tell you first hand it was a joke too. I happened to refi my mortgage loan while that program was going on, and unbeknownst to me I was funnelled into that program (by my bank which surely got a kickback for doing so) and I am counted in those numbers of homes made 'more affordable' by the federal government when in reality I was doing just fine, simply trying to get a better interest rate when they got lower a couple years ago.

Sort of like Cash for Clunkers.

And just wait until the health care reform kicks in, especially the mandate, and see how that shakes out.

:puke:

[a la izquierda]

19. Well, I just discovered that I won't even be eligible...

because I graduated with my PhD in 2011.
Great.

[AngkorWot]

20. Yet people flew into a rage over BoA's five dollar a month fee.