Letter: Student loans are often misunderstood – Post Bulletin

I write about the editorial: “A proactive plan to prevent college debt would benefit students.”

In an effort to clarify some of the statements contained therein, I hope to aid in a better understanding of the issue of student loans.

My first clarification concerns the most misunderstood subject on student loans. For those on income-based recovery (“IBR”) plans, which make up the vast majority of students, the payments are not designed to pay off their loans as they would be for an auto loan, because the payments are “ based on income” or in other words. , the normal calculation of payments does not occur because they are based on income. And the continuously referenced large balances are irrelevant because, unlike normal loans, these loans are amortized over 10, 20 or 25 years provided that one makes minimum income dependent payments throughout. Ten if doing community service, 20 or 25 depending on when the loan was initiated.

Student loans should never stop someone from buying a home. By explaining the payment plan to the bank, people whose initial application was refused will have their mortgage approved. And students should never drown in a “sea of ​​student debt” by making minimal payments based on income as the amount of debt is eventually written off.

I agree that to fix the problem America needs to change the way higher education is paid for, which is why I suggested the government standardize the terms and retroactively lower the interest rate to 1 -2% to cover the cost of servicing the loans.

Christopher OwenLas Vegas, Nevada


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