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by betaby 695 days ago
Is that a typical rate? Youtube showed me scary cases of 9%.
4 comments

No it is not! I was appalled years later to learn that government-backed loans were being given at such high rates. It just seems cruel. The government has no obligation to turn a profit on student debt.
If you're in the US, the government isn't really profiting on school debt. The government guarantees the debt, but that is a play to protect the banks rather than to drum up profits. Profits really don't matter to a government that can print any money it needs but doesn't currently have.
https://studentaid.gov/understand-aid/types/loans/interest-r...

6.5 / 8 / 9 according to their own website

These are about the same as when I was in school during the great financial crisis

I have/had loans from 2.5-6.5

Depends on when you went and whether your loans were federally backed. 9% for recent students is possible but pretty high; federal undergraduate loans in the past 10 years have been ~3-5%. (Private loans can have much higher rates but represent a relatively small fraction of loans and loan balances. [1])

More information: https://educationdata.org/average-student-loan-interest-rate

[1] - https://www.enterval.com/#reports

Loan rates just depend on the terms you accept (fixed vs variable) and the base rate when you take out the loan.

20 years ago the base rate for any debt was cheaper than it is right now.

What anyone has to decide is whether they are willing to take on debt at today's rates. You weigh the pros and cons and decide for yourself.

Personally I wouldn't have gone to college if I had to take on debt to do it. That was my choice though, and it was only right for me in my situation.

One of my loans out of college was 13%.