Shafted by Student Loan Interest

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Shafted by Student Loan Interest.003

Who would shaft anyone on their student loan interest? Our beloved U. S. Federal Government. That’s where the payments go.

I have many doctors and they have their assistants and RN’s and LPN’s. This person is one of those, a highly trained medical professional.

She told me she was having to pay 7.9% interest on her student loans of $90,000. Actually it is only one loan now, because she consolidated them all into one.

Some of the doctors in that practice have student loans at 4% interest that preceded her student loans. Some doctors in that practice have student loans at 4% interest that came later than her loans. She got caught in the middle of a spiral up in interest.

No problem, right? People refinance their house mortgages all the time to get a lower rate. She can just refinance her student loan at a lower rate.

No, no, no. Our beloved U. S. Federal Government says, “Honey, you’re stuck with that rate ‘til you pay if off or doomsday, whichever comes first”. Actually our beloved U. S. Federal Government didn’t say Honey, but I did. She reminds me of the sweetness of the honey when I used to go out and steal the honey from the beehives, and the bees chased me. She should be as mad at our beloved U. S. Federal Government as the bees were at me. Instead she is truly soft-spoken, gentle and a genuinely kind person who is resigned to her fate. And here our beloved U. S. Federal Government is trampling all over her.

She may be resigned to her fate, but I’m not. I did a twelve-month spread on 7.9% interest and 4% interest using a total debt of $90,000 with a payment of $1,000 a month which she is paying. On 7.9% interest for 12 months she paid $5,074 on the principal and $6,926 in interest. Her loan balance at the end of the first year was $84,926. If she had been allowed to refinance at 4% interest, she would have paid $8,555 on the principal, and $3,445 in interest. Her balance at the end of the first year would have been $81,445.

Let’s extrapolate that out to paying off the debt. That would be approximately 18 years at 7.9% interest and 10 years at 4% interest. I say extrapolate because I don’t want to go through 18 individual years at 7.9%, and 10 years at 4% interest. My figures are still quite close.

Simple math tells you the difference. At 7.9% interest and a payment of $1,000 per month, that’s $216,000 to pay off the debt. At 4% interest and a payment of $1,000 a month that’s $120,000. She will pay $96,000 more in interest than she should have to.

That’s outrageous. Where are our Alabama Congress people and Senators on this? It seems like at one time or the other all of our D. C. elected officials complained about the student loan situation. Then they sit on their asses, those from Alabama and elsewhere, while this young lady is money raped. What in the hell are you folks doing in D. C.? Do they ever see an injustice anywhere?

Where will that extra $96,000 go that this lady is having to pay in interest? Probably on one of the many pet projects the D. C. pols attach as almost unseen amendments to this bill and that one. Couldn’t you at least note somewhere on your pet project that she paid for it? At least give her a citation. Call up and thank her personally.

The Federal Reserve has kept the interest rates so low, they say for fear of inflation, when I find how much interest we get on any savings, I try to go out and celebrate. The problem is I can’t find anywhere I can celebrate for a quarter, one-fourth of a dollar.

And here she is dealing with $96,000 unnecessary, additional debt. I would call that a shafting. Wouldn’t you?

She has a friend who is a doctor-in-residence. Her friend’s student loan debt is close to $300,000. When this almost doctor pays the interest on her student loan, our beloved U. S Federal Government can pay off the almost $19 trillion in U. S. debt. Glory be.

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