This viral post claims to help people understand student loans better, but gives bad/misleading info regarding the nature of student loans vs mortgages and how interest is calculated.
▪️The meme makes a big deal about student loan interest being compounded daily, but this is insignificant. Most of us should have calculated interest rates compounding annually/monthly/daily/hourly/continually back in middle school algebra.
▪️The differences are underwhelming. If you had $100K in savings with an APR of 5%, after 10 yrs you’d have $164,700.95 with monthly compounding, vs $164,866.48 with daily. Over 10 yrs the difference is less than $200 (0.2% of the initial balance). Which is why many banks offer daily compounding savings accounts.
▪️You can absolutely pay down your student loan principal with extra payments, although you might need to let the lender know in writing. Very strange that a post claiming to give people info about SLs would fail to inform people about this!
https://www.studentloanborrowerassistance.org/how-do-i-pay-extra-to-reduce-principal/
▪️Ironically, the difference between SLs and many other loans is that Federal law prohibits prepayment penalties on SLs (public and private). On other loans, there can sometimes be added fees for paying off a loan too early.
https://www.forbes.com/advisor/mortgages/prepayment-penalty-what-it-is-and-how-to-avoid-one/
▪️The reason SLs seem to catch borrowers off guard compared to mortgages is not because interest is calculated differently, it’s because the borrower doesn’t begin payments for 4+ years. If you didn’t start paying your mortgage until 4 years after closing you’d have the same issue.
▪️This post claims to want SLs treated like mortgages, but ignores the many ways SLs get preferential treatment. Like tax deductions and income-based repayment plans. Now, borrowers can cap their payments at 5% of discretionary income, no matter how much they owe!
▪️And after 20 years (sometimes 10 years) the remaining loan balance is forgiven (absorbed by the US Treasury). That is a repayment deal that no mortgage can touch, and one that incentivizes students to borrow recklessly.
https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness
▪️The central problem is that college has gotten vastly more expensive, which government subsidizing and guaranteeing SLs has only exacerbated. At best, changing how SLs are structured would just shift the financial burden more to the taxpayer.
▪️This is a proposal that pertains only to graduate level nursing degrees, not undergraduate ones (which were never considered professional degrees). The proposal will have a 30-60 day public comment period next year, where groups can object, before the DoE will decide on it.
▪️This is about how much federal student loans someone can take out for a particular degree. The cap on graduate degrees is $100k ($20,500/yr), while a “professional degree” limit is $200k ($50k/yr).
▪️Under the new rule proposal, professional degrees include:
🔹Pharmacy
🔹Dentistry
🔹Veterinary medicine
🔹Chiropractic
🔹Law
🔹Medicine (including osteopathic medicine & podiatry)
🔹Optometry
🔹Theology
▪️The nursing degrees excluded are ones like master of science in nursing (MSN), doctor of nursing practice (DNP) and PhD in nursing. These degrees would be limited to $100k in federal student loans, like all other graduate degrees.
▪️These changes came from the One Big Beautiful Bill’s...
▪️The left keeps using this meme but they don’t actually believe it. If you believe SNAP subsidizes companies to pay below a “living wage” this implies that if you take food stamps away they would suddenly pay a higher, “living” wage. So why not get rid of food stamps, then?!
▪️Except they know, and everyone knows, this isn’t true. Wages are set by supply and demand, not some mythical “living wage” metric. Absent food stamps there would actually be downward, not upward, pressure on wages, because the reality is food stamps subsidize the poor to not work as much as they might otherwise need to.
▪️Without SNAP, some low income people would need to work more hours to make ends meet, increasing the availability of low-skilled labor and lowering wages (all else being equal).
▪️Plus, we all know the left loves and supports food stamps. Which means, by this meme’s logic, they love to subsidize corporate profits. But they don’t really, they just think this ...
▪️Wait, this is the guy libertarians and the new right rave about being a great historian?! This sounds like a clueless meme from The Other 98%, except they wouldn’t add in the bizarre defense of feudal lords. Feudalism didn’t deprive peasants of their livelihoods for abstract goals? This is total fantasy.
▪️Amazon employs 1.55M, so this is less than 2% of their workforce, although these cuts will be to corporate, which employs 350k, so 8.5% of that. The CEO says there is an excess of bureaucracy at Amazon, and AI can automate certain repetitive tasks. Also, much of the cuts will be to HR, which is expected shrink by 15%, yay. Managers and HR are peasants now?
▪️I don’t know the inner workings of Amazon, and neither does Darryl, but this seems to be normal management practice to keep a company efficient and competitive. Given the immense size of Amazon the numbers look large, but far bigger shakeups happen all the time in the private sector. Apparently, under the new ...
