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.
It’s funny to see the left use the same conspiratorial rhetoric as the right did a year ago regarding the jobs numbers being downwardly revised. So many on the right, who knew nothing of how the jobs numbers are calculated or why they revise them, were convinced the downward revisions were a conspiracy to help Biden win.
If people want to have a debate about the birth death model or the survey methods, ok, but that’s not what’s happening here. Most people are under the delusion that the BLS report is the govt reporting every job created and lost, and are thus easily swayed it’s rigged when it suits their political ends.
This is almost laughingly misleading, as it leaves out everything before the letter.
▪️After being repeatedly lampooned by the Smothers Brothers over Vietnam, Johnson finally had enough. One night at 3 am he called the head of CBS William Paley, demanding that he “get those bastards off my back.”
▪️Paley then asked the heads of CBS entertainment to get them to back off of LBJ. However, instead of backing off the Smothers Brothers doubled down, booking a folk musician performing “Waist Deep,” an anti-war song about a soldier being stuck in the mud while “the big fool says to push on,” clearly a dig at LBJ.
▪️At the last minute, CBS cut the song from the pre-taped show to the outrage of the Smothers. They continued to push the boundaries off and on for the rest of his presidency, with CBS sometimes cutting segments that they thought went too far. Basically, it was a soft form of censorship.
▪️It wasn’t until Johnson made his surprise announcement not to run in 1968 ...
