Comments on: Student loans cost increase http://www.deansas.org/blog/2009/05/20/student-loans-cost-increase/ Tappity tap tap Sun, 04 Jul 2010 21:33:33 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Andy http://www.deansas.org/blog/2009/05/20/student-loans-cost-increase/comment-page-1/#comment-38788 Andy Fri, 22 May 2009 14:25:11 +0000 http://www.deansas.org/blog/?p=599#comment-38788 Effectively what the Govt. is doing is putting a lower cap on the rate, however there is no upper cap. When interest is high Students had to accept that rate, now the rates are low (negative in fact) the government overrides the normal calculation method to be more beneficial to it self. Worse still the Govt. is responsible for causing this deflation in the first place!!! Effectively what the Govt. is doing is putting a lower cap on the rate, however there is no upper cap. When interest is high Students had to accept that rate, now the rates are low (negative in fact) the government overrides the normal calculation method to be more beneficial to it self. Worse still the Govt. is responsible for causing this deflation in the first place!!!

]]> By: Dean http://www.deansas.org/blog/2009/05/20/student-loans-cost-increase/comment-page-1/#comment-38787 Dean Thu, 21 May 2009 22:22:47 +0000 http://www.deansas.org/blog/?p=599#comment-38787 <p>Sort of. It's a bit weird to get your head around, and perhaps I haven't explained it very well.</p> I'm suggesting that the effective (not the actual) interest rate ought to remain at 0%. The idea behind student loans is that the amount you pay back is the same as the amount you borrow taking into account inflation. Perhaps an example is in order: You borrowed £5 from a friend to buy 2.5 pints in 2005. It's now time to pay him back, £5 will now buy two pints, do you owe him 2.5 pints or £5? In the case of student loans you owe him 2.5 pints. So you're paying back the real value of what was borrowed. The current case is that you borrowed £5 to buy 2.5 pints. It's now time to pay it back, £5 will now buy three pints. Do you owe your friend 2.5 pints or £5? Following on from the rules above you should give your friend 2.5 pints. The government says you owe £5. Sort of. It’s a bit weird to get your head around, and perhaps I haven’t explained it very well.

I’m suggesting that the effective (not the actual) interest rate ought to remain at 0%. The idea behind student loans is that the amount you pay back is the same as the amount you borrow taking into account inflation.

Perhaps an example is in order:

You borrowed £5 from a friend to buy 2.5 pints in 2005. It’s now time to pay him back, £5 will now buy two pints, do you owe him 2.5 pints or £5? In the case of student loans you owe him 2.5 pints. So you’re paying back the real value of what was borrowed.

The current case is that you borrowed £5 to buy 2.5 pints. It’s now time to pay it back, £5 will now buy three pints. Do you owe your friend 2.5 pints or £5? Following on from the rules above you should give your friend 2.5 pints. The government says you owe £5.

]]> By: Anonymous http://www.deansas.org/blog/2009/05/20/student-loans-cost-increase/comment-page-1/#comment-38786 Anonymous Thu, 21 May 2009 21:57:26 +0000 http://www.deansas.org/blog/?p=599#comment-38786 Are you trying to suggest that the government should be paying us to borrow money? If I misunderstood, I apologise. Are you trying to suggest that the government should be paying us to borrow money?

If I misunderstood, I apologise.

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