Did she willingly enter into a contract to repay these loans at the terms she’s living with now? If not, then it is illegal. If she did. It’s just bad decision making.

It’s not the annual interest payment, it’s the fact they setup loans where the principal balance hardly goes down. Imagine if she paid $1000 instead of $900 every month, the balance would be reduced almost twice as fast. That’s the scam. The law should require payment terms that pay off the loan in reasonable time.

Schools should be required to backstop their degrees with some form of monetary guarantee. If the degree is worthless they should have to reimburse you. This would stop all of this fraud from academia.

It should be illegal to not allow for bankruptcy. Allow bankruptcy and you stop the gravy train for the banks.

Amortized interest payments. Is this not taught in high school? What are we doing? This is exactly how mortgage payments work as well. If you pay the minimum payment, you will pay a ton of interest. If you kick in a couple hundred extra dollars each month, you will drastically reduce the amount of interest you will pay over the course of the loan.

I pay $900/mo. for car insurance. The balance NEVER goes down and if I unfortunately need to make a claim it goes up from there.

Just declare bankruptcy and take the money you make over the next seven years rebuilding your credit and put it in tesla stock

They should cancel the interest on those loans. That is predatory interest and I’m sure the student had no idea that it would be like that. Be upfront about what payments will be and how long they will be paying.

Remind me again, who was President when student loans were federalized? "The federal government fully transitioned to a direct lending model in 2010 when the Health Care and Education Reconciliation Act ended the FFEL program, requiring all federal student loans to be issued directly by the Department of Education through the Federal Direct Loan Program. This effectively federalized the entire federal student loan system, eliminating private lender involvement in federally backed loans."

It's called an amortization schedule. For god sakes, if you have a mortgage, don't look at how much you're paying in interest in the first 10 years. You might die of shock. To have a college degree, be "educated", and not understand the financial situation you are in is sad.

Basic Education is illegal in America

I’m not at all for “forgiving” student loans. However, the interest/principle ratio is obviously designed to lock people into many decades of debit. Kinda makes a person look at historical data; and, find out that debit-based financial system always ends with 95+% of the population destroyed financially. Then, the next understanding is, “why do we pay a Private Banking System for a Country’s Right to create their own Money!?? Oh…….. wait… no Country has Money, all only have Currency, designed to loose value EVERY YEAR!!! Every year, the citizen’s saved value, is designed to be worth less!!!!????? Slowly people are understanding. Countries should ALL have Money, not a by design deflating Currency! Once you are tired of the dollars in your pocket buying less and less every year, you now know who to focus on. A Banking System the illegally was created in the US in Christmas Eve in 1913, and NEVER a ratified Admendment!! Takes 2/3’s of states voting to pass a new Admendment; the Fed Reserve needed that to be legal, never passed that threshold.

They front load those payments with all the interest first- just like a mortgage so the bank gets their interest regardless of whether you pay it off early or not. It is a scam.

Damn straight, it should be illegal. The banks should not be involved and the government should loan directly at a lower rate. We have the technology to do it very easily. Then the minimum payment should be half to the principal and half to interest minimum.

I’m not for bailing them out. However there should be a cap on the amount of interest that can be collected.

Who spends that much on tuition? My in state tuition in total when I went to school from 2001-2005 added up to $18,181. If you’re spending $100k on school you should be working in a field where you earn a 6 figure salary. I’m talking doctors/lawyers. If you’re spending that much for some BS English or Women’s Studies stuff you deserve the debt.

I borrowed 12k, quit school around 60 credit hours. Had some rough 20s and I now owe 27k and have paid back 13k through tax refunds. Take note that they can keep 30% of that for collection fees. I borrowed the money and I will pay the debt but I was not ready for it.

Who signed for the loan?

8.5% interest on a large sum of money is a lot of money. This is one reason student loans need to be made bankruptable again with the school on the hook for ~80% of the balance. It’d lower tuition and force better schools.

8.5% interest is perfectly reasonable. She overpaid for her education tho.

All amortizations work that way. You pay the interest in the remaining principal and once more and more payments are made, more money starts toward principal. If you look at the back end of the loan payments they will mostly be principal.

x.com/i/grok/share/ H3qWfQt9afaogPACyelXxigTW Considering this would be an unsecured loan, 8.95% is pretty reasonable I think. This girl obviously has no idea of how loans work. Initially most of the payments go to interest. So it’s important to try and pay extra early on.

8.5% of $100,000 is $8,500. You know... nothing weird about how that works. She has a lot of debt, and if she wants to pau it off, she needs to pay more than $900 a month. Its not that complicated. When I had a $150,000 30 year loan on my house, the mortgage payments was around $1450. I didnt want to have the loan for 30 years. So I paid about $3000 a month. It got paid off pretty fast when I was making big payments on the principal, and not just nursing the interest forever.

It should be illegal to accept the terms of your loan? No. Don't take loans you can't pay.

Ever looked at a mortgage amortization schedule?

That’s basically how a mortgage works. Here interest rate is about 8.5% from the numbers you quote. The real point - education is too expensive in this country.

Annual interest rate for for American student debt is 6% to 8% per annumn (from google). So let's say 7%. At 100k debt her interest is roughly 7000k, so you have to pay substantially more than 7000k per year. $9900 is better than some people but it won't cut it sadly the interest is too high. It needs to be closer to $1200 a month. Students should be substantially reminded that their degree must have a return on investment prior to committing to a loan. Average US inflation rate over the last 5 years is ~4%. I think with these tuition rates they should cut the classic 4 year degree into 2 parts. This would allow students to deal with the loans in more reasonable parts and see if their degree can get a return on investment or even an interview.

You, nor her, understand how interest works when you make minimal payment amounts. If the balance isn’t dropping fast enough, then the payments are too low. It’s been a thing forever on loans.

Everyone knows that loans are structured so that at the beginning of the loan you are paying back interest and not on the principal.

Certainly the terms were disclosed at the time of the loan. Perhaps if the kids had a high school economics class as requisite for graduation, they'd not be surprised later.

What should be illegal is the government funding stupid degrees. Zip zero risk assessment for repaying loans. The whole model needs to inverted…trade skills should get the 4 year degree and liberal arts majors should get the 2 year degree. Eliminate 90% of Masters, Doctoral and Post Doc degrees for liberal arts.

All that college and nobody taught her how a loan works with compounding interest? Fascinating

For context a secured loan for a new car from a bank. **7.09%** This national average APR for a 60-month new car loan reflects Bankrate's weekly survey of the 10 largest U.S. banks and thrifts as of November 5, 2025, and applies regardless of the $100,000 loan amount (which is feasible for luxury vehicles). Rates can vary by credit score—e.g., 5.27% for superprime (781+) vs. 6.78% for prime (661–780) based on Q2 2025 Experian data—and individual lender offers. For comparison, Bank of America advertises rates as low as 6.04% for qualified borrowers as of November 6, 2025. Shop around with multiple banks for personalized quotes.

She’s stuck. $900 is a lot of money for a payment from a recent grad so the chance of increasing that payment is probably not good. It’s a real shame. They should save as much money as possible before going to college. Even if they delay entry. I did that for two years and was able to pay about a year and a half of my four years. Then worked two jobs to pay the rest. But I had no debt.

That's why you shouldn't sign a contract, especially a loan that you don't understand. It would have been a lot cheaper to learn a trade which could have got her a better paying job and no loan to pay off.