What is the APR on that "only 10% of your income?" It isn't really "generous" if 10% only ever pays the years interest without repaying the original sum.

In the UK the interest rate is 1.5%. You're forced to repay a minimum based on your income. Below £17,335 (approx. $26,500) you pay nothing, and as your income grows as does the minimum repayment (so people making more repay faster).

PS - UK University is also much cheaper. It varies by course, but £9K/year ($13.7K) is typical. If I look at the first State College on Wikipedia (University of Alabama) $19,652/year (based on 4x semesters, inter-state resident) is what they charge. Then there is other fees: $325 mandatory dining fee, $400 enrollment fee, $100 parking, and so on. I've also heard that a US student pays $1K in books (!) which is insane (I purchase three books total which cost about £200 over the entire course).

Interest over your payments are waived for the first three years, after that it is capitalized. After twenty years, ten if you work in the government or charitable sector, the remaining balance is forgiven.

The current interest rate for new undergraduate debt is 4.29%.

You're taxed on the balance as income. It's easier to negotiate with the IRS, though.

There are regulations that say the public service forgiveness (10 year) is not taxable income. The ordinary forgiveness (20 year) is taxable under current law, but IBR/PAYE hasn't been around long enough for anyone to have triggered it yet. There are proposals to exempt it.

When the Fed is giving away money at 0%, charging 10%, 7%, 5%.. does not seem generous.

Very generous compared to what, any other federal student loan system? Its extortionate when you compare it to similar countries, think 30k for a 4 year engineering degree with interest at CPI - or in many places free.

It isn't like he didn't know how much money he was borrowing when he took out the loan. He wanted something, so he took out a loan to get it. Regardless of what it is for, he made a deal.

> If you have federal student loans this is shitty advice. The loan payment programs are very generous.

The author appears to have private loans, which are much more burdensome than federal loans for the debtor[0].

This is why federal loans are said to be subsidized and are counted as financial aid, even though people sometimes complain that it's "not really" aid because you have to pay money back. It's aid because the rates are well below market rate, which means the government (acting as a bank) would expect to make a loss on all loans issued, as the number of people who default would outweigh the amount of interest collected on the remaining loans.

[0] Also, only undergraduate loans are subsidized - graduate loans are not usually (never?) subsidized.

The private loans were still backed by the feds which is why the DOE was coming after the author. Writing student loans was a nice guaranteed profit for a while (it changed in 2010 when they started cutting out the middle man).

> the government (acting as a bank) would expect to make a loss on all loans issued, as the number of people who default would outweigh the amount of interest collected on the remaining loans

As far as I know, you can't get out of paying a federal student loan even if you file for bankruptcy.

What's the real risk of loss on student loans? The people I know who defaulted all paid in the end, plus interest and penalties.

> I would also add that there are significant benefits that follow from keeping one's word, from not defaulting on the obligations one chooses.

Tell that to companies.

How many people, during the credit crunch, had their house defaulted on even in spite of never missing a single payment? The bank just decided the physical property was more valuable than the debt, and kicked them out.

I will absolutely keep my word when dealing with other people. I don't care about companies and businesses, because they are amoral and I will be amoral towards them. You're a fool if you treat companies like they're people, they don't treat you that way...

> How many people, during the credit crunch, had their house defaulted on even in spite of never missing a single payment? The house just decided the physical property was more valuable than the debt, and kicked them out.

>

Are you saying people paid their debt, but the bank was still able to take property the borrower owned? Can that actually happen?

Any sources where I can read more about this?

Generally, no, it can't. Mortgages are contracts. By their typical contract terms, the lender can't foreclose unless the borrower is in breach of the contract. That means falling behind on payments. Could you write a custom mortgage to allow the lender to foreclose anyway? Sure, but then the problem is whether it would be securitizable or in compliance with local law. Unlikely, thus, a bank would not do that. The average mortgage and note are form contracts with some variation, but not this 'steal your house' term.

Parent post also implies that during the foreclosure crisis the value of houses increased. The opposite occurred.

> How do you square these two claims with the fact that "business" is just another name for a collection of people who have decided to work together to achieve some outcome?

Have you ever tried to sit down and have a nuanced conversation with a mob? Or given a speech in front of an audience? Those are both pretty loose, flat organizations of people and they behave radically differently to an individual (and to each other, though one can sometimes change into the other). A company is a much more complex structure that absolutely deserves different treatment than an individual.

Surely you understand this. Have you never, or would you never be friends with someone who worked for a company you didn't like? Clearly there is a difference between an organization and the individuals who compose it, though the distinction is fuzzier in your case since presumably the corporation consists solely of you. I suspect that your corporation is also less likely to engage in the kinds of amoral hanky-panky that the large organizations get up to.

Mob, audience, company, business, corporation, etc. All are concepts that have individuals as an essential element of the concept. None exist as tangible entities in the real world. For example, you can't point to a mob without pointing to the people who make it up, and neither can you point to an audience without also pointing to the people who define it.

The argument is not that these entities should be treated equivalently, but rather, whether an individual should drop considerations of morality in dealing with them.

The morality that I follow (rational egoism) serves my life. It's not a hindrance, but a help. Morality helps me achieve the things I value; it's not a millstone around my neck.

I don't agree with the advice that when I'm in some particular context I should throw my morality overboard, which would be tantamount to saying that when dealing with companies, or mobs, or audiences, I should act irrationally.