Quote:
Originally Posted by BrianL99
I'm afraid that's not an accurate statement.
The USA operates on a Deficit Budget, which means every dollar it spends, has interest attached to it (it cost money to borrow money).
A Student Loan is not much different than a Mortgage Loan. You borrow the "principal" (which has already been borrowed by your lender). You pay back the Principal & the Interest, over 30 years ... just like a student loan.
There is no such thing as "extra interest".
The US Government BORROWED the money they gave out for student loans and has been paying interest on that money, since the student borrowed it from them. "Forgiving Loans/Interest" cost a fortune.
If you have any doubt, call your bank and ask them if they'll "forgive" the interest on your home mortgage. Let me know how you make out.
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I am sorry you do not understand how this program works. Your home mortgage comparison is apples to oranges. "not much different" as you put it IS different. A bank is a for profit entity.
1. Not every student loan qualifies. 2. the student loan has to have a minimum of 20 years payback history. 3. 100% of the principal must have been repaid. 4. The Government BORROWS the money at a lower rate than it charged for the loan. Translation: the government made money on the loan (Profit). In these cases...20 years of profits! 5. The government is only forgiving future profit from the future interest.