The U.S. Department of Education announced Tuesday the interest rates on federal student loans for the 2024-2025 academic year.
The interest rate on federal direct undergraduate loans will be 6.53%. That’s the highest rate in at least a decade, according to higher education expert Mark Kantrowitz. The undergraduate rate for the 2023-2024 year is 5.5%.
For graduate students, loans will come with an 8.08% interest rate, compared with the current 7.05%. Plus loans for graduate students and parents will have a 9.08% interest rate, an increase from 8.05% now. Both of those rates haven’t been as high in more than 20 years, Kantrowitz said.
The rise in interest rates could complicate the Biden administration’s efforts to get the student loan crisis under control and relieve borrowers of the pain of interest accrual, experts say. Even as millions of people have benefited from recent debt relief measures, new students will be saddled with more expensive loans for decades to come.
6.5% is (edit) nearly higher then mortgages. (Looks like Mortgages are about 6.5-7% right now. lol) Might be cheaper to become a landlord then to go to school. Really pushing the downfall of society with this one.
Nearly 10% is getting into loan shark territory.
it's absolutely cheaper to be a landlord.
the barrier is having a pile of cash or some asset worth a pile of cash. if you have a pile of cash and you are current on any debts / have a co-signer, you can borrow against your existing assets to buy more property and collect rents to cover your payments/interest, cost of maintenance, and a personal income for yourself.
even if you don't want to handle any of the lease signing, tenant issues, maintenance hiring, etc, you can hire a "property management" company and pay them 10% of the rent collected to handle all of it. large/significant improvements would have to be financed by you, but if it's a livable structure that meets code, you can just sit back and do nothing while taking in 90% of the rent.
additionally, in our ongoing housing crisis / property hoarding situation, even though you haven't paid off the loan to buy the residence, it's net worth will grow beyond the original purchase price and let you access more credit to purchase another property.