« on: April 29, 2006, 07:04:11 PM »
That has to be the stupidest chart I have ever seen in my entire life. First, anyone who took out Stafford loans, either subsidized or not, after 1998 but prior to the rate increase for this current year is probably looking at an interest rate of 1.62 to 2.67%. That is below the rate of inflation so you would actually loose money by paying of those loans early.
Stafford loans that are below the inflation rate should be paid off over the longest period of time possible, probably 30 years considering a aggregate loan amount of 60,000.
Second, if you are making a "massive" salary and still renting an apartment to pay off loans you are a fool. Even in a large city with a high cost of living, building equity in a home is more important than making extra payments on a private student loan with an 8.50% interest rate.
Third, that chart isn't even remotely accurate enough to give a student an idea of how long it will take to pay off student loans. The fact that some incoming BYU 1L might think he or she can pay off 24K in debt in 1.3 years is blasphemy. Any chart whose living expenses are only a cheap apartment in a mystery city and bus tokens is complete garbage. How about a few expense of the top of my head:
401(k)/IRA or other investment contribution (I would hope at least 10% or gross pay), heath insurance (also significant, especially for an equity partner), phone, electric, cable, oil or gas heat, clothes, food, work social events, family.