@@TheRealAuroraEmily Saying student loans are a scam is misleading given the example you presented. Of course if you don’t pay your minimum you will owe more!
I really want to report this for misinformation. Your example is deceptive. No way that $200 is minimum monthly payment on loan you describe. So, OF COURSE if you aren’t making your minimum payment you will owe more. A student loan is no different than any other loan. Pay it according to the terms. If you don’t like the terms don’t take the loan.
Loans, doing taxes, managing money in general should all be taught in school 100%. I’m 20 years old and I learned the quadratic formula 6 years ago. I have not used the formula in 6 years and probably won’t use it much for the rest of my life...
Yea I’m sure you did compound and simple intrest in math along with that, school teaches a variate of things for all different carriers some information might not be applications your future but you might be to others and at that age you can’t be sure what you want to do so you learn it all. Second the reason simple math is taught is not because math is important knowledge rather it builds critical thinking
Seeing this make me feel really grateful to be born in a country where it's still considerably easy to apply and pay for college without having to get a loan. There are a lot of scholarships with low requirements.
Never taught Interest, Loans, Mortgage, Purchases, Money Averages, Taxes, Bills, Payments, Money handling, expenses, Self Employment, Tax Brackets - so just the basic life stuff…thank god I know about Pythagorus’ Theorem though! I can safely say that I’ve learnt much more ‘life-handy’ information from UA-cam videos than school. And I paid a lot of attention in school…
I'm very grateful that we actually got taught lots of useful stuff in school like this. Far from perfect, we could still lesrn how to do our taxes n stuff but personal finance they nailed it down in school in Austria.
The funny thing is we were taught this, i remember learning about compound interest. What the school system doesnt do but should is always relate real world examples to the math. Some kids aren't as smart (or at least i wasn't) and cant relate therefore we forget these things we were taught because we deem them unimportant. Edit: changed teachers to school system
It wasn’t “taught” it was mentioned! Much like slavery and reconstruction, you are not going to be given any real world applications, or enough information to relate it back to your own life. Both omissions perpetuate racism and inequality.
Yes, they used to teach that in school. It’s not just “student loans”, but that is how “Interest” works. It works the same if you are saving and earning money on Interest.
@@evelynabrahamwesley2809 They didn't stop. I don't know why he said, "they used to" because they still do. If you are educated in the U.S. at some point in high-school math you will be taught the formula for simple interest and compounding interest. They won't tell you to make wise financial decisions but definitely are taught the formulas to figure out how much you'll pay in interest. Most loans actually breakdown the amount that goes towards the principal as well as the amount from each repayment that is towards the interest. The total interest paid at the end of loan period is shown when you accept the loan terms. You actually don't even need to be taught how to calculate it. She's just a idiot.
As someone looking into a degree that could easily get into the 6 figures in terms of debt. What advice would you give for student loans of that nature? Looking back would you have done different?Anything? Student loans are by far one of the greatest problems in America.
Be sure there are actually jobs available in that field. Intern in that field or get some experience and be 100% sure you actually want to do that thing before you start school.
3rd year med student here. I chose to apply to NHSC's scholarship program which covers your tuition and offers a monthly stipend. It's not the same as HPSP which is tied to the US military. NHSC's deal is that they'll cover you as long as you dedicate yourself to FM, IM, Ob/Gyn, or Psych and work 2-4 years at a health-professional shortage area, which could be a lot of places you live near, not just rural. Downsides: specializing becomes a real challenge. It will require going back into a fellowship you desire AFTER completing your service term and competing with fresh residency graduates. Also, it's a binding contract so no one should apply unless they are 100% certain they will abide by all the rules. Read the scholarship program guidance completely. Upside: you will not have a dollar of debt out of med school.
Attending physician, and medschool asst. prof here. Read the fine print extremely carefully. I've watched this exact program not live up to its promises. On top of that, the work you do in the undeserved area might pay you very little. Speak with your counselors and mentors in your medschool before committing. I hope that, whatever you choose, it works out.
Same for me. In my country we don't really have student loans, so many students just apply for this kind of program and after the uni they are sent to some regions, where doctors are needed and work there for 2 years. If they want to stay for longer, they are provided by an apartment and have a higher paycheck
@@senseiturtle you're right I have seen stories of where this goes south, and I absolutely expect to be paid less working at those HPSAs for 4 years. However, slightly less pay for an extremely finite amount of time is far better than a lifelong debt
@@senseiturtle tldr backing out of the contract is a massive problem. It could cost you $1M+. If you choose to commit, it needs to be a deeply deliberated choice as you'll be signing a binding contract.
We literally taught this information in Freshman Seminar, as does thousands of colleges. College professors and instructors want their students to be informed members of society. We prefer an educated public to an uneducated one.
Granted interest was taught in school it wasn’t taught in a way someone would actually use it in real life, it was taught through some booty cheek math classes
I went for bachelor and masters degree in arts and I was able to pay for all of it plus room and board by working a side job after my classes. I love Europe
@@whatisrealknowtheformula6137 Hey but you have real Freedom given to you by the US constitution! Sadly most lack the currency that grants freedom. That’s right not your constitution is freedom money is. Without money you’re worthless. Thats what they tell children when saying be good in school. Without huge money reserves which „work“ for you passively in some investment portfolio and generating interest. Which is basically the labor of all working people. Let’s be real money cannot work ever tried giving the old Franklin a shovel?
Not to mention, being a Dr you have learned how to keep yourself healthy so that you can live and work longer, thereby earning much more than someone with a high school education. A good education teaches you how to keep adding to your knowledge base and also how to apply that knowledge yourself. As doctors, they have to be good examples to those for whom they care. That said, there are ways to pay more towards the principal and push down your interest. Not to mention refinancing once you have better credit scores. Investing and having a retirement account are a must from day 1 if not earlier.
@@iamrobot396 Wondering, what would you recommend a guy who doesn't want to go to law or med school, but fears the inevitable outdating of tech degrees?
@@elken16 Except that the job is pretty tough on healthcare workers, so knowledge of keeping one healthy. Working night shift and getting bad sleep almost guarantees heart disease
@@chrisjohnson7872 Get a trade. To do it all over again I would be an electrician, it easiest on the body. Then plumber, carpenter, welder in that order. Get into a union with retirement plan or after you are experienced start your own business. BTW I'm an auto mechanic, turned shop owner, turned real-estate investor.
There should be a class that gets students learning how paying taxes works, government forms, bill paying and even help them set up a student credit card once they are seniors. Also prepare for how to find a rental safely and what paperwork goes into that, renter's insurance etc. Basically how to be more independent and deal with adulthood. But the credit card is kind of a big one. Because if you don't get a credit card by the time you finish college, you will likely be unable to get one without jumping through major hoops and spending money. This will make your life difficult when it comes to renting, buying, certain utilities companies etc. I am 27 and still have no credit score because of this issue. It can be very frustrating.
They should teach Americans to start refusing to accept those outrageous student fees. It makes no sense to start your adult life with that much debt. It doesn't benefit, the person, the community, the country. Only the banks.
When I was a kid my mom drilled it into my head to always pay more than the minimum on any debt, even if it was only $5 more and holy crap that has saved me so much anxiety! I’m dealing with student loans too and even at my absolute brokest points I’d pay an extra $10/month and looking at this math I’m thanking my lucky stars I did because I’ve had my loans continually go down as I pay on them more aggressively.
If you don't mind me asking, what do you mean about "always paying more than the minimum"? I'm about to graduate college in 5 months and I've heard people say that but never explain what that means. Do the loan company give you a certain amount to pay every month?
@@jeremiahborders2959 yeah they do. The thing that most loan companies (sharks) neglect to tell you is depending on the terms of your loan and how the interest is calculated, your monthly minimum is paying on the interest and may not even touch the principle(the money you actually borrowed). So in theory you could spend the rest of your life paying on interest because you’re not paying off the principle. When you pay more than the minimum, that over payment automatically goes towards that principle which in turn lowers the amount of interest that can accrue. If you look up amortization tables that can help you get a visualization of it and plug some numbers into repayment calculators online. They can show you how much time and money an extra $20 over the minimum *really* adds up.
@@jeremiahborders2959 Yes, they tell you how much you’re supposed to pay each month. But don’t listen to their numbers and pay more. Even just a little bit more if you’re in a touch spot. It will go down.
Or do a huge lump sum principle only payment, and specify this to your lender it is principle only, paying the principle only means they can not charge interest on what you paid off in the lump sum payment which reduced interest and for me when I did this also pushed my due date back, when I paid mine off my due date was 2 years into the future meaning if i could not pay for what ever reason, there was nothing they could do until those 2 years came around 😀
You can learn these things though. Maybe if you were an adult 40 years ago, then it might be hard. You are using UA-cam. There is no excuse why you can’t teach yourself these things. If you are able to use the internet to look at videos, there is no reason you can’t learn how to take care of your finances.
Yeah, between my wife and I, our minimum payments is like $1k in total every month. Definitely didn't think monthly payments would be that high but it is manageable for us at least.
That means you’re not paying enough installments every month, you should always pay more then just the interest so you can pay less and less on interest and clear off your principal eventually
It depends on your job. Getting a degree does not guarantee you a job as before. Even if you have a job, it might not be extremely well paid (specially at the beginning), then you better stay single, once you have kids, you have other money priorities adding up. My doctor friend has a loan of 500 000 $ (bc medicine studies take a loooong time) and even if she pays a lot and has a good salary, her debt keeps adding up. I was accepted at a very good university in the US and they ask me 50000 to pay the tuitions for 1 year... even with the scholarship i got, it was impossible to pay. I decided to not attend that university and to study in France and I am happy to start my life without loans. So it is not as easy as “pay more”. Plus, she is only giving an example, i am sure her debt is higher and she pays much more that 200$/month
As a mortgage loan officer, I can confirm, interest can be terrible and no one knows how any of it works. I’ve seen people with student loans that started as a few thousand from the 80s and 90s turn into 30K still owed in 2024. It’s awful and student loans are the worst at this
Agreed with the general idea. This would be a good example of line of credit. With loans the payment is high enough that your principal amount goes down month to month. Try changing that $200 to $400. You will see both interest go down (slowly) and the loan that's owed.
To use a simple medical analogy, a monthly dosage of $200/month is insufficient to eliminate the $50,000 condition. The dosage has to be at least $208.33/month to stabilize it! There are all sorts of loan payment calculators on the Internet that let you calculate various loan amounts (total amount to borrow; monthly payments; years to pay off completely; interest rate given loan amount, monthly payment and term, etc.). Conversely, the "magic of compounding" also works in favour of those with savings goals, e.g. mortgage for the house in Malibu, financing to open own practice, retirement, etc. :)
@@Reactionize 176 months at $400/month and a smaller payment at month 177. For the Excel users in the crowd, the PMT function will return the montly payment based on the interest rate, number of months, loan amount, future value (0 in this case), and type 0 (end of period).
@@johnslawecki1448 student loans offered by the federal government to undergraduate students who demonstrate financial need. They start accruing interest the day you receive your loan. So , you have to use compund interest to calculate loans to add more money such as 60,000 and 5 percent interest remain years. It is around like 13-16 years you pays 400 dollars a month regularly and job after graduations .
Yeah, they were paying insufficient amounts with the 200 so of course it's gonna go up, the bank wouldn't let u pay an amount each month that would increase the total amount that's illegal lol
in sweden we have very low interest rates on student loans, it's barely anything. the lowest monthly payment you have to pay is about 60€. also we don't pay tuition. this way anyone can go to college and get an education and it won't put you in crippling debt for the rest of your life
The money is coming from somewhere. Nothing is free. People don't work for free. Im not sure how it works over there but you probably pay higher taxes in something to cover that cost.
@@maxinvasionleet Yes, people in Sweden pay higher taxes. However, the benefits they gain from the government far outweigh what they pay individually. For instance, an average family in the US may need to spend 500/month on childcare, 500/month paying for student loans, and 500/month on child things. That same family in Sweden would pay 1000 extra in taxes, but they also get a child tax credit, so they pay 800. So the American still pays almost twice as much on the same stuff. Numbers are random, of course, but that's the idea.
@@maxinvasionleet of course nothing is free, our social programs and benefits are tax funded. but it doesn't have to come straight from our own paychecks. VAT-tax, import/export tax and corporate taxes are big sources of income for our government. it's about wealth redistribution to help the poor and underprivileged. without that, only rich people would be able to go to college
More kids need to be paying attention to this shit. All my friends went to college immediately when they graduated and changed their majors multiple times, prolonging the amount of time they’ll have to spend in school, and half of them have already dropped out without finishing even an associates butt “it’s the college experience that matters” and were confused that I waited 2 years to fully decide what I wanted to study and then went to a tech school when I could afford it with no loans. Now they’re all stressed about money, and I don’t have the heart to tell them that their money troubles haven’t even started. Bc their loans r still on hold.
They won't. They are more interested i hanging out, making out, and smoking weed. School didn't teach them how to waste years of their lives, but they learned it.
Taking a year off between high school and college should be normalized! Do some soul searching, research, volunteering. I know too many people who realized $20,000+ later that they were not happy with the path they were taking.
Let’s not forget that just with one loan but if you have multiple loans for your student loans like they usually do, this is triple. Paying the “amount owed” isnt enough. You have to pay x2 if not triple that amount to actually make a dent. Thus, this is how they keep you in debt for life.
Most schools used to have classes about “Home Economics” where they taught stuff like this. However, life skills aren’t tested on standardized tests, so they dropped them.
I think that’s just where your from every school where I’m from had home ec in it Edit: I’ve seen the replies and I’m not from America so I think that’s why lol. I’ve done home ec and personally it’s not the best class you do cooking and sewing and all but it’s pretty stressful since most of it you have to be very organized. But some like it
@Josh Sacks yeah. That's what I was about to say. Home ec was for teaching how to use a stove, take care of a baby and sew. Economics is where we learned how to balance a checkbook but they didn't teach us about loans
The sad thing is, stuff like this USED to be taught in school. We even had to take a year of Street Law (ie; knowing and understanding your rights). Taxes, income, interest, understanding how business works.... How to think, not what to think. How to be an independent person. I'd love to see schools go back to that stuff.
It’s not in the best interest of the government citizens to know their rights. That way the people don’t know when they’re being taken away. And it’s not in the best interest of big business for people to understand how business works. So i don’t think anything will change lol.
Schools do teach this. Well, mine did. Graduated in 2015. It’s just a matter of not all schools do. Honestly, back then I didn’t take it seriously even though I was taught. That stuff just isn’t real to teenagers. My teachers did their best to put it into perspective and the problems were fun to work out when they were real life scenarios. Still, there was just a mental block of sorts when I was younger. It just doesn’t seem real when you’re that age. I’m lucky enough to not have debt, but that’s because my mom helped make sure I was debt free when I left school.
I was taught this in school... Ppl just forget because everyone hates math. But i loved math. I never forgot how interest works and its sad that ppl decide to hate math so much that it can really hurt them like this. Forgetting they WERE taught this in school
Personal finance should be part of high school home economics. But that's usually cut from curriculums first. The vertex42 sheets template is killer for listing out and visualizing the scale of PhD level student loans.
Another way to think about it is with buying a car. If you have bad credit or no credit and the dealership/bank is letting you drive off with a $50,000 car chances are you're getting screwed over on interest. Sure you're monthly payments can be $400-$500 a month but a lot of it will be going towards interest and in the end you will have paid $65k for a car that is now worth $20k after 6-7 years
Funny story of mine: Obviously, at age 17, I had no credit, but because I knew that I had no credit, I figured I couldn't get a student loan, so I paid out of pocket for school. It was only until a few years ago I found out I could've applied and gotten a loan from the very beginning 😅 But knowing what I know now, I'm glad I never got a student loan. This is the only time being naive saved me from a world of financial hurt lol
In the Netherlands student loan interest is 0.1% Also you pay a percentage of your income, so if you don’t earn a lot because of whatever you pay less per month. After 25 years (or 20) if there’s anything remaining the government just whipes it. Also it only costs 2100 euro per year to go to college, even medicine is the same price. My cousin is a certified cardiologist
I'm going to say something crazy: don't go to school if you can't afford it, or at least if the job you expect out of college can't pay off your debt within a reasonable amount of time. I have no college education and don't have a 6 figure salary. But I'm able to save and invest 50% of my gross income because I have very little expenses and zero debt.
As someone who is pursuing his career in finances I would like to urge everyone to have basic knowledge about finances irrespective of the fields you choose to prosper. Sure you can hire people to do it for you but it would be better if you can do the basic stuff and understand it by yourself, it doesn't take very long to understand and it sure is rewarding.
$200 a month is way to little to be paying on a $50,000 loan. I’m in college making $200 a week payments on a $6000 loan and even that seems to be going pretty slow. I get your point though interest is terrible.
No one sets up their loan this way. Usually monthly payment is higher to make sure your loan amount goes down. Otherwise you would be paying this for rest of your life. Literally no one does this...
@@05khanha I understand, makes sense. I've seen people mentioning on social media their overall debt from college + med school is on average 250k+ so the monthly payment would have to be quite a high percentage of their cca 5k a month salary. As someone from EU with a government funded tuition I feel like a spoiled brat in comparison ngl
@@physicianskitchen I think that I saw a TikTok in which FootDocDana said she had about $500,000 in student debt. To pay that off in 10 years at 5% interest she would need to pay about $5000 per month. In the U.S. a podiatrist earns an average of $212,000. She hasn't been practicing for long so let's put her at the bottom quarter making $175,000 per year which makes her gross monthly income of $14,600. If she has an average mortgage of $1,100 plus say a car loan of $600 her total debt payment would be $6,700. That would give her a debt to income ratio of 46%. That is not a crippling debt level, especially if you are a high income earner and have growth potential.
Look…democrats have figured out a way to keep you indebted to them. It is called student loans. They are not bankrupt-able. They keep you in debt to the government while their powerful teachers unions and higher education system raise the rates. It is a self licking ice cream cone. If they can’t register you to vote at 16, putting you in their debt is the next best thing.
She’s just explaining how any loan with interest works. The example she’s using, is giving way too low of a payment for a $50,000 loan. If you bought a $50,000 car your payment would be around ???? not 200.
While I agree that 5% interest is pretty high.. 200$ a month on a 50k loan is way to little. Even without interest you'd be paying over 20 years on that. For a 50k loan I'd expect something on the order of at least 500-700$ a month to pay it back in a reasonable amount of time.
Most students can't afford $700 a month while going to school. Once they graduate and get out in the workforce, maybe. But you can't expect a full time student in demanding courses to be able to afford almost $1,000 per month....not everyone has their parents money to pay their way 🙄
@@blueeyedbatman usually how student loans work is that you get them while you are a student and pay them back when you have a job after your studies. I only paid back the monthly interest while I studied (which slowly increases while you draw the loans) and once I was done and got a job I lived cheaply and paid back 1k a month for 40months... No parents involved. If you pay 20 years on those loans you're paying in this case here almost double because of interest, which is crazy.
When I went to high school in the 1980’s classes called “Careers” and “Personal Finance” were social studies requirements. The Careers class required us to learn our Social Security number and taught us how to fill out a 1040-EZ form (amongst other things). The Personal Finance class taught a lot of this useful information that everyone should know when they leave high school but is now expected to be taught at home in the name of having a “more rigorous” curriculum. So, we may have kids who will succeed more in college than in support themselves independently, with our without a college education.
I'm actually very jealous of your Excel skills. Also, in New Zealand, our student loans come from the government and are 100% interest free. You only need to pay them back when you earn more that $19k a year, and the payment comes out of your wages automatically at a rate of 12%. Depending on your/your parents income, you can also apply for living costs of about $250 a week which come out of your loan and need to be paid back, or if you're in the lower income bracket, you can apply for a student allowance of $275 a week that doesn't need to be paid back. It's wild reading these comments and seeing how different student loans work in different countries and it's making me feel extremely lucky to be in NZ
Student loans, at least a massive majority of them, 92% last time I checked, come from the government here too, plus state universities and community colleges are subsidized by the government. What a lot of people don't understand here is under Obama, when the affordable care act was passed, one of the gimmicks used to not make it look as expensive as it was, was to earmark federal revenue on student loan interest to be spent on health insurance subsidies and Pell grants, which are grants for low income people to have their college paid for. So in other words, with our screwed up system, student loan borrowers who may be struggling to pay their own debts are doing so partially so someone else can get their college paid for by the government lol. Its so dumb I wish I was making it up, but that is how "progressives" in this country work, they just count on people being ignorant to the ways their "progressive" policies screw them over....and well, its working.
@Made in Italy ASMR Official this year I’ll make about 260k . Worked about 7-8 months out of the year . I’ve made 400k working 10+ months a year before . I pipeline . I’m a welder and run my own welding truck . The money is out there . You just have to work hard for it and takes time to get there . It’s not a easy life though . You live out of a suitcase . But if you are smart with your money . The time you do have off I dedicate it to my family and enjoy the better things in life and not stress about day to day bills .
@Made in Italy ASMR Official does the average college graduate make that? I think you'll be surprised to find the average skilled tradesman might make more than your average office job.
If the monthly repayment was $10 more and made at the beginning of the period, and with interest being charged at the end of the period, which is when the interest will be charged, the principal loan amount will decrease.. in this scenario, the loan balance at the beginning of month 2 would be $49,997.46 (decreasing slowly but surely)
Or you could work during school and pay some off as your go while there is no interest and then use the 40k or so a year from residency saving 10k or so and putting that towards it per year and then make 3 and 4+ times more than anyone else will ever make after that so the 2k a year in interest is legit 100% irrelevant either way
@@Andrew-hx9tz doctors cant work through school. They courses are already to rigorous to have any personal time let alone a job. Then when they get residency which is 2 years of 60hr weeks unpaid... Again it's really difficult to work. Hence why they can't stay paying their loans until after residency when they get a job. Which is 2 years after schooling
@@nataliearciniega2103 doctors are irrelevant though. They can easily pay back their loans and will be top tier earners for the rest of their life. You have to understand even if your interest rate is AWEFUL you will ALWAYS out earn your student loans. You just cant het a house in a major city and a new car and fancy things at the same time when you first start getting payed. Its not that complex. Doctors make millions more than the average in a life time. Their 250k student loans are irrelevant. They are the last people that need student loan help. Also you have 4 years before things get that rigorous and even then people still work at the same time as med school
They aren’t a scam. They just aren’t for everyone. And every major isn’t one that promises a good job outlook. Masses of people who didn’t take school seriously and didn’t take employable majors will suffer from them!
They have courses to teach you these things like money management and finance, BUT they won’t tell those courses exist unless you’re becoming a financial agent. Or that they say “You don’t need to learn this [blah blah blah]”, when you do. That was my school, they would gaslight you and they don’t even know how to guide you at all. The counselors were liars too…but that was my school
Exactly! At my highschool I was required to take about 3-4 years of art classes in order to graduate but yet the financial literacy classes were optional and not required to graduate, doesn't make sense.
@@shady610 because for them its the only way.....education in my country till jr. College is free and after that if ur financially not capable enough government provide half of the college fees . And guess what in my country its very normal for parents to provide their children till they have a proper job...so things like student debt is a term which we never or rarely hear . And i am not alone to think like that ... most of the countries are like this . Americans are not even aware that the are pitiful...ah sigh
@@pinjari6010 College isn't free in your county. Other people pay for it. The school staff, teachers, office people don't work as volunteers. It's not free. Education isn't the only way to succeed or make a career. And making a huge decision to jump into debt suggests they weren't ready for said education.
@@shady610 well atleast our government is using tax payers money for well being of future tax payers so they could pay taxes without any worries not like they are bulding a wall which apparently have no use😇😇
We were required to have a finance class in school for all seniors. Students didn't want to learn. It's basic math, which we all learn. This was taught to us, but many people didn't pay attention because they didn't think it was important until it sunk them, then blame school for not bothering to listen themselves. That being said, anything above a 2% interest rate should be illegal. And student loans shouldn't exist at all. Education should be free.
This is so true I was pretty decent in school but I was still stupid at 18 years old and even 19 through 21 I understood interest but I never realized that it meant you would never pay off the principal unless you paid massive amounts that you couldn't afford
For those thinking about enlisting into the military for free college (For active duty). 1. Look into your job description (MOS) and see if it'll benefit you after your end of service (Infantry usually never find jobs outside secruity work). 2. You can start using your military benefits while serving. You don't have to wait until you finished serving to start your higher education (you can even apply for Fafsa). 3. After you finish your time in the military, you don't have to rush into college. Take as long as you need before deciding what you want to focus on. College might not even a thought for some at this point. 4. For those collecting disability from the VA, consider looking into chapter 31 (VR&E). Bonus tip. While using your post 9-11 G.I bill, consider going to campus to gain your full housing benefits while studying. You only get the national average if online only (when covid hit, all on campus and hybrid classes became online, but the VA continued to honor the on campus benefits). Sorry for the long off-topic rant. Wanted to provide additional information I was never told while serving in the Marines.
They also don’t tell you that student loan repayment (if you already have a degree when you get recruited) is quite taxed and then counts as income 🙃 thought my loans would be paid off my the army. They were inadvertently, through using all of my saved deployment $, but not via the promised student loan repayment. IMO it’s way better to use GI benefits + VA that you outlined.
If you know about compound interest you earn it. If you don't you pay it. The fact you can't get a 10K business loan but can get a 100K student loan at 18 gives you all the info you need to know.
we learned ab loans and interest and credit and all that for a while when learning ab the 1920’s in 8th grade history my 6th grade pre-algebra teacher taught us about credit vs debit cards and dept but unfortunately it looks like my experience is fairly uncommon 😅
That's why you are a doctor and not an accountant. Your monthly payment has to be higher than your monthly interest so that you make some contribution to your principle amount. If you just pay $200 a month, your loan will never be paid off
i'm a finance major and i'm doing everything i can to pay out of pocket so i don't have student loan debt (taking only community college courses for as long as i can, etc). i haven't taken out any loans and, if it ever got to the point where i would have to, i would take a break to save money. i don't want a lifetime of debt for a degree i received in my early 20s.
@@gary4864 don’t know about that. I have a friend who started with $5,000 loan and 10 years later owns $15,000. She had some late payments at the beginning, but her wage has been garnished for last 8 years. And still no progress on the repayment.
@@gary4864 uhh so - it sucks to admit this but I have $72k in loans and my monthly IDR is $50 (Income driven repayment plan) Unfortunately for me, every time the sun comes up my loans increase by $3.76 I’m kinda okay paying. $600 a year on my loans and prioritizing my mortgage - later in life I’ll either use home equity to pay off the student loans or see if the forgiveness after 25 years was just smoke or if it’s a real thing.
@@LisaAllyssa she mentioned in the video that thats how mortgages work. That is not how mortgages work. Regarding any form of student loan debt, I dont specialize or have a license in student loan dept so I cant comment if its correct or not.
@@rivace9849 she mentioned in the video that that's how mortgages work. That is not how mortgages work. Regarding any form of student loan debt, I don't specialize or have a license in student loan dept so I cant comment if its correct or not.
Agreed. I did learn it but not in the situations that I’d actually be using them, which I’d argue would be much more beneficial to everyone moving forward.
@@ktsterlin9304 agreed and kids have short attention spans, and usually don’t know what’s going on. They probably didn’t even know why they were learning about compound interest. They need context and for you to be specific. Teacher: “today we are learning compound interest, it may seem small to you now… and honestly it is… but in a few years when you enter the working world after college if you decide to go there this will help you to know how the future will look for you in regard to debt,” and I feel like if they choose to ignore that… fine you can’t force them. But just saying “this unit we are learning compound interest.” Its like okay… “we just learned y=mx+b im sure this is useless too.” But if you tell them WHY it’s important and the relevance as l well as the risks to not pay attention, I think that’s the first step to help educate kids better. We need to have a more useful and verse education system that will actually be helpful for adulthood. School should be a place to where even if your parents die tomorrow… you at least have the knowledge to survive. If my parents die tomorrow… excuse my language but tf am I gonna do with the quadratic formula? Lol
I believe I had an SAT question about interest. I think people aren't taught how banks/loans work. Minimum payments aren't always enough to avoid interest.
I think parents need to explain things to their kids before taking out a student loan. If you're only paying $200 a month on your 50,000 loan. You clearly aren't paying enough per month. You would be paying that off for decades. Dont get into huge debt to earn a worthless degree. Now she a Doctor. That will pay off in time as she makes more and more money. Collage makes sense for some jobs!!! Key word, some!!! When you buy a house, same, which us why you pay a lot more per month and why early in the loan, most of that money us going to pay for interest. Learn a trade!!!
how do they decide to put only $200? all the websites for every student loan option i had when i was in college calculated a recommended repayment amount that guaranteed this never happens. that value is even set as default if you don’t do anything, everything is explained very clearly on their sites
For me, as I'm doing art classes, it's perspective. They haven't taught a single thing about it and now we have like five assignments on it. It may be considered minor, but perspective is a good thing to know.
Oh she was in the military huh? Yea that was very smart thing to do. I'm planning on going to the airforce myself & knew if I ever did want to go to college the gi bill will pay for that.
Same here. My mom was in the Air Force, so I am just using a scholarship (not a GI Bill, but another military scholarship). I am so glad that I won’t have to pay, since my parents had to pay student loans from 30 years ago until just recently.
I'm not American, but i got caught in that trap for a bank loan. My grandparents ended up paying off the loan, and now i pay them off every month with not interest rate or anything
Let's say you pay $200 a month on a $50,000 and there is 0 interest. It would still take over 20 years for you to pay it off. Paying $200 a month on a $50,000 is just way too little. What you want to do is pay about $210 a month to stabilize the interest rate and pay $600 a month once you find a stable job.
This is just an example of how certain facts turn out ... not a scam. Use increasing wages to pay higher monthly amounts. The rate used, 5%, means $208.33 of interest monthly.
You do not need to know or learn anything other than how amortization works. We all have smart phones that have amortizations schedules built into them very simple. Enter your loan information, including amount, rate, months, and you will see how much you should be paying every single month to pay down not only interest, but principal as well. If you did that you will that 50k requires minimum of $268 a month for this to be paid off in 30 years, the payment would be much higher for a shorter term. What does this tell you? That you are not making a big enough payment to cover even just the interest alone. That is what’s being added every month. Note it doesn’t take a medical degree to know this. I don’t even have a college degree.
As someone from Switzerland this really sends chills down my spine. Education should be essentially "for free", all you should need to do is put in some good effort. A country full of highly skilled people from all fields is a win for the country. I don't get how the US is still so "mighty" while having so many broken elements....
It's not captain Nemo. Will you adopt me, a 28 year old with no career because it's too damn expensive and didn't want to put my parents on my paperwork and now I'm worried about my future?
@@ericfarley1475 Well you gotta live and feed yourself, but that can be done with a part-time job. We have a top 10 world-ranked uni here, which will just cost you a few hundred bucks in tuition per semester, thats it. I would know, because I teach there...
I’m so glad I saw this. I want to go to college, but now that I know this I’m going to be very careful about how I proceed. Thank you so much for sharing this!
@@SgtJoeSmith yeah. My mom does that. I’ve thought of that but I love helping people. And being a doctor is something I’ve wanted to do for a long time. But I appreciate your input! Seriously. I will take that into consideration too!
@@Emma_78 go into military. Be a medic there. Get college paid for to become doctor. Free health care rest your life. Maybe even get to travel to other countries in military to provide medical care to people there. There's all women helicopter medical crews in army. Pilot is woman and medics on chopper are women. You could end up on chopper rescue crew. Talk about exciting job to brag about. Or else coast guard is an option too. Just tossing some ideas out there for you to consider. Navy has Drs on ships. Hospitals on air craft carriers. Maybe you become a doctor on a carrier sailing the globe and taking care of them top gun flyboys. A friends daughter just turned 18 and enlisted in army for medic. Go talk to recruiters for army/ navy/ coast guard etc see what's available and offered now days. Might save you couple hundred thousand in student debt burden and help you develop into a person you never thought possible. Best wishes
Dr. Dana, I remember freshman orientation at U.K. in 1997. The first thing I saw was representatives from credit card companies giving out applications, as if they were tests! Edit, terrible at math, but great at biology, and the sciences. JK
most asians do. i’m asian and my parents and i agreed i would pay for it myself-in order to train myself for the real world and truly understand the concept of money. i think it’s right for students to pay for it themselves and be independent. we aren’t children anymore.
@@misojimo2154 yeah but also think about the amount of stress the students have to go through, plus parents have at least 18 years to save up all this money. I mean this is just my opinion
@@misojimo2154 if your parents are the ones who are pressuring you to go to college then they should pay for it. If not, then they should still pay for it. You may not be a child anymore but they are still a parent and it is a parent’s duty to provide for their kid, no matter what stage in life they are in. Plus tuition is dependent upon your parent’s income if you are trying to get something out of fafsa. Since it’s dependent upon their income, it’s expected that they would pay. If your parents are making over 100k a year then chances are you’re paying full price for tuition unless you get a ton of scholarships. If you’re going to a really good school, then you’re most likely paying $25-35k (if it’s public) and $40+k (if it’s private) per YEAR. So really there’s no way you, as a high schooler, could get that much money within a few years before you even start college, much less if you are in college for 4 years. Best advice, go to community college and get a job and internships over the summer. You could probably pay for a years worth of tuition when you transfer and then you have a much less loan to pay off.
Either way you end up paying thousands of dollars. If your parents pay your college. Then it's your obligation to pay for your kids college, so you still end up having to pay regardless
In the US, government approved loans (the cheapest kind that everyome gets) requires you to take loan counseling. Loan counseling is basically just an over thorough explanation on how loans and interest work. It even advises you to pay interest as you go. You're lack of information does not constitute a scam.
I'm so lucky my school offered a 3 year course during high school called Accounting and Finance. Taught. me about loans, how to budget, how to file taxes, and how to invest and stuff. It was an optional course, and I took it cos I had just moved to australia a year prior from Tunisia, so didn't know how stuff like HECS and credit scores worked. Now I manage my finances better than most of my friends and I help teach THEM how to file their own taxes
Ok, number wise is correct but you clearly don’t get it... in real life you also have to take into account other things. My doctor friend has a loan of 500 000$, even with a good salary, she can’t pay a higher principal than the interest rate bc she has other expenses (kids, health expenses, etc). So yeah, you don’t need to have a math IA to understand she should pay a higher amount per month to cover at least the interest, but you have other expenses and the debt keeps adding up
@@Aryomful what are you on about where tf did anyone mention anything about her life situation. All I did is mention the reason for her loan to go up. What are you talking about not being able to pay a higher principal than the interest per month, that's the point THE PRINCIPAL IS LOWER THAN THE INTEREST RATE HENCE the debt is ever-increasing look random person I can explain it to you but I can't understand it for you.
@@arneshsingh7239 it’s you who doesn’t understand MY POINT. I understand perfectly your basic maths, I am only telling you to take into account other things that are NOT mathematical because it is obviously a more complex problem than a compound interest formula.
One could add They have been bred and raised, like a dog, for exactly that purpose. You don't want the masses to be too smart, they might want to question the status quo and whatnots
The interest should be calculated to the remaining amount at end of the year so the maths is wrong here, but making a payment of 2400 dollars in the first year will put around a 20 dollar dent in the loan. So I guess your point is still somewhat accurate
Interest rates can be converted from annual to monthly so her math checks out to me but regardless if there are mistakes (which there very well could be), its still a pretty shitty realisation of an example of how bad the whole student loan scam is smh
Most of us were taught this, but we got to start making better decisions. You can google how loans work or how to calculate interest. All of your knowledge doesn't have to come from one place. Don't wait for it to fall in your lap and then be surprised when the end result isnt as good as you thought it would be. You can seek out as much information as you want(for the most part) anytime. Learning it in school although useful (and already occurring) won't change the fact that you something you learned as a teen may not necessarilly apply to you as an adult. You may not know what your future financial situation will be and you might take out that loan because it's your only option. Life may not steer you in a direction where you get that high paying job after you graduate and the loan is even more stressful. If you think the school didn't prepare you find a place that will
This is just another example why this country needs my Burleigh/Singleton American Grad Star Program! It will eliminate 2 to 4 years off of college and then it won't be so bad for everyone. And I have lots of other genius level Utopian ideas but I can't get any kind of an interview from the media or Government.
@@donny3183 no one is asking for your sympathy. It’s just a hurdle that should be seriously considered before committing to the career. More students should be taught these things so they can make an informed decision.
I agree. I didn’t know what I was signing up for and I don’t understand why we have interest loans anyway. I could pay them back in they didn’t have interest.
Thanks for watching! 😊 If you like the video, *SUBSCRIBE* for more!
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Velocity Banking can help in this scenario
@@TheRealAuroraEmily Saying student loans are a scam is misleading given the example you presented. Of course if you don’t pay your minimum you will owe more!
I really want to report this for misinformation. Your example is deceptive. No way that $200 is minimum monthly payment on loan you describe. So, OF COURSE if you aren’t making your minimum payment you will owe more. A student loan is no different than any other loan. Pay it according to the terms. If you don’t like the terms don’t take the loan.
Man I need to learn exel.
That's Google Sheets
Excel
You can learn what she did in less than 30 min. It's useful! Give it a try
Literally
Yea bro once you do you can really excel at life.
Loans, doing taxes, managing money in general should all be taught in school 100%. I’m 20 years old and I learned the quadratic formula 6 years ago. I have not used the formula in 6 years and probably won’t use it much for the rest of my life...
Compound interest is a pretty standard part of our curriculum in Australia. Pretty sure it was either yr 10 or 11 maths.
Yea I’m sure you did compound and simple intrest in math along with that, school teaches a variate of things for all different carriers some information might not be applications your future but you might be to others and at that age you can’t be sure what you want to do so you learn it all. Second the reason simple math is taught is not because math is important knowledge rather it builds critical thinking
@@blank-vj1mc That’s… such an ignorant thing to say lmao. Not everyone has a parental figure in their life.
The quadratic formula is really important though...
Tbh I wouldn't have listened
Seeing this make me feel really grateful to be born in a country where it's still considerably easy to apply and pay for college without having to get a loan. There are a lot of scholarships with low requirements.
Bro where are you?? Adopt me?
Aussie?
lmk where?
@lugia741 subsidy? scholarship? Or something else is what you meant right? (im guessing its prolly close to subsidy or scholarship)
In Portugal it's HELLA cheap too
Never taught Interest, Loans, Mortgage, Purchases, Money Averages, Taxes, Bills, Payments, Money handling, expenses, Self Employment, Tax Brackets - so just the basic life stuff…thank god I know about Pythagorus’ Theorem though!
I can safely say that I’ve learnt much more ‘life-handy’ information from UA-cam videos than school. And I paid a lot of attention in school…
Most math is actually important and especially basic trigonometry
I'm very grateful that we actually got taught lots of useful stuff in school like this. Far from perfect, we could still lesrn how to do our taxes n stuff but personal finance they nailed it down in school in Austria.
Don’t forget investing too!
And credit scores
I thought every school taught about loans, I was every year of high school
The funny thing is we were taught this, i remember learning about compound interest. What the school system doesnt do but should is always relate real world examples to the math. Some kids aren't as smart (or at least i wasn't) and cant relate therefore we forget these things we were taught because we deem them unimportant.
Edit: changed teachers to school system
You mean the school system, not teachers.
@@luis6633 I'm edit that :) good to point out
@@nataliearciniega2103 👍
We were all taught this. We just didnt care
It wasn’t “taught” it was mentioned! Much like slavery and reconstruction, you are not going to be given any real world applications, or enough information to relate it back to your own life. Both omissions perpetuate racism and inequality.
Yes, they used to teach that in school. It’s not just “student loans”, but that is how “Interest” works. It works the same if you are saving and earning money on Interest.
Why did they stop?
@@evelynabrahamwesley2809 why do you think.
@@wadebrewer7212 so that we could blissfully be dumdum ?
Exactly! She is a dr and seriously didn't know that. I grow weed for a living and apparently know more about math than a dr.
@@evelynabrahamwesley2809 They didn't stop. I don't know why he said, "they used to" because they still do. If you are educated in the U.S. at some point in high-school math you will be taught the formula for simple interest and compounding interest. They won't tell you to make wise financial decisions but definitely are taught the formulas to figure out how much you'll pay in interest. Most loans actually breakdown the amount that goes towards the principal as well as the amount from each repayment that is towards the interest. The total interest paid at the end of loan period is shown when you accept the loan terms. You actually don't even need to be taught how to calculate it. She's just a idiot.
As someone looking into a degree that could easily get into the 6 figures in terms of debt. What advice would you give for student loans of that nature? Looking back would you have done different?Anything? Student loans are by far one of the greatest problems in America.
Start off at a community college and then a 4 year state school to save thousands of dollars.
You
Don't pay less than the minimum. It's be slow but it won't increase
Go to Norway and get your degree there. That's my advice
Be sure there are actually jobs available in that field. Intern in that field or get some experience and be 100% sure you actually want to do that thing before you start school.
3rd year med student here. I chose to apply to NHSC's scholarship program which covers your tuition and offers a monthly stipend. It's not the same as HPSP which is tied to the US military. NHSC's deal is that they'll cover you as long as you dedicate yourself to FM, IM, Ob/Gyn, or Psych and work 2-4 years at a health-professional shortage area, which could be a lot of places you live near, not just rural.
Downsides: specializing becomes a real challenge. It will require going back into a fellowship you desire AFTER completing your service term and competing with fresh residency graduates. Also, it's a binding contract so no one should apply unless they are 100% certain they will abide by all the rules. Read the scholarship program guidance completely.
Upside: you will not have a dollar of debt out of med school.
Attending physician, and medschool asst. prof here. Read the fine print extremely carefully. I've watched this exact program not live up to its promises. On top of that, the work you do in the undeserved area might pay you very little. Speak with your counselors and mentors in your medschool before committing. I hope that, whatever you choose, it works out.
Same for me.
In my country we don't really have student loans, so many students just apply for this kind of program and after the uni they are sent to some regions, where doctors are needed and work there for 2 years. If they want to stay for longer, they are provided by an apartment and have a higher paycheck
Thank you for this comment. I’m planning on becoming an Ob/Gyn and this comment was extremely helpful to me.
@@senseiturtle you're right I have seen stories of where this goes south, and I absolutely expect to be paid less working at those HPSAs for 4 years. However, slightly less pay for an extremely finite amount of time is far better than a lifelong debt
@@senseiturtle tldr backing out of the contract is a massive problem. It could cost you $1M+. If you choose to commit, it needs to be a deeply deliberated choice as you'll be signing a binding contract.
Schools won’t ever teach you this because they want you to go into debt with them, you are their customer😦
Finally a genius
My College literally taught me this
More like the potential slave. " The borrower is slave to the lender"
We literally taught this information in Freshman Seminar, as does thousands of colleges.
College professors and instructors want their students to be informed members of society. We prefer an educated public to an uneducated one.
Public high schools want you to go into debt to colleges? How does that benefit them?
Granted interest was taught in school it wasn’t taught in a way someone would actually use it in real life, it was taught through some booty cheek math classes
if you are a moron
Could I also be an idiot? There’s so many options
Isn’t this just a simple interest question with the starting amount as 50000 and interest rate as 5%?
Teachers can explain things but they can't understand them for you.
Booty snatchers!!!
I went for bachelor and masters degree in arts and I was able to pay for all of it plus room and board by working a side job after my classes. I love Europe
Oh, burn…
@@whatisrealknowtheformula6137 Hey but you have real Freedom given to you by the US constitution! Sadly most lack the currency that grants freedom. That’s right not your constitution is freedom money is. Without money you’re worthless. Thats what they tell children when saying be good in school. Without huge money reserves which „work“ for you passively in some investment portfolio and generating interest. Which is basically the labor of all working people. Let’s be real money cannot work ever tried giving the old Franklin a shovel?
@@FADGhost70 youre weird bro. get off the internet for a while.
@@dillon6280 You’re just another person who does not understand our economic system.
@@FADGhost70 what made you come to this conclusion? me calling you weird?
so, you have the skill, the drive and the knowledge, yet your "higher paycheck" is nullified. geeze
@Riss A how will your loans be paid off "fairly quickly" if you only pay a little more than what the interest rate adds?
Not to mention, being a Dr you have learned how to keep yourself healthy so that you can live and work longer, thereby earning much more than someone with a high school education. A good education teaches you how to keep adding to your knowledge base and also how to apply that knowledge yourself. As doctors, they have to be good examples to those for whom they care.
That said, there are ways to pay more towards the principal and push down your interest. Not to mention refinancing once you have better credit scores.
Investing and having a retirement account are a must from day 1 if not earlier.
@@iamrobot396 Wondering, what would you recommend a guy who doesn't want to go to law or med school, but fears the inevitable outdating of tech degrees?
@@elken16 Except that the job is pretty tough on healthcare workers, so knowledge of keeping one healthy. Working night shift and getting bad sleep almost guarantees heart disease
@@chrisjohnson7872 Get a trade. To do it all over again I would be an electrician, it easiest on the body. Then plumber, carpenter, welder in that order. Get into a union with retirement plan or after you are experienced start your own business.
BTW I'm an auto mechanic, turned shop owner, turned real-estate investor.
There should be a class that gets students learning how paying taxes works, government forms, bill paying and even help them set up a student credit card once they are seniors. Also prepare for how to find a rental safely and what paperwork goes into that, renter's insurance etc. Basically how to be more independent and deal with adulthood. But the credit card is kind of a big one. Because if you don't get a credit card by the time you finish college, you will likely be unable to get one without jumping through major hoops and spending money. This will make your life difficult when it comes to renting, buying, certain utilities companies etc. I am 27 and still have no credit score because of this issue. It can be very frustrating.
They taught taxes and bill paying in home economics.
Your parents are supposed to teach you how to be an adult, blame yourself and parents not the school system.
@@FasterthanLight11 that's a dropped course. It's not important, that's lame, it's not required. = Everyone in the last 35 years.
Yeah it’s called accounting 😂 I’m taking it
Damn, my parents taught me alot of this. I'm grateful alot of their focus was money and credit. I learned alot.
They should teach Americans to start refusing to accept those outrageous student fees. It makes no sense to start your adult life with that much debt. It doesn't benefit, the person, the community, the country. Only the banks.
we need a general strike on paying this crap. the gov has enough money for war but wont unburden us. im so done
and the employers, who *always* have a stream of competing qualified candidates with loans to pay!
When I was a kid my mom drilled it into my head to always pay more than the minimum on any debt, even if it was only $5 more and holy crap that has saved me so much anxiety! I’m dealing with student loans too and even at my absolute brokest points I’d pay an extra $10/month and looking at this math I’m thanking my lucky stars I did because I’ve had my loans continually go down as I pay on them more aggressively.
If you don't mind me asking, what do you mean about "always paying more than the minimum"? I'm about to graduate college in 5 months and I've heard people say that but never explain what that means. Do the loan company give you a certain amount to pay every month?
@@jeremiahborders2959 yeah they do. The thing that most loan companies (sharks) neglect to tell you is depending on the terms of your loan and how the interest is calculated, your monthly minimum is paying on the interest and may not even touch the principle(the money you actually borrowed). So in theory you could spend the rest of your life paying on interest because you’re not paying off the principle. When you pay more than the minimum, that over payment automatically goes towards that principle which in turn lowers the amount of interest that can accrue. If you look up amortization tables that can help you get a visualization of it and plug some numbers into repayment calculators online. They can show you how much time and money an extra $20 over the minimum *really* adds up.
@@jeremiahborders2959
Yes, they tell you how much you’re supposed to pay each month. But don’t listen to their numbers and pay more.
Even just a little bit more if you’re in a touch spot. It will go down.
Or do a huge lump sum principle only payment, and specify this to your lender it is principle only, paying the principle only means they can not charge interest on what you paid off in the lump sum payment which reduced interest and for me when I did this also pushed my due date back, when I paid mine off my due date was 2 years into the future meaning if i could not pay for what ever reason, there was nothing they could do until those 2 years came around 😀
Thanks for your comment.
It's actually so true, we should be taught such things. They're far more important than some of the crap we study
Don’t blame the school when you were sleeping or skipping classes 😂😂 we all were taught basic interest
It's annual interest not monthly. She applies it to each month as 5% not the whole year. If it's compounded monthly she should use (.05/12)
You can learn these things though. Maybe if you were an adult 40 years ago, then it might be hard. You are using UA-cam. There is no excuse why you can’t teach yourself these things. If you are able to use the internet to look at videos, there is no reason you can’t learn how to take care of your finances.
We were taught this in school and not just one class but an entire month.
@@-Sam69 not me
Yeah, between my wife and I, our minimum payments is like $1k in total every month. Definitely didn't think monthly payments would be that high but it is manageable for us at least.
That means you’re not paying enough installments every month, you should always pay more then just the interest so you can pay less and less on interest and clear off your principal eventually
It depends on your job. Getting a degree does not guarantee you a job as before. Even if you have a job, it might not be extremely well paid (specially at the beginning), then you better stay single, once you have kids, you have other money priorities adding up.
My doctor friend has a loan of 500 000 $ (bc medicine studies take a loooong time) and even if she pays a lot and has a good salary, her debt keeps adding up. I was accepted at a very good university in the US and they ask me 50000 to pay the tuitions for 1 year... even with the scholarship i got, it was impossible to pay. I decided to not attend that university and to study in France and I am happy to start my life without loans. So it is not as easy as “pay more”. Plus, she is only giving an example, i am sure her debt is higher and she pays much more that 200$/month
As a mortgage loan officer, I can confirm, interest can be terrible and no one knows how any of it works.
I’ve seen people with student loans that started as a few thousand from the 80s and 90s turn into 30K still owed in 2024. It’s awful and student loans are the worst at this
Agreed with the general idea. This would be a good example of line of credit. With loans the payment is high enough that your principal amount goes down month to month. Try changing that $200 to $400. You will see both interest go down (slowly) and the loan that's owed.
To use a simple medical analogy, a monthly dosage of $200/month is insufficient to eliminate the $50,000 condition. The dosage has to be at least $208.33/month to stabilize it!
There are all sorts of loan payment calculators on the Internet that let you calculate various loan amounts (total amount to borrow; monthly payments; years to pay off completely; interest rate given loan amount, monthly payment and term, etc.). Conversely, the "magic of compounding" also works in favour of those with savings goals, e.g. mortgage for the house in Malibu, financing to open own practice, retirement, etc. :)
Still it is 16 years
@@Reactionize 176 months at $400/month and a smaller payment at month 177. For the Excel users in the crowd, the PMT function will return the montly payment based on the interest rate, number of months, loan amount, future value (0 in this case), and type 0 (end of period).
@@johnslawecki1448 student loans offered by the federal government to undergraduate students who demonstrate financial need. They start accruing interest the day you receive your loan. So , you have to use compund interest to calculate loans to add more money such as 60,000 and 5 percent interest remain years. It is around like 13-16 years you pays 400 dollars a month regularly and job after graduations .
Yeah, they were paying insufficient amounts with the 200 so of course it's gonna go up, the bank wouldn't let u pay an amount each month that would increase the total amount that's illegal lol
in sweden we have very low interest rates on student loans, it's barely anything. the lowest monthly payment you have to pay is about 60€. also we don't pay tuition. this way anyone can go to college and get an education and it won't put you in crippling debt for the rest of your life
The money is coming from somewhere. Nothing is free. People don't work for free. Im not sure how it works over there but you probably pay higher taxes in something to cover that cost.
@@maxinvasionleet Yes, people in Sweden pay higher taxes. However, the benefits they gain from the government far outweigh what they pay individually.
For instance, an average family in the US may need to spend 500/month on childcare, 500/month paying for student loans, and 500/month on child things. That same family in Sweden would pay 1000 extra in taxes, but they also get a child tax credit, so they pay 800. So the American still pays almost twice as much on the same stuff. Numbers are random, of course, but that's the idea.
I’m from Sweden but I don’t understand how this works, all my friends have this thing but not me and I’m not sure if I have to pay back or not
@@maxinvasionleet of course nothing is free, our social programs and benefits are tax funded. but it doesn't have to come straight from our own paychecks. VAT-tax, import/export tax and corporate taxes are big sources of income for our government. it's about wealth redistribution to help the poor and underprivileged. without that, only rich people would be able to go to college
@@Lana50500 har du studielån hos CSN? går du i gymnasiet eller högskola? studiebidraget som man får under gymnasiet behöver man inte betala tillbaka
More kids need to be paying attention to this shit. All my friends went to college immediately when they graduated and changed their majors multiple times, prolonging the amount of time they’ll have to spend in school, and half of them have already dropped out without finishing even an associates butt “it’s the college experience that matters” and were confused that I waited 2 years to fully decide what I wanted to study and then went to a tech school when I could afford it with no loans. Now they’re all stressed about money, and I don’t have the heart to tell them that their money troubles haven’t even started. Bc their loans r still on hold.
Damn
They won't. They are more interested i hanging out, making out, and smoking weed. School didn't teach them how to waste years of their lives, but they learned it.
Taking a year off between high school and college should be normalized! Do some soul searching, research, volunteering. I know too many people who realized $20,000+ later that they were not happy with the path they were taking.
Let’s not forget that just with one loan but if you have multiple loans for your student loans like they usually do, this is triple. Paying the “amount owed” isnt enough. You have to pay x2 if not triple that amount to actually make a dent. Thus, this is how they keep you in debt for life.
Most schools used to have classes about “Home Economics” where they taught stuff like this.
However, life skills aren’t tested on standardized tests, so they dropped them.
I think that’s just where your from every school where I’m from had home ec in it
Edit: I’ve seen the replies and I’m not from America so I think that’s why lol. I’ve done home ec and personally it’s not the best class you do cooking and sewing and all but it’s pretty stressful since most of it you have to be very organized. But some like it
@@Tara-hx4td most places don’t we never had home economics
@@Tara-hx4td Grew up in WA, they had dropped home ec about 20 years ago and I was in the last shop class at my school in 2013
Normal economics teaches this stuff
@Josh Sacks yeah. That's what I was about to say. Home ec was for teaching how to use a stove, take care of a baby and sew. Economics is where we learned how to balance a checkbook but they didn't teach us about loans
The sad thing is, stuff like this USED to be taught in school. We even had to take a year of Street Law (ie; knowing and understanding your rights). Taxes, income, interest, understanding how business works.... How to think, not what to think.
How to be an independent person.
I'd love to see schools go back to that stuff.
It’s not in the best interest of the government citizens to know their rights. That way the people don’t know when they’re being taken away. And it’s not in the best interest of big business for people to understand how business works. So i don’t think anything will change lol.
Schools do teach this. Well, mine did. Graduated in 2015. It’s just a matter of not all schools do. Honestly, back then I didn’t take it seriously even though I was taught. That stuff just isn’t real to teenagers. My teachers did their best to put it into perspective and the problems were fun to work out when they were real life scenarios. Still, there was just a mental block of sorts when I was younger. It just doesn’t seem real when you’re that age.
I’m lucky enough to not have debt, but that’s because my mom helped make sure I was debt free when I left school.
I was taught this in school... Ppl just forget because everyone hates math. But i loved math. I never forgot how interest works and its sad that ppl decide to hate math so much that it can really hurt them like this. Forgetting they WERE taught this in school
Personal finance should be part of high school home economics. But that's usually cut from curriculums first. The vertex42 sheets template is killer for listing out and visualizing the scale of PhD level student loans.
Elon musk- ‘the bank won’t give a kid a $10,000 business loan but they’ll let them fall $100,000 in student debt.’
Another way to think about it is with buying a car. If you have bad credit or no credit and the dealership/bank is letting you drive off with a $50,000 car chances are you're getting screwed over on interest. Sure you're monthly payments can be $400-$500 a month but a lot of it will be going towards interest and in the end you will have paid $65k for a car that is now worth $20k after 6-7 years
Funny story of mine:
Obviously, at age 17, I had no credit, but because I knew that I had no credit, I figured I couldn't get a student loan, so I paid out of pocket for school.
It was only until a few years ago I found out I could've applied and gotten a loan from the very beginning 😅
But knowing what I know now, I'm glad I never got a student loan.
This is the only time being naive saved me from a world of financial hurt lol
In the Netherlands student loan interest is 0.1%
Also you pay a percentage of your income, so if you don’t earn a lot because of whatever you pay less per month.
After 25 years (or 20) if there’s anything remaining the government just whipes it.
Also it only costs 2100 euro per year to go to college, even medicine is the same price.
My cousin is a certified cardiologist
0.05% here in Sweden but there is a plan to increase that to 0.1% to finance a new loan.
Forgot to say that you always get €326 each month for full time studies. For national students college is free*.
* Payed through taxes.
@@AlexKall i think the proposal was to raise it to 0.5% not 0.1
@@olivereliasson799 Yeah saw that now, remembered it wrong! Thanks!
Problem with the Netherlands is because the interest is this low students are in high debt cause they use their loan for all things but study.
I'm going to say something crazy: don't go to school if you can't afford it, or at least if the job you expect out of college can't pay off your debt within a reasonable amount of time.
I have no college education and don't have a 6 figure salary. But I'm able to save and invest 50% of my gross income because I have very little expenses and zero debt.
What's your job.
Congrats! You are a smart cookie! 🎉 More people should be like you (and me!).
As someone who is pursuing his career in finances I would like to urge everyone to have basic knowledge about finances irrespective of the fields you choose to prosper. Sure you can hire people to do it for you but it would be better if you can do the basic stuff and understand it by yourself, it doesn't take very long to understand and it sure is rewarding.
So true, me too💯
same here, financial literacy is such an important skill.
At this point I realised how grateful I’am that I didn't have to pay for my higher education. Thanks for sharing!
$200 a month is way to little to be paying on a $50,000 loan. I’m in college making $200 a week payments on a $6000 loan and even that seems to be going pretty slow. I get your point though interest is terrible.
Omg that is terrifying. How is that legal
ok hit me being antisemitic (even though i am a Semitic) but ask the jews
No one sets up their loan this way. Usually monthly payment is higher to make sure your loan amount goes down. Otherwise you would be paying this for rest of your life. Literally no one does this...
@@05khanha I understand, makes sense. I've seen people mentioning on social media their overall debt from college + med school is on average 250k+ so the monthly payment would have to be quite a high percentage of their cca 5k a month salary. As someone from EU with a government funded tuition I feel like a spoiled brat in comparison ngl
@@physicianskitchen I think that I saw a TikTok in which FootDocDana said she had about $500,000 in student debt. To pay that off in 10 years at 5% interest she would need to pay about $5000 per month. In the U.S. a podiatrist earns an average of $212,000. She hasn't been practicing for long so let's put her at the bottom quarter making $175,000 per year which makes her gross monthly income of $14,600. If she has an average mortgage of $1,100 plus say a car loan of $600 her total debt payment would be $6,700. That would give her a debt to income ratio of 46%. That is not a crippling debt level, especially if you are a high income earner and have growth potential.
Look…democrats have figured out a way to keep you indebted to them. It is called student loans. They are not bankrupt-able. They keep you in debt to the government while their powerful teachers unions and higher education system raise the rates. It is a self licking ice cream cone.
If they can’t register you to vote at 16, putting you in their debt is the next best thing.
It's basically criminal. And what's crazy, that we just accept it, as normal.
She’s just explaining how any loan with interest works. The example she’s using, is giving way too low of a payment for a $50,000 loan. If you bought a $50,000 car your payment would be around ???? not 200.
While I agree that 5% interest is pretty high.. 200$ a month on a 50k loan is way to little. Even without interest you'd be paying over 20 years on that.
For a 50k loan I'd expect something on the order of at least 500-700$ a month to pay it back in a reasonable amount of time.
20years payback on university loan is normal in the UK. Although the loan is written off at that point.
Most students can't afford $700 a month while going to school. Once they graduate and get out in the workforce, maybe. But you can't expect a full time student in demanding courses to be able to afford almost $1,000 per month....not everyone has their parents money to pay their way 🙄
@@blueeyedbatman usually how student loans work is that you get them while you are a student and pay them back when you have a job after your studies.
I only paid back the monthly interest while I studied (which slowly increases while you draw the loans) and once I was done and got a job I lived cheaply and paid back 1k a month for 40months... No parents involved.
If you pay 20 years on those loans you're paying in this case here almost double because of interest, which is crazy.
@@blueeyedbatmanGood job telling me you don't know how student loans work without telling me you don't know how student loans work.
When I went to high school in the 1980’s classes called “Careers” and “Personal Finance” were social studies requirements. The Careers class required us to learn our Social Security number and taught us how to fill out a 1040-EZ form (amongst other things). The Personal Finance class taught a lot of this useful information that everyone should know when they leave high school but is now expected to be taught at home in the name of having a “more rigorous” curriculum. So, we may have kids who will succeed more in college than in support themselves independently, with our without a college education.
I'm actually very jealous of your Excel skills.
Also, in New Zealand, our student loans come from the government and are 100% interest free. You only need to pay them back when you earn more that $19k a year, and the payment comes out of your wages automatically at a rate of 12%. Depending on your/your parents income, you can also apply for living costs of about $250 a week which come out of your loan and need to be paid back, or if you're in the lower income bracket, you can apply for a student allowance of $275 a week that doesn't need to be paid back.
It's wild reading these comments and seeing how different student loans work in different countries and it's making me feel extremely lucky to be in NZ
Basic formulas... a quick google search you can learn it too
Same in Sweden, or rather it's not 0% but 0.05%. The American system seems insane to me
It is not rather be in NZ but be its citizen
Student loans, at least a massive majority of them, 92% last time I checked, come from the government here too, plus state universities and community colleges are subsidized by the government. What a lot of people don't understand here is under Obama, when the affordable care act was passed, one of the gimmicks used to not make it look as expensive as it was, was to earmark federal revenue on student loan interest to be spent on health insurance subsidies and Pell grants, which are grants for low income people to have their college paid for.
So in other words, with our screwed up system, student loan borrowers who may be struggling to pay their own debts are doing so partially so someone else can get their college paid for by the government lol. Its so dumb I wish I was making it up, but that is how "progressives" in this country work, they just count on people being ignorant to the ways their "progressive" policies screw them over....and well, its working.
school is an absolute waste of time. i'll take lower taxes and guns and trucks to keep living in the USA instead
Got to love being a tradesman . I didn’t need any expensive school loans and I make money like a dr . Thank you kindly
Yessir, paid 1500 for a year of classes at the local community college, got a job and made all the money back in 3 weeks.
@Made in Italy ASMR Official do you need that to live an acomplished life? Heck does everyone who went to college, make that kind of money?
@Made in Italy ASMR Official this year I’ll make about 260k . Worked about 7-8 months out of the year . I’ve made 400k working 10+ months a year before . I pipeline . I’m a welder and run my own welding truck . The money is out there . You just have to work hard for it and takes time to get there . It’s not a easy life though . You live out of a suitcase . But if you are smart with your money . The time you do have off I dedicate it to my family and enjoy the better things in life and not stress about day to day bills .
@Made in Italy ASMR Official thank you , all the best in your goals and life as well .
@Made in Italy ASMR Official does the average college graduate make that? I think you'll be surprised to find the average skilled tradesman might make more than your average office job.
If the monthly repayment was $10 more and made at the beginning of the period, and with interest being charged at the end of the period, which is when the interest will be charged, the principal loan amount will decrease.. in this scenario, the loan balance at the beginning of month 2 would be $49,997.46 (decreasing slowly but surely)
Or you could work during school and pay some off as your go while there is no interest and then use the 40k or so a year from residency saving 10k or so and putting that towards it per year and then make 3 and 4+ times more than anyone else will ever make after that so the 2k a year in interest is legit 100% irrelevant either way
@@Andrew-hx9tz doctors cant work through school. They courses are already to rigorous to have any personal time let alone a job. Then when they get residency which is 2 years of 60hr weeks unpaid... Again it's really difficult to work. Hence why they can't stay paying their loans until after residency when they get a job. Which is 2 years after schooling
@@nataliearciniega2103 doctors are irrelevant though. They can easily pay back their loans and will be top tier earners for the rest of their life. You have to understand even if your interest rate is AWEFUL you will ALWAYS out earn your student loans. You just cant het a house in a major city and a new car and fancy things at the same time when you first start getting payed. Its not that complex. Doctors make millions more than the average in a life time. Their 250k student loans are irrelevant. They are the last people that need student loan help. Also you have 4 years before things get that rigorous and even then people still work at the same time as med school
@@Andrew-hx9tz 🙄
They aren’t a scam. They just aren’t for everyone. And every major isn’t one that promises a good job outlook. Masses of people who didn’t take school seriously and didn’t take employable majors will suffer from them!
They have courses to teach you these things like money management and finance, BUT they won’t tell those courses exist unless you’re becoming a financial agent. Or that they say “You don’t need to learn this [blah blah blah]”, when you do. That was my school, they would gaslight you and they don’t even know how to guide you at all. The counselors were liars too…but that was my school
Exactly! At my highschool I was required to take about 3-4 years of art classes in order to graduate but yet the financial literacy classes were optional and not required to graduate, doesn't make sense.
Those who understand compound interest, earn it. Those who don't, pay it.
Compound interest (either positive or negative) is very very important to learn… I wish I had learn basic financial planning in school…
That’s why you always pay more to principal. Get your payment to be 100 a month and pay 200 extra to principal on top of that 100.
ARE YOU HIGH litterally 350$ a month payment only 20$ goes to principal
"Just have more money"
Credit line
“I’m a doctor I should know I did a lot of school” I learned this in my first accounting class as a sophomore
And she gives a bad example. Of course if you don’t pay your minimum you’ll owe more! (and there’s NO WAY $200’js a minimum payment on $50K)
it's called amortization. simple math. To get out, double your minimum payment. If you're educated you can pay.
Pro tip: don’t go to college if all you can afford is a 200$ payment.
Lol then only 5% of population would be able to go to school then
I feel pity for people who have student debt....we should really appreciate our parents or education system...
Why do you feel pity for them? It's what they wanted.
@@shady610 because for them its the only way.....education in my country till jr. College is free and after that if ur financially not capable enough government provide half of the college fees . And guess what in my country its very normal for parents to provide their children till they have a proper job...so things like student debt is a term which we never or rarely hear . And i am not alone to think like that ... most of the countries are like this . Americans are not even aware that the are pitiful...ah sigh
@@pinjari6010 College isn't free in your county. Other people pay for it. The school staff, teachers, office people don't work as volunteers. It's not free. Education isn't the only way to succeed or make a career. And making a huge decision to jump into debt suggests they weren't ready for said education.
@@shady610 well atleast our government is using tax payers money for well being of future tax payers so they could pay taxes without any worries not like they are bulding a wall which apparently have no use😇😇
I’m in my senior year of high school and am now learning about personal finance with a school Dave Ramsey course. Glad I am learning this.
Spread the knowledge
We were required to have a finance class in school for all seniors.
Students didn't want to learn.
It's basic math, which we all learn.
This was taught to us, but many people didn't pay attention because they didn't think it was important until it sunk them, then blame school for not bothering to listen themselves.
That being said, anything above a 2% interest rate should be illegal.
And student loans shouldn't exist at all. Education should be free.
This is so true I was pretty decent in school but I was still stupid at 18 years old and even 19 through 21 I understood interest but I never realized that it meant you would never pay off the principal unless you paid massive amounts that you couldn't afford
The fact that you're that proficient in Excel makes me want you as a doctor
Wat, this is basic stuff
What?
That Google docs. It's trash compared to the real excel. And she's intermediate in skill, but compared to noobs she's highly skilled.
@@claudius_drusus_ but it's free. And it's fine for doing basic stuffs.
EXACTLY
Went to college and drop out my second year. Decided to get a CDL and that was one of the best decisions I ever made.
For those thinking about enlisting into the military for free college (For active duty).
1. Look into your job description (MOS) and see if it'll benefit you after your end of service (Infantry usually never find jobs outside secruity work).
2. You can start using your military benefits while serving. You don't have to wait until you finished serving to start your higher education (you can even apply for Fafsa).
3. After you finish your time in the military, you don't have to rush into college. Take as long as you need before deciding what you want to focus on. College might not even a thought for some at this point.
4. For those collecting disability from the VA, consider looking into chapter 31 (VR&E).
Bonus tip. While using your post 9-11 G.I bill, consider going to campus to gain your full housing benefits while studying. You only get the national average if online only (when covid hit, all on campus and hybrid classes became online, but the VA continued to honor the on campus benefits).
Sorry for the long off-topic rant. Wanted to provide additional information I was never told while serving in the Marines.
Thanks for the information
thank you for your service
They also don’t tell you that student loan repayment (if you already have a degree when you get recruited) is quite taxed and then counts as income 🙃 thought my loans would be paid off my the army. They were inadvertently, through using all of my saved deployment $, but not via the promised student loan repayment. IMO it’s way better to use GI benefits + VA that you outlined.
It's called compound interest they teach us in India in 9/10th standard.
If you know about compound interest you earn it. If you don't you pay it.
The fact you can't get a 10K business loan but can get a 100K student loan at 18 gives you all the info you need to know.
we learned ab loans and interest and credit and all that for a while when learning ab the 1920’s in 8th grade history
my 6th grade pre-algebra teacher taught us about credit vs debit cards and dept
but unfortunately it looks like my experience is fairly uncommon 😅
Extremely uncommon
Maybe just my school but my teacher taught me about simple and compound interest in 6th grade. She also taught us about bonds and loans and stuff
Will all the finance majors please stand up 😂😂
That's why you are a doctor and not an accountant. Your monthly payment has to be higher than your monthly interest so that you make some contribution to your principle amount. If you just pay $200 a month, your loan will never be paid off
Uh okay
Big brain
i'm a finance major and i'm doing everything i can to pay out of pocket so i don't have student loan debt (taking only community college courses for as long as i can, etc). i haven't taken out any loans and, if it ever got to the point where i would have to, i would take a break to save money. i don't want a lifetime of debt for a degree i received in my early 20s.
Invest and it wont be 😄
I’ve never heard of a loan that has a payment lower than the accrued interest.
Because there is no such thing. Her numbers are wrong
@@gary4864 don’t know about that. I have a friend who started with $5,000 loan and 10 years later owns $15,000. She had some late payments at the beginning, but her wage has been garnished for last 8 years. And still no progress on the repayment.
@@gary4864 uhh so - it sucks to admit this but I have $72k in loans and my monthly IDR is $50
(Income driven repayment plan)
Unfortunately for me, every time the sun comes up my loans increase by $3.76
I’m kinda okay paying. $600 a year on my loans and prioritizing my mortgage - later in life I’ll either use home equity to pay off the student loans or see if the forgiveness after 25 years was just smoke or if it’s a real thing.
@@LisaAllyssa she mentioned in the video that thats how mortgages work. That is not how mortgages work. Regarding any form of student loan debt, I dont specialize or have a license in student loan dept so I cant comment if its correct or not.
@@rivace9849 she mentioned in the video that that's how mortgages work. That is not how mortgages work. Regarding any form of student loan debt, I don't specialize or have a license in student loan dept so I cant comment if its correct or not.
My mom is a financial advisor… just staring to realize how lucky I am to have picked up on a lot of this stuff. Also can’t wait to go to school
Compound interest is definitely taught, most just weren’t paying attention or didn’t apply that knowledge in their life.
Agreed. I did learn it but not in the situations that I’d actually be using them, which I’d argue would be much more beneficial to everyone moving forward.
@@ktsterlin9304 agreed and kids have short attention spans, and usually don’t know what’s going on. They probably didn’t even know why they were learning about compound interest. They need context and for you to be specific.
Teacher: “today we are learning compound interest, it may seem small to you now… and honestly it is… but in a few years when you enter the working world after college if you decide to go there this will help you to know how the future will look for you in regard to debt,” and I feel like if they choose to ignore that… fine you can’t force them. But just saying “this unit we are learning compound interest.” Its like okay… “we just learned y=mx+b im sure this is useless too.” But if you tell them WHY it’s important and the relevance as l
well as the risks to not pay attention, I think that’s the first step to help educate kids better. We need to have a more useful and verse education system that will actually be helpful for adulthood. School should be a place to where even if your parents die tomorrow… you at least have the knowledge to survive. If my parents die tomorrow… excuse my language but tf am I gonna do with the quadratic formula? Lol
I believe I had an SAT question about interest. I think people aren't taught how banks/loans work. Minimum payments aren't always enough to avoid interest.
Not in my school
I think parents need to explain things to their kids before taking out a student loan.
If you're only paying $200 a month on your 50,000 loan. You clearly aren't paying enough per month. You would be paying that off for decades.
Dont get into huge debt to earn a worthless degree. Now she a Doctor. That will pay off in time as she makes more and more money. Collage makes sense for some jobs!!! Key word, some!!!
When you buy a house, same, which us why you pay a lot more per month and why early in the loan, most of that money us going to pay for interest.
Learn a trade!!!
how do they decide to put only $200? all the websites for every student loan option i had when i was in college calculated a recommended repayment amount that guaranteed this never happens. that value is even set as default if you don’t do anything, everything is explained very clearly on their sites
Never pay the minimum on any loan. I pay $400 extra on ny mortgage but it will save me nearly $80,000 in interest over the life of the loan
For me, as I'm doing art classes, it's perspective. They haven't taught a single thing about it and now we have like five assignments on it. It may be considered minor, but perspective is a good thing to know.
This is why I am using my moms GI Bill and scholarships so I don’t have to do student loans. My dad is still paying off his from 20 years ago
Oh she was in the military huh? Yea that was very smart thing to do. I'm planning on going to the airforce myself & knew if I ever did want to go to college the gi bill will pay for that.
Same here. My mom was in the Air Force, so I am just using a scholarship (not a GI Bill, but another military scholarship). I am so glad that I won’t have to pay, since my parents had to pay student loans from 30 years ago until just recently.
Compounding interest is taught in the introductory college math course... Everybody takes it... It's right there -_-
THANK YOU for spreading awareness, and accurately. I work in finance and there’s so much ignorance on this subject
I'm not American, but i got caught in that trap for a bank loan. My grandparents ended up paying off the loan, and now i pay them off every month with not interest rate or anything
Let's say you pay $200 a month on a $50,000 and there is 0 interest. It would still take over 20 years for you to pay it off.
Paying $200 a month on a $50,000 is just way too little. What you want to do is pay about $210 a month to stabilize the interest rate and pay $600 a month once you find a stable job.
I’m not buying it. In a world where even the poorest Americans have internet access you have to be willfully ignorant to not know how loans work
exactly. there are no more excuses. there is information galore, it takes a real piece of work to be blind to all of it.
This is just an example of how certain facts turn out ... not a scam. Use increasing wages to pay higher monthly amounts. The rate used, 5%, means $208.33 of interest monthly.
the problem is you obviously cannot pay $200 a month on a 50,000 loan at 5%.. that’s crazy…
That’s why it’s typically illegal to have a “minimum payment” that is less than the interest of the loan.
You do not need to know or learn anything other than how amortization works. We all have smart phones that have amortizations schedules built into them very simple. Enter your loan information, including amount, rate, months, and you will see how much you should be paying every single month to pay down not only interest, but principal as well. If you did that you will that 50k requires minimum of $268 a month for this to be paid off in 30 years, the payment would be much higher for a shorter term. What does this tell you? That you are not making a big enough payment to cover even just the interest alone. That is what’s being added every month. Note it doesn’t take a medical degree to know this. I don’t even have a college degree.
As someone from Switzerland this really sends chills down my spine. Education should be essentially "for free", all you should need to do is put in some good effort. A country full of highly skilled people from all fields is a win for the country. I don't get how the US is still so "mighty" while having so many broken elements....
The USA is like the company Apple. It's really good at advertising how great it is when there are better products.
It's not captain Nemo. Will you adopt me, a 28 year old with no career because it's too damn expensive and didn't want to put my parents on my paperwork and now I'm worried about my future?
for free? sounds too good to be true.
We're only mighty because we're psychotic.
@@ericfarley1475 Well you gotta live and feed yourself, but that can be done with a part-time job. We have a top 10 world-ranked uni here, which will just cost you a few hundred bucks in tuition per semester, thats it. I would know, because I teach there...
I’m so glad I saw this. I want to go to college, but now that I know this I’m going to be very careful about how I proceed. Thank you so much for sharing this!
Me too Fam
Skip college. Go to trades school.
People with no college making $50k cleaning houses
@@SgtJoeSmith yeah. My mom does that. I’ve thought of that but I love helping people. And being a doctor is something I’ve wanted to do for a long time. But I appreciate your input! Seriously. I will take that into consideration too!
@@Emma_78 go into military. Be a medic there. Get college paid for to become doctor. Free health care rest your life. Maybe even get to travel to other countries in military to provide medical care to people there. There's all women helicopter medical crews in army. Pilot is woman and medics on chopper are women. You could end up on chopper rescue crew. Talk about exciting job to brag about. Or else coast guard is an option too. Just tossing some ideas out there for you to consider. Navy has Drs on ships. Hospitals on air craft carriers. Maybe you become a doctor on a carrier sailing the globe and taking care of them top gun flyboys. A friends daughter just turned 18 and enlisted in army for medic. Go talk to recruiters for army/ navy/ coast guard etc see what's available and offered now days. Might save you couple hundred thousand in student debt burden and help you develop into a person you never thought possible. Best wishes
Dr. Dana, I remember freshman orientation at U.K. in 1997. The first thing I saw was representatives from credit card companies giving out applications, as if they were tests! Edit, terrible at math, but great at biology, and the sciences. JK
Loans and banks will always e your enemy.
Most were taught but didn’t listen.
That’s why you don’t pay minimums lol. Taught in school, yes. Common sense however used to be common.
I’m honestly so sick of people paying the minimum, then complaining it takes too long to pay off.
This seems very smart. I wish I knew how to use a spreadsheet. 📊
Most of Indian parents pay for their child’s uni fee and other expenses, I’m lucky to be in an Indian family
Yeah
most asians do. i’m asian and my parents and i agreed i would pay for it myself-in order to train myself for the real world and truly understand the concept of money. i think it’s right for students to pay for it themselves and be independent. we aren’t children anymore.
@@misojimo2154 yeah but also think about the amount of stress the students have to go through, plus parents have at least 18 years to save up all this money.
I mean this is just my opinion
@@misojimo2154 if your parents are the ones who are pressuring you to go to college then they should pay for it. If not, then they should still pay for it. You may not be a child anymore but they are still a parent and it is a parent’s duty to provide for their kid, no matter what stage in life they are in.
Plus tuition is dependent upon your parent’s income if you are trying to get something out of fafsa. Since it’s dependent upon their income, it’s expected that they would pay. If your parents are making over 100k a year then chances are you’re paying full price for tuition unless you get a ton of scholarships.
If you’re going to a really good school, then you’re most likely paying $25-35k (if it’s public) and $40+k (if it’s private) per YEAR. So really there’s no way you, as a high schooler, could get that much money within a few years before you even start college, much less if you are in college for 4 years.
Best advice, go to community college and get a job and internships over the summer. You could probably pay for a years worth of tuition when you transfer and then you have a much less loan to pay off.
Either way you end up paying thousands of dollars. If your parents pay your college. Then it's your obligation to pay for your kids college, so you still end up having to pay regardless
In the US, government approved loans (the cheapest kind that everyome gets) requires you to take loan counseling. Loan counseling is basically just an over thorough explanation on how loans and interest work. It even advises you to pay interest as you go.
You're lack of information does not constitute a scam.
I'm so lucky my school offered a 3 year course during high school called Accounting and Finance. Taught. me about loans, how to budget, how to file taxes, and how to invest and stuff. It was an optional course, and I took it cos I had just moved to australia a year prior from Tunisia, so didn't know how stuff like HECS and credit scores worked. Now I manage my finances better than most of my friends and I help teach THEM how to file their own taxes
Oh my god I literally did my math IA on this , the reason for the loan to go up is that the interest per month is higher than the principal per month
Ok, number wise is correct but you clearly don’t get it... in real life you also have to take into account other things. My doctor friend has a loan of 500 000$, even with a good salary, she can’t pay a higher principal than the interest rate bc she has other expenses (kids, health expenses, etc). So yeah, you don’t need to have a math IA to understand she should pay a higher amount per month to cover at least the interest, but you have other expenses and the debt keeps adding up
@@Aryomful what are you on about where tf did anyone mention anything about her life situation. All I did is mention the reason for her loan to go up. What are you talking about not being able to pay a higher principal than the interest per month, that's the point THE PRINCIPAL IS LOWER THAN THE INTEREST RATE HENCE the debt is ever-increasing look random person I can explain it to you but I can't understand it for you.
@@arneshsingh7239 it’s you who doesn’t understand MY POINT. I understand perfectly your basic maths, I am only telling you to take into account other things that are NOT mathematical because it is obviously a more complex problem than a compound interest formula.
And everyone thinks the “university kids are intelligent” their just obedient. Like a dog.
One could add They have been bred and raised, like a dog, for exactly that purpose. You don't want the masses to be too smart, they might want to question the status quo and whatnots
@@TititoDeBologay I agree 100%
The interest should be calculated to the remaining amount at end of the year so the maths is wrong here, but making a payment of 2400 dollars in the first year will put around a 20 dollar dent in the loan. So I guess your point is still somewhat accurate
That's what I thought as well. I was so confused when she was adding the interest every month
Interest rates can be converted from annual to monthly so her math checks out to me but regardless if there are mistakes (which there very well could be), its still a pretty shitty realisation of an example of how bad the whole student loan scam is smh
Most of us were taught this, but we got to start making better decisions. You can google how loans work or how to calculate interest. All of your knowledge doesn't have to come from one place. Don't wait for it to fall in your lap and then be surprised when the end result isnt as good as you thought it would be. You can seek out as much information as you want(for the most part) anytime. Learning it in school although useful (and already occurring) won't change the fact that you something you learned as a teen may not necessarilly apply to you as an adult. You may not know what your future financial situation will be and you might take out that loan because it's your only option. Life may not steer you in a direction where you get that high paying job after you graduate and the loan is even more stressful. If you think the school didn't prepare you find a place that will
If you're only paying $200/mo on a $50k loan of course you'll never pay it off.
I’m pretty sure you’re supposed to be paying more than 200 in that situation.
😅
This is just another example why this country needs my Burleigh/Singleton American Grad Star Program!
It will eliminate 2 to 4 years off of college and then it won't be so bad for everyone.
And I have lots of other genius level Utopian ideas but I can't get any kind of an interview from the media or Government.
If you’re on a doctors salary I suggest paying more than 200 a month😂
Mind blown she uploaded this video
Medical interns make low salaries, they’re still in training. The big doctor salary doesn’t come until many years later.
@@CC-ju6vo don’t you get like 20+ years to pay it? I have no sympathy they’re very kushty loans
@@donny3183 no one is asking for your sympathy. It’s just a hurdle that should be seriously considered before committing to the career. More students should be taught these things so they can make an informed decision.
It should be taught STARTING IN HIGH SCHOOL. In community college and universities. Should be required
I agree. I didn’t know what I was signing up for and I don’t understand why we have interest loans anyway. I could pay them back in they didn’t have interest.