Despite my starting school here with no educational loans at all, we're now pretty substantially in the red. The good news for us is that I consolidated the bulk of my loans when interest rates were at their historic low, fixing an interest rate less than 3%. Isn't that less than inflation? That seems to be a pretty good deal!
We went to a financial planning seminar especially for new graduates offered by a local business to attract new clients. There we were told that the "strategic" thing to do is enter the extended payment plan and continue payback over 30 years. Sure, your total interest paid goes up, but you have the advantage of capital on hand throughout those 30 years that you otherwise would have had to pay high interest on. Makes sense... but...
We had a special sacrament meeting the other day in which our bishop relayed a message from the stake presidency regarding assistance from public programs. It was not specifically directed at student loans, but is certainly applicable as the interest rates on those loans have been and will be subsidized directly by the federal government. In other words, the longer I draw out my payments for my educational debt, YOU, dear blog reader, get to pay my interest.
The talk reminded me that there is a big difference between what is ethical and what is legal. I've always known that, but occasionally I think I justify my feelings of entitlement for assistance programs thinking that although there exist other funding alternatives, I deserve to use the program funding for its ostensible purpose. For example, I could hit up family or fast offerings for help paying medical bills, but why not use Medicaid? I tell myself, that's what Medicaid is for. I'm going to be paying taxes my entire life, don't I have the right to use assistance programs now while I'm qualified? This sense of entitlement is repulsive to me when I recognize it, but insidious and compelling when not recognized.
The bishop was particularly emphatic that we must not judge one another in this regard because these decisions are personal and to be decided with regard to personal circumstances and the help of the spirit. I certainly don't mean to insult or criticize those who view the issue differently or come to different conclusions.
I'm interested to hear others' takes on this subject.