Tag: money

Why is there so much interest in loans?

It is obvious that money is what contributes to most things in the world. We need to live and grow and protect ourselves. Some of us even have enough money to treat themselves here and there, but what is up with the interest on loans?

I understand that money is a necessity in this day and age, but over the years, interest rates in the bank have gone way down and interest rates on loans have gone way up. This just doesn’t make any sense and I am just trying to make cents, you know? Student loans have become a regular thing that people take out when they go to college or graduate school. If people want more interest on their savings, they have to invest it in a mutual fund or in the stock market, neither of which are risk-free. I believe that with how much money the bank is making off our money, we should be getting at least 1% of our money in interest right? I have been needing to take out loans lately and I am seeing interest rates of 5-20%. Imagine taking out a loan that you must start paying back immediately, but you are a student who makes less than 5,000 every year. That seems ridiculous. I think that if a college student is working while studying full time, they should be making more than they do already.

With the gap between lower class and upper class widening, it is important to try and take every advantage that you can in this world to make it to the big league. A wise man once told me that you should not take out more loans than you expect to make in your first year in the workforce. Sounds reasonable. Another large component to all this debt that America has is credit cards. Honestly, I understand a need for a credit card sometimes, but the interest on those things are insane. I think that in the school system, it should be mandatory to teach children good behavior when it comes to money. For example, how to pay bills, how to pay taxes, how to calculate what you can afford to put towards loans, how to live more like a minimalist after school. These skills would help us pay our loans back much faster than we do now.

Those are my Thoughts for Food.

Potential Solution to Tuition?

After attending private school for my entire life, I have seen that tuition plays a large role in determining someone’s financial situation. With tuitions rising every year, this widens the gap between the upper class and the lower class, forcing the working class to work harder than they already do in hopes of earning a degree.

With college degrees being advertised as a cure for financial instability, there is a twist that is not observed. As one struggles to pay for tuition, hoping that one day they will get paid a lot more, they end up falling deeper into debt because of how much this degree costs. The cost of a college degree does not match the value it has in the long-run. If one can earn a degree without taking on more debt than they expect to make in their first year of work, then I would suggest that they still go for a degree. For the rest of us who expect to pay for most of tuition using loans, I would evaluate other options. However, I think there could be a solution to this problem.

If most college tuitions were lowered using tax dollars, we would be able to send more people to college and America would be able to develop further in more areas than they currently do. Although many don’t want their tax dollars to go to these areas, it would benefit our country as a whole. Another possible solution would be if large corporations helped their employees pay for college. These huge corporations and name-brand companies have so much money that, if they dedicated even 2% of their cashflow to providing scholarships for employees, then more people would begin working for the companies and we would have more people able to go to college. This is a win-win situation. Helping lower-class students go to college would improve our country and bring the social classes closer together.

Those are my Thoughts for Food.