Question about student loan interest rates

[disneysteve]

I see a lot of threads where people discuss their student loans and list interest rates of 6-8%. With the federal interest rates near 0% and other loans like mortgages down near 4%, why are student loans so high? Back when I had loans, they were in the 3% range and that was at a time when other rates were actually a lot higher. Our first mortgage was at nearly 9%, three times the rate of the student loans. It seems that the situation has flipped and now the student loans are high and the mortgages are low. Does anyone know why that is?

[bjl584]

I'm not sure the reasons behind it, but my loans are in the low 6% range. I called about lowering the interest rate and it was a no go. That's as good as it gets for me for now anyway.

[nck4857]

I'm paying 2.36% on what student loans I have left and I don't think I've done anything special to get that low rate. I know that mine adjust once a year and I haven't paid them off because I'm only paying like $3/month in interest.

[prf2009a]

I wish I knew the reason. I've researched everything I could think of online to see if the possibility of lowering rates exists and I have found nothing.

$175K at 6.5% right now for my wife. I would feel a whole lot better if those rates were closer to 3%.

[Slug]

Something changed in '07 I believe. I consolidated my loans and pay between 1.5% and 2.5% on my MBA loans. Everyone after me can't get below 6%.

Ah, found it. Variable rates became fixed. https://www1.salliemae.com/about/new...s/05292007.htm

Timeline looks like this: FinAid | Calculators | Education Loan Interest Rates

[Bob B.]

I graduated from college 16 years ago. I had 8K in SL debt, and it seems like I was paying in the 7-8% range, and it seems like I was paying less or about the same as what auto loans, mortgages, etc. were going for at the time. When I was in the middle of paying them off, it seems like interest on other things got pretty cheap, and I was paying more.

Just a guess, but maybe the reason SL int is relatively higher now is because of a high default rate, and the risk of lending to students is greater now than what it has historically been?

[disneysteve]

Originally Posted by Slug

Ah, found it. Variable rates became fixed. https://www1.salliemae.com/about/new...s/05292007.htm

Thanks. That explains it. So not only did they go to a fixed rate loan, they set the rate pretty high considering that T-bills are yielding next to nothing. Had the rate stayed variable, it would probably still be 2-3%.

[snshijuptr]

While I was at school, they fixed the rate. So my loans from 2004-2005 & 2005-2006 are variable, and my loans from 2006-2007 & 2007-2008 are fixed at 6.8%. Also, most of the loan companies also offer ways to reduce your rate like direct loan offers .25% reduction if you use automatic payment.

[jpg7n16]

I still have about $6k to go on mine. Current rate: 1.61% Variable

[Naples09]

I'm one of the lucky ones with a 1.6% rate on my SL's. I do know they increased the rates a few years after I consolidated the loan.

[NetSkyBlue]

I just paid mine off on Tuesday! They were (I forget) somewhere between 1.5 - 2.5%

I graduated in 2004 with 2 federal loans, 1 subsidized, 1 unsubsidized. But I'm pretty sure mine were variable interest. I got notices several times over the last 8 years telling me my payment was changing.