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Student Loan correlation with Federal Reserve Rates

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  • Student Loan correlation with Federal Reserve Rates

    When do we expect student loan interest rates to drop? A couple Federal reserve drops have passed and rates for student loans look about the same. My high yield savings account has been quick to adjust.

  • #2
    Haha that's a good one.

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    • #3
      With DeVos at the helm, fat chance.

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      • #4
        Hmm. Sorry to attempt to remove rates from policy discussions. It’s been my experience that rate changes have been consistently far between. Oops, they just went down. I always considered a stable rate to be a good thing. Basically, a fixed rate loan protects the student starting a career journey. True, no one refi’s to get higher rates. Kind of how fixed rate loans work. It’s primarily a guarantee.

        https://www.consumerfinancemonitor.com/2019/05/31/new-federal-student-loan-interest-rates-for-2019-2020-announced/

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        • #5
          Um this has nothing to do with DeVos. Congress sets the rates and the Dept of Ed executes. But they are based on the 10 year note.

          https://studentloanhero.com/featured/how-student-loan-interest-rates-decided/

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          • #6
            I actually meant to specify the rates offered for refinancing

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            • #7


              I actually meant to specify the rates offered for refinancing
              Click to expand...


              When and if market interest rates explode, the student loan fixed rates will look pretty good. Refinancing is a cyclical business. Make hay while the sun is shining. It's in demand now, but can dry up. Refi is a for profit business. Physicians are a lucrative niche.

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              • #8





                I actually meant to specify the rates offered for refinancing 
                Click to expand…


                When and if market interest rates explode, the student loan fixed rates will look pretty good. Refinancing is a cyclical business. Make hay while the sun is shining. It’s in demand now, but can dry up. Refi is a for profit business. Physicians are a lucrative niche.
                Click to expand...


                Unless we're on the path for the...dare I say... negative interest rate.

                And I'm not sure how much lower than 2% variable anyone would go in terms of student loans (First Republic may go lower, but that's not available to everyone).

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                • #9
                  Most student loan refi offers are based off of some tenor of LIBOR, which while it can be related had some regulatory stuff awhile back and is more of a monetary plumbing fixture and will have other issues affecting its cost.

                  The 3 month LIBOR is only down 18 bps since last year, and it started its climb long before fed rates as well, mostly to do with the changes in the MMA space.

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                  • #10




                    Um this has nothing to do with DeVos. Congress sets the rates and the Dept of Ed executes. But they are based on the 10 year note.
                    How Are My Student Loan Interest Rates Decided?


                    Click to expand...


                    Thanks for the link, appreciate it.

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