I saw a post saying that two people left school 23 years ago with a combined debt of 70k. They paid 500 USD monthly for 23 years and still owe 60k.
I’m thoroughly confused. obligatory not from America.
In: Mathematics
For federal student loans, they can be broken into 2 types: Subsidized and Unsubsidized. Subsidized loans don’t incur interest as long as the borrower is enrolled in an approved school at least half time. They only begin to accrue interest once you no longer meet that requirement, either through graduation or stop attending. These are need based loans and not available to everyone.
Unsubsidized loans begin to accrue interest as soon as they are paid to the student. The problem occurs as most people defer payments until after they graduate or stop attending. So you have taken out $20,000 in loans over 4 years but interest has been accruing since your first disbursement there by making your starting balance $20k plus 4 years of accrued interest.
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