How can people make payments for 20 years on school loans and barely make a dent in the principal? How are those loans different than a mortgage?

Question

How can people make payments for 20 years on school loans and barely make a dent in the principal? How are those loans different than a mortgage?

In: Economics

Answer 1

Bobby loans 1000 dollar at 3% interest.
The first year, bobby paid off 3 dollar per month, adding up to 3*12 =36 in the year.

Bobby has now paid 30 dollars in interest and only 6 to actually lower the loan.