For the publisher:

I have reflected on the dilemma of federal student loan debt cancellation. There are good arguments for and against this decision, which the President can apparently do with a stroke of a pencil. Who knew?

Some people say the money has been borrowed and needs to be paid back.

It’s quite a dilemma to compromise and please most people. My point of view is a little different from a lot of others, and maybe my approach might be a little more accessible to everyone involved.

We could approach this problem in a completely different direction. Lower interest rates. How about dropping them to a whopping 1%?

Let’s look at the numbers and see what a difference it would make.

We will be using a $ 30,000 student loan, which from what I understand is the current average loan. You can verify Google yourself.

It’s amortized over 15 years, an arbitrary number but below average.

We will be looking at monthly payments starting at the beginning and ending 15 years later.

I used an online loan calculator for the numbers:

If 30,000 are borrowed at 7% for 15 years, the monthly payment is $ 269.65.

If 30,000 are borrowed at 1% for 15 years, the monthly payment is $ 179.55.

The difference is $ 90.10 per month, saving the borrower some $ 16,218 over the life of the loan.

That is, 30,000 loans at 1% for 10 years result in a monthly payment of $ 262.81, thus eliminating five years of payments.

This saves the borrower some $ 16,979.80 over the life of the loan.

Dale Randolph

Laurent