We have a healthy macroeconomic debate going on at my hedge fund these days. It’s about interest rates. Our chief economist, Mike Dooley, thinks the US economy is about to catch fire, and sees a real chance of 10-year rates over 3% by year end on the back of an imminent Fed hike in rates. While Dr. Dooley has always been a perma-bull, this recent bout of optimism has me thinking he spent too much time in Golden Gate Park on April 20th.
Under the haze of smoke, they began to shout “10-year Treasuries at 3%!”Read more
Much has been written about the new income based repayment (IBR) rules the President recently signed into law. Notably, maximum payments on qualifying federal loans are now capped at 10% of disposable income rather than 15% before, and after 20-years, any remaining balances are forgiven, versus 25-years before.Read more
Student loans aren’t fun, and they can be confusing. What frustrates us at SoFi is the dogma in the market that students should always exhaust their federal loan options before considering private loans. This can be very bad advice. While we agree that subsidized Direct and Perkins loans are clear no-brainers for students if you are eligible for them, things get more ambiguous with unsubsidized Direct loans and become down right murky with the egregiously burdensome Grad PLUS loan.Read more
The more you learn about the student loan market, the more you realize how broken the system really is. There are horror stories about companies suing parents whose children have died before repaying their student loans. Others tell tales of loan companies being totally inflexible and demanding full payment even when a borrower has hit a temporary rough patch.Read more