Lux Investing

Do you agree that it is absurd that a young adult can acquire a student loan for 20,000 but not seed money?

In my opinion, it is absurd that a young adult can acquire a student loan for 20,000+ but can't receive a loan for 5,000 with a higher interest rate. What do you think is the rationale of such a preposterous notion? Could it be that oppressive people feel that a student can be short-changed in their education by well-placed distractions, but that seed money can be wisely invested and well-guarded by the adult? I don't have anything against a college education. In fact, I am an advocate of college education. I believe that an individual who possesses a degree ought to be able to find a job outside of the fast food sector. I am curious of your opinion for this matter. I suspect that people will state that young adults can't be trusted with money. However, if that is the case then why are they given the student loans. Money is money is money. If your response is along the lines of college based mediation of funds then what do you suggest a college should do to enable adults? David M: "A college loan is betting on ones life, where seed money is betting on a single business (most of which fail). If you make a good case for your business and bring a certain amount of capital, you might be surprised at how well it could be received. When making a student loan, the lenders are betting that this person will find some job even if it's not the ideal one. A safer bet in their mind." I don't agree. It isn't betting on a single business. Do you recall in days past when apprenticeship was purchased. I think it is correct to state that seed money can be used to purchase internship into many businesses if necessary. In doing so, the purchaser is making an educated decision on whether the purchase of an opportunity to demonstrate abilities within the company will turn over into full-time employment. In a sense, seed money used in such a way would yield a faster, more efficient, return for the investing bank; weeks rather than years.

Public Comments

1. No I do not think it is absurd. Actually, a college student can only get $5000 a year by Statford loans. Private loans are also based off the student's credit score, just like all other loans. A lot of college students must have a cosigner for the loans to insure payment. If you can get a student loan then why would you want another loan at a higher interest rate anyways.
2. A college loan is betting on ones life, where seed money is betting on a single business (most of which fail). If you make a good case for your business and bring a certain amount of capital, you might be surprised at how well it could be received. When making a student loan, the lenders are betting that this person will find some job even if it's not the ideal one. A safer bet in their mind.
3. Student Loans are also protected by laws in ways that personal loans are not. Student Loans can not be discharged in bankruptcy. Student Loan lenders can seize bank accounts, property, tax refunds etc if you default. If you have a paid off car that is worth at least 5000..you can take you title to a title loan place and they will be very happy to give you a loan for 5000 to use as you see fit at a very high interest rate. It does not matter if you are young for old -- I've seen both make major money mistakes. If you are over 18, have good credit and asset that can be used as collateral...you should be able to get a loan. If a college graduate needs seed money....then he/she does it the same way the rest of us did it. 1. ask mom and pop for help and/or 2. get a job, work your fanny off, open a savings account and save up that seed money. The college gave you an education. Once you get that diploma...it's time to enable yourself.
4. The reason for such a charge on a student is even more absurd, but distrust has a way of punching up the cost for everything, and even then education fails. Where is that line between ruthlessness and personal opinion.