Unfortunately, before I met my wife she went to a for profit college when she was just out of high school. The college was Stevens-Henagar and they financed her fees in-house. So, she has an agreement to pay back ~42K over 18 years at 0% interest. To date ~10K has been payed back.
Recently, we received a letter from them offering to close the loan (outstanding balance 33.7K) for 13.7K. Currently, we have the cash to pay this back without dipping into the emergency fund. Seems like a no-brainer. Investing 13.7K over the 12 years remaining on the loan would require an 8% annual return to yield 33.7K. In my book, 8% guaranteed is outstanding.
What I don't get is why they are offering this. In their letter they state they want "to help our students reduce their student loan debt." What's in it for them? Why would they throw away that kind of future return for some quick cash now?
P.S. If there are any young people out there thinking of going to a for profit college, it is a huge waste of time and money for a worthless degree. Don't fall for their slick advertising. They may even label themselves as "non-profit" like Stevens-Henagar does. You would be much better off attending your local community college.
Submitted March 21, 2018 at 02:34PM by chaucerNC http://ift.tt/2u9BwN6
