Are payday loans really that bad? This article goes in depth about how payday loans work and what it is, the opinions of both sides of the argument about payday loans, and the high interest rates that payday loan lenders charge. Payday loans are called such because the day borrowers receive their paycheck is when they can pay back the loan. Payday loans are small, short-term loans that can assist with any emergency payment such as a car accident, weather damage to a person’s house or unexpected hospitalization. The borrower must have a job and a bank account to borrow from a payday lender. The interest rate seems very high annually, as high as 400%. The reason for the high interest rate is because the loans are short term, so they normally …show more content…
The Consumer Financial Protection Bureau states that 75% of the industry’s fees come from borrowers who take out more than 10 loans a year. The Center for Responsible Lending is a nonprofit, non-partisan organization that focuses on fighting predatory lending practices. The director of state policy Diane Standaert argues that payday loans are not how the industry advertises them to be, and that borrowers have no choice but to roll over their loans many times, which rises the interest fees, trapping the low-income borrowers in an endless loop. The Center for Responsible Lending offers a yearly interest percent cap at 36%, claiming it to be reasonable standard for borrowers to pay back. However, Jamie Fulmer, the spokesperson for Advance America, one of the United State’s biggest payday lenders, argues that the proposed price cap is not reasonable at all, since they cannot make a reasonable profit from that, and explains further that the payday-loan interest …show more content…
A study that Jonathan Zinman performed in Oregon shows what happened when the annual interest rate was capped from 400% to 150%. Most, if not all payday loan shops left the state. After the shops left, it seems borrowers were worse off than before, not having access to payday loans. Zinman wrote another study, co-authored by Scott Carrell, about U.S. military personnel using payday loans. According to the previous senator Elizabeth Dole, during a 2006 senate bank committee hearing on payday loans, presented a map with several payday-loan shops set up around military bases. The data Zinman and Carrell gathered concerned job performance and military readiness from several Air Force bases showed that payday loan shops were affecting U.S. Air Force soldiers, causing a decline in both job performance and readiness, causing soldiers to fail their performance evaluations. Since this was big issue, Congress passed the Military Lending Act, which capped the interest rate payday lenders can charge active personnel and dependents at 36%, which effectively caused many shops to move their businesses away from military bases. However, academic research has even been proven to be biased in different ways depending on funding from industry advocates on different sides of the argument, as an attempt to push their objective forward. The article mentions that each academic paper
Hi, Anna I’m really happy that you had a once of a life time chance to go on tour with Rihanna as her makeup artist. But, since you had to drop out of English 1302 I remembered you made me promise to keep you up to date with what we are learning. With never wanting to break a promise, I’m deciding to write to you today to teach you about a new subject we are learning. This subject is about how to analyze an argument and, I going to be using Charles Schwertner editorial called “Tuition Deregulation is Falling Texas Students”. Schwertner published this article in December 7, 2014 on TribTalk.org in order to reach out to students, business man, and the general people of Texas.
Everyone has their own opinions on different topics. Some arguments may be more clear than others, but they exist. Some debates on arguments should end, but people always find a way to argue the other side. For example the argument on student debt has been going for a long time. To many, student debt should be eliminated, which makes sense in order to improve our economy.
I agree with the goals of the affirmative side. But, we need to provide relief for new college graduates. But this bill doesn't get us there so please negate. If we want make a cushion for the students, then we need to make a bigger one. The national student loan default rate, 11.8 percent a year ago, stands at 11.3 percent.
Columnist Scott Gilmore brings to light the operations of payday loan companies and the impact that they have on society. Although the payday loan companies seem to take advantage of the financially vulnerable members of society, perhaps the true fault lies within the education of society. A devastatingly large portion of society seeks out payday loans, and the results are appalling. As mentioned by Gilmore in the article, “[A correlation was found] between the number of payday lenders in a neighborhood and premature mortality”. This reveals a lot regarding the repercussions of seeking out loans that in turn create greater loans.
The book Freakonomics by Steven D. Levitt and Stephen J. Dubner talks about many different things, including cheating teachers and sumo wrestlers, how abortion lowered crime rates, how a street crack gang works, and whether the way parents raise their children even matter. These topics seem to have nothing in common, but all of these topics were identified in the same way: an economist (Levitt) looked at school test scores, crime data, and all sorts of other information, looking at them in unconventional ways. Because of that, he has come to many interesting and unique conclusions that make complete sense. These findings were based on some simple ideas: the power of incentives, conventional wisdom is not always right, things may not have obvious causes, and experts often serve their own interests instead of the interests of others. Perhaps the most important idea in the book is, as Levitt and Dubner state, “Knowing what to measure and how to measure it makes a complicated world much less so” (14).
Paying for college is a lot. You need to know about students loans and how they work, unless you are able to pay for it without loans. Most students who end up using student loans do not know how it actually works. The total amount of student loans that are still being paid is slowly inching up to reach 1.2 trillion dollars. In the article written by Ron Lieber, Payback is game created to inform and give an idea to students about different things that they will be paying for in college.
In the documentary In Debt We Trust by, Schechter talks about how the mall has replaced the factory as America’s dominant economic engine. The film shows how big banks and credit cards companies drive Americans to become sheep. Schechter is clear when he says that a bubble could burst, and comparison of the USA today is comparable to Rome before its fall (Schechter 358). Government loans are comparable to “mafia loan” because of their outrageous interest rates. In Debt We Trust shows behind the scenes of what the big banks and credit card companies do to their targets.
Congress sets the interest rates each year as these loans will eventually be paid
Thus, it stands to reason that the article’s purpose is to support the argument that predatory lending practices are at fault for the debt young adults experience. Macias uses personal experience immediately peppering in researched data to support his findings and conclusions on how the credit card industry wholeheartedly takes advantage of young America. His article captures the reader’s focus by appealing to pathos and tugging at pity in the reciting of how Macias was taken advantage of by credit lenders. Carlos Macias’s argument for the debt accrued by college aged adults being the fault of the credit card companies themselves roots itself in his rhetoric. From his skillful hooking of the audience with information garnered from personal experience to the utilization of logos throughout the paper presenting itself as careful and reliable research.
Student loans have always seem to be a controversial topic. Many people are in agreement and disagreement over the opportunity to student loans. Student loans can be a great advantage to many students, but it can also drown them in an immense debt, that will follow them for many years. The more we analyze this perspective, we are able to distinguish the advantages and disadvantages of student loans. There is a variety of perspectives on student loans, some involving annual salaries, interest rates, and commodity.
Student loan debt loads have been spiraling, doubling over the last decade, and the enrollment rates of young people from lower socio-economic groups are rising far slower than middle and upper groups. Governments must recognize the renewed public investment in post secondary education is an economic and social imperative. 6.7 million borrowers in repayment mode are delinquent (Snider 1). The sad fact is that many lenders aren't exactly incentivized to work with borrowers. Unlike all other forms of debt, student loans can't be discharged in bankruptcy.
2. The argument is introduced at the beginning of chapter three when John Kenneth Galbraith produces the phrase “conventional wisdom” (86). He says that people are instinctively drawn to manipulate statistical information in order to conveniently benefit themselves. The introduction to chapter three is effective and grabs a reader's attention because it asks prospective questions, causing one to do a double take. The authors says “If you can question something that people really care about and find and answer that may surprise them- that is, if you can overturn the conventional
Without evidence to back up what is being said, readers are more likely to be skeptical about Summers’s views. This being said, the use of statistics in the article help to strengthen the stance of
Annotated Bibliography #1 There are good and bad loans however, car loans are something you should avoid. Consumer Financial Protection Bureau (CFPB) is an agency that helps make sure that financial companies treat you fairly. For 5 years CFPB has helped 27 million consumers with illegal practices involving money. They helped by providing the consumers with a compensation of $11.7 billion. More services with is needed because people with low credit scores are purchasing cars which causes these people to have loans.