Im sure some people know the fact that student loans operate like a massive credit card. However, this is a warning notice for those who will start making payments in the fall. Just because you are on a 10yr or 25yr plan doesnt mean that you are making fully amortized payments each month. YOU MUST PAY MORE THAN THE MINIMUM MONTHLY PAYMENT THAT YOU RECIEVE ON YOUR PAYMENT. I have a total of 5 loans, the amount coming to
$92,000.00. On my 3 loans i was paying more than the accrued interest and was slowly paying them down. One the 2 larger ones, on some months, despite paying more than the $1,045 monthly minimum i was STILL NOT PAYING THE TOTAL ACCRUED INTEREST! My new loan servicer NELNET provided me with a payment statement and I saw for the first time the breakdown that my REAL MINIMUM MONTHLY PAYMENT in order to TRULY pay down the loan was $1045 + $84 for a total of $1129 per month. I find it very shameful that while the Dept of Education was my student loan servicer that they never informed me of this $84 trick. Luckily for me i paid 100 bucks extra every now and then, but sometimes paid only 50 bucks extra meaning I got fucked for a few months.
Now for those grads that dont find good paying work by the time payments have to start getting paid PLEASE FOR THE LOVE OF GOD apply for IBR or in the event you are unemployed DEFER THOSE LOANS OR YOU WILL BE FUCKED. Dont allow the interest to go crazy high on you otherwise those NONDISCHARGEABLE LOANS WILL NEVER BE REPAID. I have plenty of unemployed bar failing friends that throw the loan letters into the pile of older loan letters. Little do they know that their interest rates and principals are sckyrocketing higher. As scary and painful as it is to look at the letters guys and gals please just grow some fucking balls, open the letters, and make the phone calls. You cannot allow these loans to ballon higher by simply not putting them into deferment otherwise your 100k loan can grow to 140k very very quickly.
And for those who have been making payments YOU MUST CHECK THE INTEREST RATE AND SEE HOW MUCH YOU ARE PAYING FOR EACH LOAN. The bigger loans with the higher rates are the tougher ones to bring down.
One final point. YTD I have $7800 towards these fucking loans. Every payment is agony for me as more than 60% of my disposable goes toward debt slavery service. But i refuse to do IBR as they will throw me into the 25 yr plan, forcing me to pay for a third of my life. And no, i never plan on being a home owner. Property taxes and insurance? Nah, id rather let the landlord pay that.
Peace
Subprime JD: A blog dedicated to exposing the law school and higher education scam.
This is important for new grads to know...as a young grad, I made the mistake of going into forbearance, getting additional degrees, not worrying about paying down the loans, and now I am looking at over $350k. I'm paying over $2K a month, and that's not even making a dent in what I owe.
ReplyDeleteThis is why we scambusters are trying so hard to keep more people from making the same mistakes as we did...if you are not ready to pay more than half your wage to Sallie Mae, do not go to law school...or any other graduate school for that matter. It's just not worth it.
Wow Locke that is so much money to repay. How do you do it?? I would have ditched the country out of anger. Thats a pure 350k you can EARN overseas and not pay to the ponzi which feeds off the backs of millions of grad students.
ReplyDeleteOn another note, we are slowly but surely making progress! More and more people are learning about the scam busting movement. We have to keep making new posts and add certain "key words" such as law school ripoff, law school scam, law school misery, homeless attorney, law school ruined my life, etc etc. Thats what I love about the net as the law schools wont be able to stop our blog key words from showing up on the google search hahahaha.
Locke, by now you should have credentials as long as your full name. I think I screwed myself by going on the graduated payment plan. My payments are only going up, and by the time I'm nearing retirement, they'll be $600 a month. I'm paying $200 now, and this is servicing a $70k loan.
ReplyDeleteIt doesn't sound like a lot to pay compared to others, but I don't make very much. My wages don't show any sign of improving.
ReplyDeleteI am making a concerted effort to pay my loans of in 10-15 years, not 25-30. I still see this as too long of a prison sentence - all for the sin/crime of attending law school. (I can see it now - the industry apologist cockroaches will point to this and tell me that this is "proof" that law school is not a bad investment.)
ReplyDeleteYes, pay these damn things off as fast as you can. This is TOXIC DEBT - and I will continue to let everyone about this!