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.