What is this horseshit? Almost $2k in interest this year and it will not even let me throw money against the principal.
um. are you paying everything this year such you have extra to put to the loan. because like if you are taking loans and paying it. it would be a wash.
The interest, not the full loan amount.
E.g., a person might be able to pay 4k and not 30k for tuition. And, with that 4k, they want to pay off the 2k in gained interest payments before they start accruing interest on a 32k chunk of money.
Why not just borrow less this year and have a lower principal?
I’m assuming you’re from the US considering you’re being treated like a commodity.
I’ve said it before and I’ll say it again. Student lending is the most preditory lending in this country.
I’m 46 and I still have student loans.
I feel like I got through college just under the wire with it being achievable to pay off. Like not long after being in college I started saying I could not do it if I started today.
For all my problems, at least I can say I’m not in debt. Student loans always seemed scummy to me. The trade off is I don’t receive a piece of paper letting potential employers know i’m worthy. Every thing is a fucking joke and life is meaningless. Fuck everything.
if it helps that piece of paper gets more and more worthless as time goes by. Heck even a masters does not mean much now.
Unless something has changed in the past decade, you can still make payments to your loans, you just defer the requirement to do so until 6 months after graduation.
As someone else here said, if you would pay money to a loan while in college, it’d be better to put into a high yield account of some sort to hold onto until after college. From there I would get advice from a finance counselor on what to do with that money, whether save for longer or start it into payments.
It’s predatory to allow teens to sign these things without fully explaining them and ensuring they understand.
It’s not taught at all in grade school, no one tells them about interest rates, or amortization tables or how to pay extra toward the principal, or that their wages will be garnished if they don’t pay, or if they get married, then their spouse’s wages might be garnished without warning, and so on… It’s just, “sign here, and we’ll give you the money.”
No it’s just predatory. As long as students believe college is essential and that is the only way to get it, the loans are predatory. It doesn’t help teens to understand if they don’t have a choice.
As someone who cares about my society, I believe it is essential for all students to have access to post-high school education, and as more than just job training. We need more people who can think better …. It’s in our own best interest to invest in our future: let’s make public universities/trade schools free to all who are interested
It’s actually just scummy and predatory period. Student loans shouldn’t be a thing. Imagine wanting to devote your life to helping people, becoming a doctor in a country that has a terrible shortage of doctors (And it very much does)But oh no! some crazy shit happens, and you’re not able to complete your degree. Guess what? Big government says “fuck you. How dare you have some crazy bullshit happen to you? You’re entire financial future is fucked up for your whole life now. Goodbye.”
How in the fuck can a better educated people be worse for society? How in the fuck could you ever make the case that it’s bad to have more people trained in medicine? Why would you ever punish and disincentivize behavior that’s good for society?? How in the ever loving fuck does that make sense??
FUCK THIS COUNTRY
We 100% did learn about amortization in high school math, no idea if it’s still taught though
It is. Actually my daughter learned it in middle school (7-8th grades). Not that people have many other choices for college cash.
Also, they make loans standard so they can charge more for the services.
The thing is, I understood perfectly I was getting fucked, it’s just that without a degree you can’t get a good job. That’s the most predatory part
Trade school grads often getting better pay than ‘degree’ education. Often can get paid internships while learning trade.
Often enough, even with the degree, you can end up no better off for some time. If you don’t get a degree and make x/yr, or you get the degree, spend 6~8 years in school and looking for a position that pays 2x/yr but you spend half of the money on paying down your debt for 20 years… That’s a long time to get back into the black, assuming you even went for a degree leading to a position that will pay that much. It is almost criminal that a credit hour learning to work on machine learning systems often has the same cost as one spent learning about art history. Both are valuable to society in their own ways, but they definitely won’t get you the same paycheck, and the cost of entry should reflect that.
For sure don’t get junk degree on a loan. Maybe go to trade school with paid internship, etc.
What do you consider good job?
Pays for a house and kids. I wasn’t able to finish and with the kinds of jobs I can get I can’t afford a car and struggle with bills even with frugal spending. Even the traded require postsecondary training you usuially gotta pay for
I can promise you you don’t even need a high school diploma to make more than most Americans
Fair enough. I believe college education stopped being a requirement and more of a hindrance around 2010. The pay didn’t keep up with the loans and education requirements. Nepotism is now the best way to get a high paying job.
In the US, I’d say good health insurance, retirement benefits, and fair pay. Bonus points of it’s something you enjoy, but that’s more rare I think. I’m as close now as I’ve ever been to checking all of those boxes, pay is a little low for what I do, but liveable with a little extra. I got my degree about 13 years ago. I did get a job about 6 months out of school with a livable wage, bad retirement, good health insurance, but I didn’t like it. Took a little over nine years for an opportunity to come up that I applied for and got. Maybe could have moved sooner had I put in effort, but my job now isn’t directly related to my degree and I got it because I know a guy that got my foot in the door.
If you have extra money that you aren’t allowed to put against the principal, you could at least put that money into a GIC that matures once you graduate. Depending on the rates involved, you may even come out ahead doing that.
Why arent you allowed tp start paying it off? Ive never heard of a student loan you couldnt at least make interest payments on while in school.
The provider shows a $0 balance because it’s “Not available for repayment” which blocks me from making a payment. It’s a government loan, which may be why
that sounds like a software bug, not a quality of the loan
Fwiw I’ve been telling my kids to reject the UNsubsidized loans (the ones where interest starts carrying immediately). But that only works because I’ve managed to save the money to pay that share in addition to the normal share
It’s early enough in the semester that it may just not be fully processed yet. When I was in school I was able to dump what ever “loan refund” they gave me right into the principle.
I hate they call it a refund, it just means you took out a bigger loan than what the bill actually cost. Calling it a refund makes people think they got free money.
Since when do they charge interest before you exist school on government loans? Is that new? I remember them starting to charge interest when you graduate/leave
There are “unsubsidized” and “subsidized” loans in the US. Every student gets a set amount of subsidized loans they can take out based on their FASFA. If that cannot cover the cost of tuition, you can take out additional unsubsidized loans. Unsubsidized loans build interest while you are still in school.
That was my experience as well, USA. Graduated within the last 5 years from a state school and didn’t have interest on my federal loans until after I graduated. Might be worth calling the loan servicer and asking about it, that could be a mistake.
Is it not like, really illegal to prevent people from paying back debt?
mortgage prepayment penalty fees are reasonably common and happen if you pay too much on it too early
When has legality ever stopped them fucking over regular people?
Yeah. Or in the worst case, put the money in a savings account now and use the money to pay for part of tuition next semester.
This sounds infuriating, not just mildly infuriating.
I just had one kid finish college and another start this week.
Your loan and interest and payments start on day one. Most people choose to defer payments until they finish school because they don’t plan on having money until they finish school. That does not defer the interest.
When you finish school, you can ask the loan company to extend the deferment for another 6 months. Essentially, that’s to give you some time to find a job.
You CAN make a payment on your loan. It probably won’t cover any principal, but you can do it.
Your student loan:
You’re also not allowed to discharge it in bankruptcy, and once you do start paying it the bulk of your payment will go to interest. Before I paid mine off I was making a $150 payment amonth, and over a hundred of that went only to interest.
You can thank Joe Biden. He fought hard to make student loans unescapable. (And that’s not a partisan jab. It’s history.)
what are you talking about. They have been non dischargable way before him. He actually did a bunch of moves to relieve and forgive student loans. Its nuts to attack him on this issue. EDITED - ok yeah you are talking as the rep of Delaware the debt holder capital.
Yep.
was making a $150 payment amonth,
Consider yourself lucky, that isn’t that much
We all should remember that people were honest about Biden before he was anoited as the DNC pick, he was a horrible choice who got stuffed in because of name recognition and general prevalence of low information voters who either tick straight ticket ot check by whoever’s name rings a bell.
Yup.,
Is this the US? There are laws that protect penalty free prepayments on student loans, federal or private. Depending on the rates it may or may not be better to invest or have as a rainy day fund, depending on the overall state of finances. But you have a legal right to prepayment and it would have to be a pretty backwater lender not to be aware of this. That said, the system could be clunky.
What bank or federal payment processor?
Mohela, federal loan
https://mohela.studentaid.gov/DL/resourceCenter/HowPaymentsAreApplied.aspx
They definitely allow prepayments. Have you used the online portal?
Online portal says no payment available.
Call on the phone if the website doesn’t work. They are all shit and fuck you over. Don’t trust any of their repayment rules or websites. Just assume you will be bent over the entire time until repaid
I paid 1/3 of my household income to keep the interest from compounding through years of low income training. By doing this for 36 months, they were supposed to reduce my interest rate. 36 months later, they didn’t. Dozens of hours on the phone and they ended up claiming I didn’t meet the rules to reduce the interest rate. Reason… I didn’t keep my contact info available to them throughout the duration of those 36 months. After investigating, I found that at one point the sent me an email to confirm and update my contact info. I did but apparently the system sees that as a time gap as the new info replaced the old. A millisecond gap fucked my interest rate and it happened because they asked me to do it. I get higher interest for the duration of my loan despite doing everything right and feeding my family top ramen for years to make the unnecessary payments (could have deferred through training and lived normal for those three years).
Fuck these companies
Have you added a payment method? Thing may have changed in the last two years since I have graduated, but I was able to pay off interest during college.
Why did you take the full loan if you didn’t need to? Or was it not an option not to?
Getting the full amount is extremely easy. The couple of semesters I tried to only take the subsidized loans they gave me both and had to refund it for some reason.
Or maybe they got a job, maybe a relative helped, maybe they found $1000 by the curb. That’s beside the point.
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Do you know how much college costs?
I would hope they tell you ahead of time! I always had the option to borrow per semester and you could pay direct.
Paying down the loan while you are still there would be nice, but makes just as much sense to put that money towards the next semester.
