Unreasonable loans

<p>Another case against big loans (including )private student loans.)</p>

<p>[Money</a> College: One student’s losing battle with private student loans](<a href=“http://www.walletpop.com/blog/2010/02/25/money-college-why-one-student-advises-avoiding-private-student/?icid=main|main|dl3|link3|http%3A%2F%2Fwww.walletpop.com%2Fblog%2F2010%2F02%2F25%2Fmoney-college-why-one-student-advises-avoiding-private-student%2F]Money”>http://www.walletpop.com/blog/2010/02/25/money-college-why-one-student-advises-avoiding-private-student/?icid=main|main|dl3|link3|http%3A%2F%2Fwww.walletpop.com%2Fblog%2F2010%2F02%2F25%2Fmoney-college-why-one-student-advises-avoiding-private-student%2F)</p>

<p>"I will try my hardest to not make this piece a “woe is me” story and more on the dangers of taking out private loans (or any student loans for that matter).</p>

<p>I would first like to clarify that I come from a financially unstable household. I was the first person in my family to go to college, I am an immigrant, and my parents did not put aside money for me to go to college. I went to a private university, and besides Stafford loans, I took out private loans from Sallie Mae. I could not get a co-signer, as no one in my family has good credit, and in hindsight, I should have probably gone to a cheaper college or a community college (and gotten a degree in something other than English).</p>

<p>The Sallie Mae Student Signature Loan looked like a good option at the time because I didn’t need a co-signer and there was no cap on how much I could borrow. I didn’t have anyone to talk to about financial matters and I didn’t ask for help, either (not even a quick Google search), another bad decision. Private loans cannot be consolidated, something I did not know, and had I known, I would have changed my education plans entirely.</p>

<p>I moved off campus the first chance I got, and I worked full- or part-time, depending on my class schedule. In total, I borrowed approximately $43,000 from Sallie Mae, with an average interest rate of 9.5%. As of today, I have already accrued $22,525 in interest (on $43,000!), and the estimated total amount to be paid should I follow the monthly payment plans will be $123,350."</p>

<p>~snipped~</p>

<p>^^ This is why the gov’t will not allow student loans to be dissolved in bankruptcy.</p>

<p>$50K per year is about the average median salary in the United States, and with your salary combined it’s surprising that you don’t actually have a higher EFC. My parents’ combined salary was $70K the first year I filled out the FAFSA and my EFC was over $18,000. Considering your EFC is usually about 25% of your parents’ income I’m surprised it’s not in the ballpark of $14,000.</p>

<p>It’s also mildly amusing that you say “the ONLY things I don’t really pay for are rent, utilities, and food” because those are the three largest household expenses that take a chunk out of people’s money. High schoolers can be expected to pay the expenses for their cars and a little bit of their food. I live on my own and my rent, utilities, and half my food (assuming that you pay for half of your own food) make up 52% of my monthly income.</p>

<p>You seem like you’re in a similar position as my younger sister. She made about the same amount as you ($6,000 being about $250 a pay period, which isn’t a lot) and lived at home, and my parents income was about $70K. Middle-class but not enough to afford a school full-pay. She was an average student, though. Like me, she recognized that she couldn’t go somewhere astronomically expensive, so she chose to go to a regional public university 40 minutes away from home. She lives at home and commutes to school. Her tuition is a little less than $3,000 a year and she pays for that using Georgia’s HOPE scholarship. When she had a little trouble last year and her GPA dipped just below the average to keep it, she financed her tuition with Stafford loans - which is completely doable because as I said, her tuition is only about $3,000 a year!</p>

<p>At the University of Nebraska-Lincoln it appears that undergraduate tuition is about $7,000 per year for a resident and the total cost of attendance is $18K per year. Would you really NEED your car if you went to UNL? Very few college students who aren’t commuting actually NEED a car, especially in a college town, when everything is right there.</p>

<p>Do you have any branches of the UN system nearby you or any regional public universities? I understand there are also the Nebraka State College system universities. Could you commute to any of those? Could you, as others suggested, commute to a community college for two years and then go someplace else for two years?</p>

<p>lets see i dont pay for poptarts, crackers and spray cheese, oh and candy and the occasional yogurt(great diet, huh?) but i could easily do with only poptarts and yogurt. (so bout 20-30 bucks i can get by with for like 2 weeks. and like the 3 bucks a day in school lunch. and i dont eat out, then i snack food at work (perks of fast food)</p>

<p>the thing is my parents have 0 assets. the have like 5k in their checking and that is it. we’re considered low-income according to the lady that does our taxes. remember i only get paid minimium wage and i HAVE to drive 25-40 (depending on the weather) to get to said job. </p>

<p>and like i said previously, the closest commute is a CC, otherwise it is 2 hours away. but i have little faith in that. For instance i want to be challenged, not sleep through my classes. </p>

<p>i would need my car to get home. because it is not like im arriving at an airport. driving me around to get home or other places is not my parents idea of fun. unfortunately the public transit isnt as amazing as some cities. sorry if that sounds ignorant,; but its true. to do anything in NE you need a car.</p>

<p>Fairylight, by coming here you’ve made a good start of taking charge of your future. I am hearing something in some of your responses that I would like you to notice: Comments such as “I’ve gone over this in my head” tell me that like 95% of the population you may be “fastforwarding the video” and “playing the game from the stands.” What I mean by this is if you are sitting in the stands watching basketball, you can be doing the plays in your head but that has nothing to do with what’s going on on the court. That happens to smart people all the time – it sure trips me up a lot. </p>

<p>What I have discovered is that to play the game I have to GET ON THE COURT. Which is very scary but very rewarding. That means being completely open to exploring new things, taking concrete action, and fighting fear. </p>

<p>In your case, that might look like getting on a greyhound bus for $80 bucks and heading to Chicago on your own, and navigating your way to that college another poster mentioned, and meeting in person with an ad com and sitting in on a class and asking for advice. The “evaluation” part that our brains are soooo good at is supposed to come AFTER – not before. Do you see what I mean? Now, I don’t mean following every lead on a wild goose chase. I just mean staying open to all the wonderful possibilities that are assuredly out there for you, if you let yourself take that step forward.
You’ve done well in school and you owe it to yourself to take advantage of your hard work – which means not burdening yourself with high debt and leaving yourself free to take jobs that you’d really enjoy and not be toooo worried about what they pay.</p>

<p>For the record, having a car at all is a big ball and chain around your neck financially, and it would be worth considering giving it up in order to increase your financial capability to get the most out of your education. Just a suggestion.</p>

<p>I also want to note that Chicago is a GREAT market for creative work and people with your particular skill set. It is among the top markets for agency level work, as well as publishing and media. It is a little more reasonable to live in (compared with NYC) but the pay ranges are very strong. Get to know that city – talented young people do really well there!</p>

<p>You can start by searching these threads for one I know is out there that is called something like: “Schools that accept late applications” to see what’s available. </p>

<p>Best wishes!</p>

<p>Great advice…</p>

<p>However, the issue with finding schools with late admissions at this point won’t help much if they don’t offer great scholarships or great aid. Her family isn’t contributing one thin dime to her education. </p>

<p>So…she’s faced with…</p>

<p>1) going to a CC for 2 years, saving some money (to minimize future loans) and then transferring.</p>

<p>2) applying to a late admissions school that will give her a great scholarship for her stats.</p>

<p>3) go to UN-L and borrow about $9k a year (possibly less if she economizes and uses more of her own income.)</p>

<p>3) burdening her life with huge debts to go to one of her top choice schools.</p>

<p>BTW…</p>

<p>You mentioned that a co-worker’s D was able to get a private student loan without a co-signer. That was likely a Sallie Mae loan. Read below…</p>

<p>This year, Sallie Mae stopped offering their “Sallie Mae Student Signature Loan” and now only offers a “Smart Option Loan” that requires you to pay back interest immediately after the loan is disbursed, in an effort to target “stronger borrowers.” Sallie Mae no longer has an option for students coming from “bad credit” families.</p>

<p>If you get a Smart Option Loan without a co-signer, you will be charged a higher interest rate, and you’ll have to pay the interest while in college. Each year that you borrow more money, the more you’ll pay while in college.</p>

<p>For instance…if you borrow $10k your first year in college w/o a cosigner, you’ll get charged the higher rate and have to make payments of $109 a month WHILE in college. That amount will greatly increase for soph, junior, and senior years as you borrow MORE money.</p>

<p>As you can see, this is not a good option. By the time you’d be a junior, you’d be making interest payments of $300+ a month.</p>

<p>i didnt ask her who the loan is through. i do know that i would have tried to pay interest while in school regardless, if i could. thank you all so much for all of the great advice. i’ll be sure to consider all of it. i am thinking of emailing arcadia to see if they could get me more aid. but i am not counting on it. (see next to NYU arcadia is my next pick) so i’ll still look into the schools you’ve mentioned. i dunno, i might go to UNL this year, and look at other - cheaper schools and apply as a transfer. Thank you</p>

<p>i do know that i would have tried to pay interest while in school regardless, if i could.</p>

<p>I think you’re missing the point. If you could pay a few hundred a month towards interest alone (and still have a big balance when you graduate), then you should instead use that money to directly pay for your college costs in real time and graduate with less debt.</p>

<p>okay, yes, sorry, stupid moment -_-</p>