Wednesday, February 1, 2012

Student loans are EVIL!


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Okay, okay.. they aren't EVIL. But right now I feel like they are! 

I know that student loans are how many people made it through college... and some of them are very thankful. However, I feel like I was taken advantage because I was young and stupid. 

Back in 2007, I decided I needed to go to college. It had always been a dream of mine... but since I moved out at 17 and had to support myself the dream wasn't realized immediately following high school. In high school I had a couple scholarships and thought that college wouldn't be too hard on the budget. I earned good grades and figured that most colleges had scholarships for those who did. 

Well, anyhow. In 2007 I already had four young children (four under 4 in fact). I knew it wasn't possible for me to go to a traditional school, so I started to look at online schools. I decided that University of Phoenix seemed like the best option. I put in my info to be contacted and within minutes I was called. 

After that everything happened SO fast. Within a few hours I was signed up for college, had my loans and financial aid stuff filled out and signed, and was getting ready to start the very next week. 

I remember there were two types of loans that I signed up for...and I did not understand what they meant. I was told that I was getting both subsidized and unsubsidized loans.  In addition, I was getting a Pell grant. With all three of those I would be able to go to school with no money out of pocket. I was psyched (but boy, I shouldn't have been)! I honestly thought one of the loans were a type that could be forgiven. I probably misinterpreted the person I spoke with, but perhaps it was made to seem that way. 

Now I know that subsidized means that the government pays the interest while you are in college, and unsubsidized means that the interest on the loan accrues. 

Now let's jump to current time. I have been out of school for nearly 6 months...my loans will need to be paid soon. I borrowed them, so I know I have an obligation...but boy do I wish I would have realized how much I was really borrowing and how much it would cost to pay back. 

For my associate's degree alone I have over $30K in debt. Now, this has a lot to do with the school I went with... online schools are not cheap. I just wish I had realized this... it would be nice if FAFSA could give you a total of how much you have borrowed to date each year when you reapply. 

Another thing I did not know about student loans is how unforgiving they are. They never go away (unless paid), you can't claim bankruptcy with them, and since they are government loans they can easily garnish your wages and keep your tax returns if you are late on the loans.  I can say my knowledge of these loans is not great...and I have a LOT to learn still (especially going into the repayment phase) so please don't count on this little post for perfect information. 

I also learned that banks do not like to give out a mortgage to people with a lot of student loans. Our household income is not huge, so the student loans make our debt ratio scary. With the student loans banks are also leery because they may not be the first to be paid... you can't put a student loan "below the line" in your budget because you simply have to pay it, or else.

So, if you are looking to get loans... BE CAREFUL. Do not go into the process hastily, it could seriously turn into a bad situation. Research to see whether or not you really should get student loans... and all the details that student loans entail. If at all possible, avoid them. And never, ever, trust a person who is trying to get you to go to a for profit school to tell you the complete truth... they are probably paid based on how many people they can get to sign up because the school wants as many people to go there as possible. 

To top all of this off... I now have an associate's degree that hasn't helped me further my career, and hasn't helped me get into a better job to pay for all these loans. Hopefully it will eventually (so that I at least feel justified for getting these loans and taking time to actually learn the knowledge needed for the degree), but for now I feel like it was all for nothing and I am stuck with an enormous bill.

This post is completely my own opinion personal opinion. Please do research on your own and do not rely on what I have in this post to be all the information there is or the most accurate. I am not responsible for any financial decision you make or don't make. 

5 fantastic comments:

Life As Wife said...

Right there with you! I borrowed extra to have spending money which was a huge mistake! 5,000 quickly tens into 20,000 when you add interest.

I have an amazing degree but decided to be a say at home mommy. 25,000 in debt to change diapers...

Rebekah Markewich said...

Double check on loan forgiveness. I have student loans from the government (subsidized) and I am income based repayment plan that is often free or very low. Anything is forgiven after twenty years. You have to apply for it. I did it with Sallie Mae and it was so easy. I wish I could give you the link but I'm on my phone. My email is rebekahbethany at gmail.com if you are interested.

Rebekah Markewich said...

Sorry about the grammar. Haha- I CAN write. Lol. Silly phone.

Rebekah Markewich said...

Double check on loan forgiveness. I have student loans from the government (subsidized) and I am income based repayment plan that is often free or very low. Anything is forgiven after twenty years. You have to apply for it. I did it with Sallie Mae and it was so easy. I wish I could give you the link but I'm on my phone. My email is rebekahbethany at gmail.com if you are interested.

DisneyMom said...

I went to an online college and I paid for it out of pocket so I don't have any loans. BUT, I am starting college again to pursue my Bachelor's Degree! Not looking forward to the loans though!!!

 
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