Submitted 2 weeks ago by FenrirIII@lemmy.world to mildlyinfuriating@lemmy.world
What is this horseshit? Almost $2k in interest this year and it will not even let me throw money against the principal.
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
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
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.
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
Is it not like, really illegal to prevent people from paying back debt?
When has legality ever stopped them fucking over regular people?
mortgage prepayment penalty fees are reasonably common and happen if you pay too much on it too early
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.
Noone should ever be putting money into savings accounts. You lose the difference between 2% interest you collect on savings account and the inflation rate while money is in savings account. Your finacial buying power is decreasing by like 5% the entire time it sits in there.
IRAs should be the new “put your money in savings” response. They should look up the options like 529 plans or ESAs (rducation savings account, formerly known as educational IRA) with an advisor for their tax advantaged benifits like not paying capitail gains taxes on growth or interest accrued as long as its used for education or medical dispersments. People rarely understand how much money they make by taking advantage of tax free contributions and withdrawls options.
The average growth rate for IRAs in the US is 7%-10%. So instead of losing 5% buying power from the money you save in a savings account, you are now earning 7-10% ONTOP of the 15% you make by NOT PAYING CAPITAL GAINS TAX.
Got a kid? Start putting $20 direct deposit into ESA at conception. 52 weeks times $20 = $1,040 per year. Times 18 years = $18,720. Avg cost of 4 year tuition at non-private school in US span from $8,000 to $18,000.
You could even set it up so the 401k you contribute to, rolls the same amount your employer matches per paycheck from your 401k (or 403b) account into a ESA where you would be taxed on the roll over contributions, but because you are only moving the amount your employer matches, then technically your employer is covering the taxes paid contributing to you kids ESA. The total amount saved and used to pay for college is then 100% tax free to you.
Compare that to paying back a loan at time tuition is due and you are responsible for the taxes taken from each paycheck, the interest on the loan and all ontop of the loan itself. Its adds up to thousands of dollars you spend for not preparing ahead of time.
If your kid is dumb then go with shit like a 529 plan that can be used at any time for any amount as tax free distributions as long as it goes towards medical expenses, educational expenzes or i wanna say new home purchases. (Dont quote me on the last bit)
I’ve said it before and I’ll say it again. Student lending is the most preditory lending in this country.
Might be tied with the buy now pay later apps
No, because you can discharge all that in bankruptcy. You can’t discharge student loan debt in bankruptcy.
I’m assuming you’re from the US considering you’re being treated like a commodity.
This sounds infuriating, not just mildly infuriating.
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.
You can take the money you’d pay off and invest it instead, as a hedge.
Im not saying its ideal, but its a little better than nothing.
I’m 46 and I still have student loans.
my neighbor is in her early 50s and is still paying off grad school (an advanced degree, but still, fuck)
My job paid for my grad school degree thankfully, but nothing like those consolidated undergrad student loans following you around for the rest of your life.
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.
yup. graduated in 99; had to take on some debt, had to get the army to pay for the lion’s share, but if I were looking at the #s (and world situation) today no fucking way would I do either.
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.
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.
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?
This thread makes me incredibly glad that at the last minute I decided to not go to college. My significant other still has loans out the ass with one hell of a scholarship to a not even considered expensive school. Just insanity since we’re about 40. Glad I chose the trades. I know they’re not for everyone but thank fuck.
Oh man same tbh.
I remember being in elementary school and asked about college, telling my teacher I’m poor and not going to college and she was saying I should still try or consider it. Decades later and I’m still so glad I didn’t listen. I knew my situation even as a 4th or 5th grader.
Yeah maybe my work isn’t easy but God damn I can walk into any city or town and find work, I have skills to impress and the only debt I have is from my cat’s medical scare which is one tanked credit card big whoop.
Yeah, and it’s nice when you can look at places you’ve been and done work at and be like “I did that.”
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.
was making a $150 payment amonth,
Consider yourself lucky, that isn’t that much
Why did you take the full loan if you didn’t need to? Or was it not an option not to?
Or maybe they got a job, maybe a relative helped, maybe they found $1000 by the curb. That’s beside the point.
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.
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.
Student loans are a grift. You’re getting grifted.
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.
So by those numbers, if you will owe another 30k next year, and this time you have 6k to pay, you should put your 6k fully towards the 30k of new loan, and nothing towards the 26k you owe in loans. That’s why they lock you out from paying the loan, they’re forcing you to make the mathematically optimal choice, unless you happened. To be on the verge of paying 100% of your tuition each year.
Why not just borrow less this year and have a lower principal?
DarrinBrunner@lemmy.world 2 weeks ago
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.”
bitjunkie@lemmy.world 2 weeks ago
We 100% did learn about amortization in high school math, no idea if it’s still taught though
thejml@sh.itjust.works 2 weeks ago
It is. Actually my daughter learned it in middle school (7-8th grades). Not that people have many other choices for college cash.
danc4498@lemmy.world 2 weeks ago
Also, they make loans standard so they can charge more for the services.
fluffykittycat@slrpnk.net 2 weeks ago
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
sunsofold@lemmy.zip 2 weeks ago
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, but they definitely won’t get you the same paycheck.
DMck@lemmy.world 2 weeks ago
Trade school grads often getting better pay than ‘degree’ education. Often can get paid internships while learning trade.
Switorik@sh.itjust.works 2 weeks ago
What do you consider good job?
jpreston2005@lemmy.world 2 weeks ago
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. 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.
FUCK THIS COUNTRY
AA5B@lemmy.world 2 weeks ago
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