Ok, most students know or at least should have heard about the fact that student loan interest rates are going up 2% to 5.30% on July 1, 2005. If you didn't know this, you might want to look into consolidation to lock your rates, especially if they are variable.
Anyway, I was looking into consolidation and am very discouraged by the following points that should have helped me out. Because of varying factors as described below, I cannot receive any benefit whatsoever to help me pay these stupid things off any faster!
1. Once you consolidate your student loans, you cannot reconsolidate (as in refinancing your house or car) in order to get lower interest rates. I'd like to know why I can save by refinancing on my car, home etc, but not on my student loans. Anyone?
This leaves me with an interest rate that is only 2 points away from my home mortgage. How SAD is that! Had I taken a small loan for those classes at Forest Park, perhaps I could have enjoyed a better reconsolidation interest rate. DARN the luck! :(
2. Mohela offers a teacher reward bonus for ever year you are a f.t. teacher.
This could have saved me about 2-3% in interest every year. BUT in the teeny tiny fine print at the bottom it states: 'This does not apply to consolidated loans.' ARGH!
3. The government offers teachers a $5,000 loan forgiveness program if you choose to teach in a low-income school for 5 years.
BUT the kicker is that you have to have only received loans starting at 1998 OR started school in 1998. This means I missed the boat just because I was two years older.
4. Mohela is offering a pay-off incentive (for new consolidators) that involves giving you an approximate $1,500 principal reduction under the condition that you make your first 15 months payments on time.
You guessed, it this does not apply to preexisting consolidated loans. Once again, not fair. (Yes I do realize that everything in life is not fair, but this is my blog, and I have the right to rant, ok?)
Why is it that current persons in pay-off of their loans or students who are older, get the shaft with all these new government incentives? I was already shafted because of my parents' income when applying for student loans! This prevented me from getting subsidized loans because they made too much money despite that I covered 95% of my college expenses. I couldn't get subsidized until my parents were nice enough to take me off their "dependant list" (for their taxes) during graduate school. This is also despite the fact that I lived continually at my university for 2.5 years without living or residing at my parents' home. How can I be dependant when I don't even live there?! UGH! I saw 2k/year of their ginormous income of which somehow the government decided they were 'supposed' to be able to afford 12-14k for my tuition each year. How does that work, they have bills too you know!
I'm not saying all parents or my parents even were expected to pay for my school, but I am saying the government should not base a students' loan opportunities based on parental income that may or may not even be applied to their sons/daughters' tuition. There should be some way the government should track or verify how much the parents in fact do offer their child (if able), so that the loans can be given out accordingly. Therefore if a parent who makes 14k a year at poverty level obviously can't afford their child's tuition, that student should be have subsidized options. But if a parent makes say 100k a year but, for example, offers merely $500 a year to their child, and the Child (I prefer student) makes up the difference, then that should also be taken into consideration.
My income during college was about 5k per year, including either summer jobs or working part-time during my last three years. I'd like to know how/why the government thinks I can easily pay that off just because my parents are doing well for themselves and paying their debts and bills. In addition, I'm a teacher two years behind the new loan forgiveness incentive. Why am I getting shafted because I knew the profession was in need (and chose it as my profession), before they decided to do something to help those also interested? We all know teachers DO NOT even come close to having comparable salaries to people with similar educational backgrounds. I have two degrees and make less than 40k while a couple friends of mine might (might is the key word) have an associate's degree and make 75k? How is that comparable?
We are teaching the children of the future. Without teachers, the world would be a conglomeration of very unintelligent and possibly unproductive human beings. There would not be doctors, nurses, lawyers, dept store managers etc etc. For the longest time I was even embarrassed to tell anyone I was going into music education because even my parents thought I was 'out of my mind' and wouldn't even find a job. While they were mislead by rumors from their generation, I still think somewhere something has to change. I can barely get by, and that is with a roommate at age 28. Sometimes I have to grovel with my parents for help. I should be past this by now, shouldn't I? I hate having this constantly trapped feeling over these loans.
My parents when they were 21 were married and I was on the way. I'm not even close to being able to completely afford (with any security) my loans, car payments, rent, bills etc. I live check to check hoping that everything works out each month. How could I even afford a child? No wonder society is starting to take its time in the childbearing department! All the X generation kids are still kids themselves, forced into high-interest loans that won't be paid off until the year 2030 (ex.) The only people I know my age who are well off (or ok) are those geniuses with 30 or above on their ACT, or those people whose parents paid their loans for them.
Come on government, help us GenX people out! We're barely making it in this economy let alone with such little help for our CURRENT (not new) student loans. We are productive members of society hoping for a light in the dark tunnel that is student loans and the world of debt.
Disclaimer: I do not take any specific amount of time rewrite, revamp or edit what I write. This is a blog/ a journal; not a professional news casting website. While I feel guilty about not completely editing my writing, sometimes I just don't feel like it, and would rather focus on the meaning behind the words, rather than the specific details of how precisely it is written. :) Yes, I do have a formal, professional writing style. I've even written an A-grade thesis for my profession, but I choose to keep this personal and filled with the emotions and thoughts as they come to me.Thanks for reading, stop by anytime, and feel free to comment.
3 comments:
I'm becoming more and more convinced that much of the financial problems that our generation may get into are a result of our lifestyle and money management decisions. I'm speaking for myself first and foremost but I see some of my own troubles in others as well. As soon as I got to the University I was bombarded with credit card offers. Everyone in the dorms had credit cards or their parents were rich (or both). Not having an income it was quite easy to rack up a lot of debt quick on things like food, entertainment, clothes, books, school supplies, etc. And of course I was also on school loans. So right off the bat I started out with a negative net worth. I wasn't wise enough to take the full scholarship I was offered at a state school and I wasn't rich enough to pay my entire way through WashU.
Then when you graduate, (or escape, in my case) from school you either go to more school or find a job. I chose the latter route although it took some time and during that time I got behind on payments. But I finally got that job. And the next step is to buy a car. So I bought a new car. I could afford the payments. But the problem is that I was always living just barely within my means...with no wiggle room, living basically month to month. I didn't really know any better.
I think just now, at the age of 27, I'm starting to learn the lessons I wish I had known at the age of 18: the value of saving money every month, the value of sticking to a monthly budget and living well within your means, paying off your debt quickly. Because of the nature of interest on debt or wealth it's so important to reduce that debt and build wealth as early as possible even if it means sacrificing now. Hypothetically, if you had a choice of living basically your same lifestyle you're living now for the rest of your life or making sacrifices and living a slightly lower standard of living now but in 15 years being completely financially independent which would you choose?
Again, it's all theory. I'm the worst example of how it plays out in practice. I'm working on being more disciplined financially, but it's a huge challenge. So easy to use that debit card, you know? I need to go back to the envelope system, where each paycheck I divide up a portion of it into envelopes for things like gas, food, entertainment, etc. and not allow myself to spend beyond what is in that envelope. I used to do it when I lived on Waterman and while I went through rough times I managed to pay off about half my school loans and a car loan. Then somehow I slipped again. I think it started happening when I began to make more money. I was no longer forced to budget so tightly and began to just use my debit card whenever I felt like it. Ironically the more money I make, the less I seem to be able to manage it. Maybe I need to go work at McDonald's.
Jamin, I agree that I was bombarded with every credit card out there when first beginning college. Most times I signed up just for the free t-shirt, and then cancelled as soon as I got the card. However, I didn’t have debt until I lived up at TSU full time. I made the mistake of thinking working part-time during the school year would equal the same amount as full time during only the summer. It was close, but somehow other things, unexpected things would get in the way. My car would break down, the radiator needed replacing, my roommate would suddenly move out despite her being on a lease. I was about a month away from being sued even though I had no control over the situation. So then I started paying off my credit cards, with my student loans.
This plan went perfectly fine, and would have continued to do so had I not been required to have surgery the summer of my graduate year. Normally I would have worked, and still the left over loans to pay for my cards. However, I was forced to take medical leave, and I didn’t think any options of government help would be available to me. This was the beginning of my road to debt.
I wouldn’t say the car purchase was a mistake. My car was old and wouldn’t last long for what I needed. 2 miles a day in Kirksville is nothing compared to 40-60 miles a day in St. Louis. Even moving out and living on my own, I seriously cut back on expenses and was very close to being debt free.
For some reason I decided that putting my money in a house instead of rent would be best. My house is actually only $50 more than I was paying by myself to live in Chesterfield. It’s more room, I get tax credit on the interest, and I don’t have to spend every other Sunday at the Laundromat. My biggest mistake was going back to school, and not getting student loans to cover my expenses. Forest Park was so cheap I figured I could just pay it back in a month or two. Add that to touch-ups on the house, and I’m in way over my head two years later.
As for making sacrifices, there once was a time I rarely ever went out on weekends. I maybe went out once a month. Perhaps I should reinstate this practice, or only go out where I know it’s going to be a very cheap night. I’m hoping to acquire another roommate, and take on a part time job. If this does not work out for me, I have resigned to moving back in with my parents. They will charge me rent (which will go toward my debt) and I will have to drive much longer distances (in straight traffic) every day, but it’s something I’m considering. It will be especially difficult because my room at home no longer meets my spacing needs, as my brother now dwells upstairs while my Grandma in what was his room. Maybe I’ll go in the basement. I just know that if I can’t have my own personal space I would ‘go nuts’ emotionally there. I almost had a break down being stuck there for 3 days when my brakes failed on my car. I will certainly continue to pray on this matter and see if God sends some good messages my way.
I definitely agree with your main point though. I need to cut down even more so on my budget. Believe it or not, I actually follow it to the extent I have just about the same amount left over from every check for gas, food, fun, clothes, cleaning supplies etc. I need to be more careful with my spending of this budget and leave less up to ‘random purchases’ of things I think I need, but could probably live without.
I
Post a Comment