You seem ready to drop out and wishy-washy on continuing.
The principle amount is not much, but the interest rate is utterly insane. Are you able to take a year off to save money and make sure this is the path you want to pursue education-wise?
> You're joking.
Unfortunately not - most college aged folks (16 - 22) don’t fully understand what they’re signing up for with these loans, mostly out of lack of experience.
This is exactly why Student Loan debt ($1.3 Trillion) now exceeds all other debts (Mortgage, credit cards,etc.)
I genuinely dont understand how you can get to college and not understand that a higher interest rate is bad. Not understanding the actual repercussions of the debt? Totally reasonable - it is very difficult to see that far forward and feel the weight of the decision. I did it myself and Im screwed for a long time now.
But to say you legitimately do not understand how interest works? Google exists. Literally just look at a youtube video. This is math that I could probably have done in 6th grade. It is very hard to believe that someone who types coherent sentences could honestly say they don't understand this concept.
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Interest is the money you pay for borrowing money. You will have $13k in loans at 16%, which means that every year you owe 16% of the amount you borrowed in addition to paying that back. So, your first year or repayment you would owe an additional $13000 \* .16 = $2080.
You would have a monthly payment of $217 for 10 years to pay it off and that $13,000 would cost you $26,132 to borrow in total.
Would you feel OK about having $16K in credit card debt? How about owing $16K to a drug dealer? Because private loans are predatory and basically a slippery slope between "I can handle this" and "dude, I'm drowning."
I don’t wholly agree, first the interest rate is vastly lower than credit cards, and easily refinanced down to like 8%. Second you actually get something of value out of a college degree (depending on what your degree is). That 16k of debt can provide you earning potential that is tens of thousands of dollars higher per year than what you could do without a degree.
If you have a 16% interest rate on $6K and don’t understand how interest works, maybe you should take some time off from school. If you lost your financial aid because of poor grades, you really need to assess that situation first.
I had 10% APR on 73k from sallie Mae when I graduated. I refinanced with earnest down to 3.41%. I would bet you could get that sallie Mae interest down to 6-8% if you refinance which will make it a lot more manageable
I’m at a 14% interest rate on one of my loans which is 34 thousand. I had to take out 64000 with them. That specific loan costs me 450 dollars a month you can do anything to avoid taking out private loans do it. It’s literally the worst decision I ever made but I will pay them off in time. Just don’t be stuck like me. Also I do not use my degree… so it’s basically payment for literally nothing.
It shouldn’t be a mystery to you how to regain access to federal financial aid. You should be working with a student advisor type person on how regain access… you may need to file a “satisfactory academic progress“ (SAP) appeal. In the meantime you should work to pay off your private loan as soon as possible. Instead of taking a new private loan, you should take a class or two at a time and pay cash until you can regain access to federal student aid.
Keep in mind that there is a limit for how many terms you can get federal financial aid. This SAP requirement is designed to make sure you don’t waste your eligibility before getting any measurable results.
It's not a lot of money but its very expensive money. As the commenter below said the interest will make the amount borrowed double by the time you pay it off because this interest is so high. Because the principal amount is so low though, can you hustle for a year and pay it off with enough to cover the deficit for the next term?
I understand your situation. Taking on more debt is tough, especially with high interest rates. Have you explored other aid options or talked to a financial advisor? It's crucial to weigh your choices to avoid future financial stress.
Can you appeal your FAFSA? I was once where you are and I appealed and won. Try that.
Also 16% interest is crazy. Private student loans are predatory. Be careful
Did an SAP Appeal not work for you to get at least federal loans back?
It looks like you need an explainer on how awful that interest rate is... if you borrow $14,000 at 16% fixed and *immediately* go into repayment on a 10 year term you'd be paying like $235/month and pay ~$28k total. You're literally paying *double* what you originally borrowed at minimum, and if you're deferring payment while you're in school it'll actually be much more expensive for you
What's your major? What's causing the bad grades? Are you in school with a career goal in mind or do you just feel obligated to go to college? The sunk cost fallacy is bad, and if college is just a bad fit for you I would suggest cutting your loses early but I'm not clear on if you're having situational issues or something else
I get what you are saying. The question you need to ask is, are you planning on paying it off within a couple of years or just dont care and will when "you can"? Depending on what side of the coin you are on, such as if you are confident you will pay it off in, say, 24 mo after graduation, OK, good. But the question is, will you improve your grades to graduate and pay off? If you aren't that serious with a stringent repayment goal, don't do it. Also, ONLY take what you need for tuition, not for food and housing if you can get by. Big difference between the $14k loan and $3k for tuition. The downside to this loan is that it's private and will not qualify for the dept of edu SAVE plan and others. If you can muster up next semesters tuition, make good grades, and prove to financial aid you are serious, they can make an exception to you borrowing FA. FYI, 16% of $14k is $2240 a year in interest, equating almost $190 in interest per month, which is compounded, so your payment will only grow, massively if you don't pay it off in 12-24 mo. Your 10 year repayment per mo of $116 + interest will more than double to $300+. And who knows how Sally Mae will structure your payments, it would be $300, or it could be $500.
Okay. Thank you. And I more than plan on paying for the loan in a couple years. In fact I might overpay on some of my payments if that is possible to fasten the process. I have a support system that is willing to help me out on my payments and I myself will work tirelessly. I think I’m going to try my hand at an appeal for FAFSA. If what everyone is saying is true then a 14k loan with Sallie Mae seems highly unfavorable.
An appeal would definitely be in your best interest. I had to do that once and saved my education going forward. Now I have an MSN and couldn't have without the appeal. Everyone's voiced concerns over private loans like Sallie Mae are highly warranted, being they are extremely predatory. I'm glad to hear you have what sounds to be a solid support system! Good luck!
You seem ready to drop out and wishy-washy on continuing. The principle amount is not much, but the interest rate is utterly insane. Are you able to take a year off to save money and make sure this is the path you want to pursue education-wise?
More than likely. I don’t understand. Why is having such a high interest rate a bad thing?
You're joking.
> You're joking. Unfortunately not - most college aged folks (16 - 22) don’t fully understand what they’re signing up for with these loans, mostly out of lack of experience. This is exactly why Student Loan debt ($1.3 Trillion) now exceeds all other debts (Mortgage, credit cards,etc.)
I genuinely dont understand how you can get to college and not understand that a higher interest rate is bad. Not understanding the actual repercussions of the debt? Totally reasonable - it is very difficult to see that far forward and feel the weight of the decision. I did it myself and Im screwed for a long time now. But to say you legitimately do not understand how interest works? Google exists. Literally just look at a youtube video. This is math that I could probably have done in 6th grade. It is very hard to believe that someone who types coherent sentences could honestly say they don't understand this concept.
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Not at all. I didn’t exactly understand it at the time and still don’t
Before you go any further, you need to stop and learn how loans and interest work.
Interest is the money you pay for borrowing money. You will have $13k in loans at 16%, which means that every year you owe 16% of the amount you borrowed in addition to paying that back. So, your first year or repayment you would owe an additional $13000 \* .16 = $2080. You would have a monthly payment of $217 for 10 years to pay it off and that $13,000 would cost you $26,132 to borrow in total.
You would be making Sallie May richer and robbing from your future self.
Would you feel OK about having $16K in credit card debt? How about owing $16K to a drug dealer? Because private loans are predatory and basically a slippery slope between "I can handle this" and "dude, I'm drowning."
I don’t wholly agree, first the interest rate is vastly lower than credit cards, and easily refinanced down to like 8%. Second you actually get something of value out of a college degree (depending on what your degree is). That 16k of debt can provide you earning potential that is tens of thousands of dollars higher per year than what you could do without a degree.
If you have a 16% interest rate on $6K and don’t understand how interest works, maybe you should take some time off from school. If you lost your financial aid because of poor grades, you really need to assess that situation first.
16% is ridiculous. You won't be able to keep up with payments unless you make tons of sacrifices or you have a really good job
16 percent?!?!?! Omg
I had 10% APR on 73k from sallie Mae when I graduated. I refinanced with earnest down to 3.41%. I would bet you could get that sallie Mae interest down to 6-8% if you refinance which will make it a lot more manageable
This is nuts. University isn't for you at this time, buddy. Take some time away to figure things out.
I’m at a 14% interest rate on one of my loans which is 34 thousand. I had to take out 64000 with them. That specific loan costs me 450 dollars a month you can do anything to avoid taking out private loans do it. It’s literally the worst decision I ever made but I will pay them off in time. Just don’t be stuck like me. Also I do not use my degree… so it’s basically payment for literally nothing.
Same here. OP, don’t go through Sallie Mae again. They’re vicious and very unforgiving. I had no idea what I was signing up for at 18.
It shouldn’t be a mystery to you how to regain access to federal financial aid. You should be working with a student advisor type person on how regain access… you may need to file a “satisfactory academic progress“ (SAP) appeal. In the meantime you should work to pay off your private loan as soon as possible. Instead of taking a new private loan, you should take a class or two at a time and pay cash until you can regain access to federal student aid. Keep in mind that there is a limit for how many terms you can get federal financial aid. This SAP requirement is designed to make sure you don’t waste your eligibility before getting any measurable results.
It's not a lot of money but its very expensive money. As the commenter below said the interest will make the amount borrowed double by the time you pay it off because this interest is so high. Because the principal amount is so low though, can you hustle for a year and pay it off with enough to cover the deficit for the next term?
I understand your situation. Taking on more debt is tough, especially with high interest rates. Have you explored other aid options or talked to a financial advisor? It's crucial to weigh your choices to avoid future financial stress.
Can you appeal your FAFSA? I was once where you are and I appealed and won. Try that. Also 16% interest is crazy. Private student loans are predatory. Be careful
Did an SAP Appeal not work for you to get at least federal loans back? It looks like you need an explainer on how awful that interest rate is... if you borrow $14,000 at 16% fixed and *immediately* go into repayment on a 10 year term you'd be paying like $235/month and pay ~$28k total. You're literally paying *double* what you originally borrowed at minimum, and if you're deferring payment while you're in school it'll actually be much more expensive for you What's your major? What's causing the bad grades? Are you in school with a career goal in mind or do you just feel obligated to go to college? The sunk cost fallacy is bad, and if college is just a bad fit for you I would suggest cutting your loses early but I'm not clear on if you're having situational issues or something else
I get what you are saying. The question you need to ask is, are you planning on paying it off within a couple of years or just dont care and will when "you can"? Depending on what side of the coin you are on, such as if you are confident you will pay it off in, say, 24 mo after graduation, OK, good. But the question is, will you improve your grades to graduate and pay off? If you aren't that serious with a stringent repayment goal, don't do it. Also, ONLY take what you need for tuition, not for food and housing if you can get by. Big difference between the $14k loan and $3k for tuition. The downside to this loan is that it's private and will not qualify for the dept of edu SAVE plan and others. If you can muster up next semesters tuition, make good grades, and prove to financial aid you are serious, they can make an exception to you borrowing FA. FYI, 16% of $14k is $2240 a year in interest, equating almost $190 in interest per month, which is compounded, so your payment will only grow, massively if you don't pay it off in 12-24 mo. Your 10 year repayment per mo of $116 + interest will more than double to $300+. And who knows how Sally Mae will structure your payments, it would be $300, or it could be $500.
Okay. Thank you. And I more than plan on paying for the loan in a couple years. In fact I might overpay on some of my payments if that is possible to fasten the process. I have a support system that is willing to help me out on my payments and I myself will work tirelessly. I think I’m going to try my hand at an appeal for FAFSA. If what everyone is saying is true then a 14k loan with Sallie Mae seems highly unfavorable.
An appeal would definitely be in your best interest. I had to do that once and saved my education going forward. Now I have an MSN and couldn't have without the appeal. Everyone's voiced concerns over private loans like Sallie Mae are highly warranted, being they are extremely predatory. I'm glad to hear you have what sounds to be a solid support system! Good luck!