Mary Jacob:
“My final attempt to help those that don’t understand the student loan game.
Mortgage: At closing you know exactly what you will pay back. Interest is calculated monthly. Extra payments pay down principal.
My Mortgage was $135k for a 30-year loan in 2004. Refinanced once for lower interest rates and terms. We made a couple of lump sum principal payments and the house was paid off in 2021. That’s 13 years early.
Student Loan: Interest is compounded daily. Extra payments go toward future payments, not to pay down the principal. If you don’t make a monthly payment because you are paid up in advance, your interest is calculated daily.
I was told if ai made may payments on time (I never missed a single payment nor paid late) loan would be paid off in 20 years. I won’t say the college financial aid rep lied to me. What I will say is she probably didn’t understand t herself.
I was told about the Public Service Forgiveness. Make 10 years of payments and the rest is paid off. Well, when I applied, I was told my loans weren’t eligible.
I borrowed $45,000 in student loans
First 10 years I paid $275/month = $33,000
Next 15 years I paid $550/month = $99,000
1 final lump sum payment = $16,000
Total %148,000
Mortgage $135ki paid off in 17 years for a total of $183,000
Student Loan $45k paid off in 25 years after making a final $16k payment for a total of $148,000.
Yes, you can say everyone should know better, but chances are you wouldn’t have known any better either.
We are told over and over that your way out of poverty is through education. Yet, the poorest, most vulnerable, first-generation college students are just happy to be living their dream and trying their hardest to escape the cycle of poverty.
What the government should do is take every penny people have paid toward interest and apply it to the principal and preferably stop charging interest. This would probably pay off many loans. At the most, the loans should be set up like a mortgage.
Anyone who reads this and doesn’t understand they system if broken doesn’t want to understand.
Blinded Sphinx (Paonias excaecata)
Ice Age National Scientific Reserve Unit, Wisconsin, USA
9-21-2012 IMG_6135aaaaaVsn3p [D:\...\New Folder (24)... ]
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