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BEWARE!! I took out a student loan while in college. It had a balance of $12,000 when I graduated, and after a few deferments, it grew to $18,000. I have been paying it down and eventually it'll be gone. but some unfortunately souls out there end up owing hundreds of thousands of dollars, mostly in interest and late charges racking up. Check out this website and read some of the stories. Sallie Mae is a big offender.
BEWARE!! I took out a student loan while in college. It had a balance of $12,000 when I graduated, and after a few deferments, it grew to $18,000. I have been paying it down and eventually it'll be gone. but some unfortunately souls out there end up owing hundreds of thousands of dollars, mostly in interest and late charges racking up. Check out this website and read some of the stories. Sallie Mae is a big offender.
Well, you should have known that interests incurs on your loan for the life of your loan. Having your loan deferred because of school or another reason does not matter, the interests keeps getting tacked on. But, to my knowledge all unsubsidized loans are like that (car loan, home loan, etc.).
The best thing to do is pay a little bit each month while you are in school. Since you are not obligated to pay anything during this time, whatever you send them ($5 a month....$50 a month....) will keep your interests rates down. You will still end up paying more in the end, but by at least paying the interests on a monthly basis you will shave a few thousand dollars off the final price (depending on your total loan amount).
Well, you should have known that interests incurs on your loan for the life of your loan. Having your loan deferred because of school or another reason does not matter, the interests keeps getting tacked on. But, to my knowledge all unsubsidized loans are like that (car loan, home loan, etc.).
The best thing to do is pay a little bit each month while you are in school. Since you are not obligated to pay anything during this time, whatever you send them ($5 a month....$50 a month....) will keep your interests rates down. You will still end up paying more in the end, but by at least paying the interests on a monthly basis you will shave a few thousand dollars off the final price (depending on your total loan amount).
Interest only accumulates during deferment for unsubsidized loans. If your loans are subsidized by the government, then interest doesn't accumulate during deferment. Of course, it's important to know what type of loan you have.
The OP is right about Sallie Mae. They're pure evil. I had student loans with them years ago. All the agreements I ever signed gave me a fixed interest rate. A few years into repayment, they unilaterally changed my loans to variable interest (I have no idea how they were able to get away with this). They insisted this would be better for me. Do I even need to mention that a few months later, the interest rates on my loans jumped up???
Of course interest accumulates during a deferment on an unsubsidized loan. What happens is that interest capitalizes after the deferment is over, meaning if you accumulated $5,000 during that deferment, it rolls over onto the principle. You think that's bad, try paying for graduate school, i.e. dental school. Trust me people complain all the time about "oh I'm so far in debt", and I respond, "dude you're not even remotely close to being in debt." I know dentist who are well over $200,000 after leaving Temple University School of Dentistry, and these dentists are in-state residents! Yea, enjoy your $18K in student loans because that my friend is absolutely nothing.
That's why you work on getting scholarships so that you don't have to take out the student loans. Don't feel bad though I owe $13,000 & counting from Sallie Mae.
Ummm... they SEND you notices every year about how much money you owe and how much interests has accumulated over the year... You deferred your loan, why did you defer if you didn't KNOW what that means...
Try being a pilot. $40k-$50k nowadays for flight training plus your degree, folks are looking at $80k+ in debt upon graduation. First year pay at the airlines is around $12/hr, slowly rising from there. Typical take home is around $1200-$1300/month with loan payments of $500-$800/month. Even the major airlines have taken 50% pay cuts over the last few years, the co-pilot flying that US Airways airplane for example was making right around ~$40/hr and he had been in the industry for almost 3 decades, and at his employer for 23 years.
That dentist with $200k in debt isn't making under $20k-$30k/yr for years out of college.
Interest only accumulates during deferment for unsubsidized loans. If your loans are subsidized by the government, then interest doesn't accumulate during deferment. Of course, it's important to know what type of loan you have.
I said that.
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