One Card Down and the Terrible-ness of Student Loans

Logan: I just impulse paid off one of my cards. Haha. The balance was $300 and I owed $100, and so I just paid it off. Wild and crazyyyyyy.

Mike: Congrats! You should also close the account now. You have other accounts open, so it shouldn’t be a big deal, and also, you’re not looking to apply for a mortgage soon.

Logan: That is a true statement. There has never been a truer statement.

Mike: YES

Logan: I mean, I guess technically I should have put that extra payment towards the J. Crew card, which I picked first because of high interest, but i just wanted to be done! It was right there and I TOOK IT.

Mike: No, you’re snowballing instead of avalanching, which is good.

Logan: I’m flurrying. I’m wintery-mixing

Mike: Haha, yes, you’re doing your own thing.

Logan: Marching to the beat of my own drummer. Flying my own flag. Whistling my own tune.

Mike: All aboard the Logan train! Destination: No more credit card debt!

Logan: Okay, let’s talk about you. I know you’ve explained how you paid for grad school, but have you explained how you paid for undergrad? It’s been interesting to read how people paid for school. 

Mike: Nope. Not yet. So for undergrad, I had some scholarship money, and I took out loans and worked on campus to cover the rest.

Logan: How does one take out loans as a high schooler?

Mike: Haha, well you fill out the FAFSA form. And then if you come from a lower middle income family like mine, you’re given financial aid, and loan options. And you look it over, think it over, and then sign the paperwork. Most of the loans come from the federal government and don’t require a co-signer. Others—private loans require a cosigner, but you can work around that. Usually your parents cosign. But mine didn’t, or couldn’t. So to borrow, I had to pay a small penalty.

Logan: Haha, whaaat? Like what kind of penalty?

Mike: So, with some private loans, if you can’t get a cosigner, they will sometimes offer you another loan that doesn’t require a cosigner, but those loans come with a higher interest rate. Or they’ll tack on a fee at the top, which is what happened to one of my loans. So for example, on a $5,000 loan, if my parents cosigned, I would just be given a $5,000 loan and would pay it back with interest later. But without a cosigner, the penalty was a few hundred dollars on that loan, so I would have to pay back something like $5,300 on a $5,000 loan. That $300 was added on the top right away, so I had to pay interest on that too.

Logan: That’s wrong. I find that to be wrong.

Mike: Haha, YUP. Student loans have a lot of terrible aspects to them. I mean, having to pay a penalty or a higher interest rate because your parents can’t or refuse to cosign for you is just not right. Students have a lot more trouble with private loans than they do with federal ones. Like, way to make things financially harder for people who have things financially hard! It all seems very backward.

Logan: Srsly. Okay I’m looking for a picture to illustrate this. MOVIES ABOUT STUDENT LOANS. Not getting a lot of hits here. Did Felicity take out loans to pay for school?

Mike: Haha, I’m not sure. I mean, she did work at Dean & DeLuca, but I don’t remember if she was working there to pay for school.

Logan: I think Ben was? And that’s why he lived off campus because it was cheaper? I JUST DON’T KNOW. Okay I just read an entire series synopsis of The OC and I don’t think any of them took out loans either. I bet someone had to on Saved by the Bell. 90210? Dawson’s? According to the Internet, one of the characters on 2 Broke Girls had student loans. But then they had a party and paid them off with the proceeds. Because that’s realistic.



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