When I was in high school it was well understood by my peers that college was the next step. We were frequently quizzed about where we were going and what we would study with our teachers and administrators. There were tutor programs and practice tests to prepare us for the SAT and ACT standardized tests. I knew halfway through my senior year where I would attend school and even had the luck of being roomed with my best friend. I chose to study marketing because my older sister had just graduated with marketing as her major. So I knew where I was going, where I was sleeping and what I was studying. The question no one asked or prepared me to answer was: how was I going to pay for this?
Once I arrived to my private university in the nation’s capital it was like living out a dream. I imagined going to college for so many years and I was finally here. I can remember the anxiety all over my mother’s face as we waited in line for financial aid. I was very annoyed, desperately wanting to go outside and make new friends. I was completely oblivious to the extremely obvious fact that my family could not afford the private university I so desperately wanted to attend. All of my older siblings went to college on full scholarships, I was the only one that had to pay for my higher education. After my mother and I signed some paperwork in the financial aid office everything was set. My first year of college was paid for and I was in $25,000 worth of debt.
Each year after that I became a little more aware of the cost of my education and a lot more desperate to continue attending my dream college which required further funding. At the time Sallie Mae seemed like the only lender that actually cared about students. All of my friends, even the ones that had been denied by several other lenders found approval with Sallie Mae. I continued to take out somewhere between $25,000 and $30,000 each year for my five year collegiate career. Located in Washington, DC, not only was the tuition to my private university increasing annually, the cost of living was astronomical. The costs of dorm rooms were equal to or more expensive than apartments so my 19-year old genius self decided it was better to get an apartment. Hence, the fifth year of undergrad spent making up classes I completely fumbled in my first year off campus.Credit: MorgueFile Stock PhotoBy my senior year I was signing my name to loans with a 30% interest rate. I remember asking an advisor if I should be doing that, it seemed like an obvious bad deal. She bluntly told me that I had no other options and if I didn’t I would need to withdraw from school. While you’re in college it is hard to imagine life after college, especially when you’re twenty-one years old (and under the impression you are invincible). I would have this unreasonable idea in my mind that “something” was going to happen after I graduated and I would be able to pay my $100,000+ in student loans back. Everything would be worth it.
What actually happened was I accepted an offer for an executive position with a fortune 500 company in Los Angeles making a whopping $50,000 salary (the irony is that at that time I actually thought that was a lot of money). Once taxes and healthcare costs were deducted I was taking home about $2,400 a month. After paying Los Angeles rent (I could only afford Inglewood rent for my first year), utilities, gas, groceries and insurance I was left with under $1,000 a month. This was great for my first two months of being an executive. I could afford to save after enjoying Los Angeles with friends as I adjusted into my new life. Then my six months of forbearance following graduation lapsed and it was time for me to start paying back the ridiculous loans I had taken out as a dumb teenager. My first Sallie Mae bill was $2,100. Not only was the number impossible on my salary, Sallie Mae was not interested in negotiating my monthly payment. Their advice was to let my account lapse and then (as a delinquent account holder) I would qualify for different payment plan options. Eventually I took their advice and got my payments down to $900 a month and interest reduced to 3%. Before I was put on a payment plan my payment was paying for complete interest, not affecting my principal amount at all.
I know that I am not innocent in these decisions, I was well aware that I was signing my name on paperwork that contractually held me responsible for repaying the loans. I also knew that six months after graduating I would have to start paying these loans back. With that said, I find it a bit predatory to offer loans with extremely high interest rates to teenagers in the process of making a dream of theirs as well as their family’s a reality. It is obvious to me that these kids will do any and everything possible to fulfill their dream. Furthermore, I find it negligent on the high school and collegiate staff to never educate these teenagers about the costs of college and their options for paying them. Offering these loans as a guidance counselor or advisor would lead someone into believing that you think they are a good idea. It is not fair to lead teenagers into a lifetime of debt, burdened by their higher education, knowing that they are not likely to ever be in a position to repay them. Stop the predatory lending and stop selling fairy tales to the high school seniors. If they are going to be treated as adults it is only fair you give them enough information to make educated decisions. They are the only ones that will have to live with the consequences of the actions and contracts they bind themselves to.
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