Student Loans and life

    Ah, life, inst it great? That is exactly how I was feeling as I moved into my house that I am sharing with nine other men here at JMU. Tv across from my couch (slash bed...I'm a college student don't judge), mini fridge within arms reach (just in case I need a good old fashioned Mountain Dew twelve ounce of pure heaven soda), and a footstool directly in front of my feet, I thought "Hey this is pretty nice". Of course one thing I was not thinking about was student loans. It's something that my generation is merely not thinking about as they accept loans whether federal or private, while partying it up every Thursday through Saturday. We don't realize the tremendous amount of debt that we are getting our selves into. Part of the reason why (and only part, I realize there are multiple factors into why we don't concern ourselves with such silly matters as our financial security) has to be how loans themselves are set up. Ever since the majority of loans have been taken over by the Federal Government, we accept these loans under the pretense that the Government is trying to help us, and that they would not give us the raw end of the deal (Also because we see politicians that I will not name tell us that they are good for us). On one hand student loans are not bad for credit and don't look bad when applying for a a line of credit, whether that's for a car, a house or the "Oh so needed credit card." But really our generation is really quite uninformed when it comes to these loans. First they just see the money allotted and accept it. If they see fifty five hundred total dollars, we believe that we get that and just pay it back after college....EH...no.... Really what you get is two separate loans from the Government, subsidized and unsubsidized. You would get three thousand in subsidized and twenty five hundred in unsubsidized. What this means is that the first loan, the subsidized, or the three thousand is going to be paid after college, and the government will pay for the interest you accumulate while pursuing your education. So college kids are right, right? Its basically pay back the money after you get a sweet gig, after "Turning up" three days a week for the best damn four years of your life right?! Once again.....ehhh.. no ..wrong...you lose. The unsubsidzed or twenty five hundred dollars we were borrowing is different. You don't pay it back till after college, but all four years you accepted that loan you accumulate massive amounts of interest. How much do you ask? Well I got this nifty letter in the email and I will just re-post it here for you all to see.

Hello SAMUEL: 

We hope you are enjoying your school experience and know that student loan debt might not be a priority right now. That's okay! We just want to make sure you fully understand your student loans and know that we are here to make this process a little bit easier for you. 

Just a reminder, your unsubsidized loans accrue 0.21 in interest every day. If you can make payments toward that interest now, you can save money in the future! Once you leave school or drop below half time, any unpaid interest will be added to your principal balance, increasing the total you repay. See how much you could save by making some payments. 

Yup that's right, the first twenty five hundred I borrowed my freshman year last year accumulates 0.21 percent interest every day! That is downright robbery, and students are not even aware of these massive debts they are accumulating. For example I am accumulating around 53 dollars every day in interest for the next 4 years on that loan... not even to mention the ones I will be taking out my next three years. If these rates had been present years ago under the Bush administration there would have been hell all over the nation, instead there is this false sense of security that has been given by the current government in place... It is sad to see how imperfect the current system for loans is. The rates are atrocious, given without a real sense of what students are getting into, and this system will sadly fail withing twenty years...probably less. There will be major uproar withing ten years after citizens have left college and find their financial situations in such a mess, setting them back for years. It sounds great on paper to centralize loans,and to get them to those who really need them, but in reality we were better of with private loans with lower interest, because after college, I know I will be feeling the affects of these loans for years to come, to tell you the truth I already feel them now. Anyways...I think I have a bowl of either Ramen noodles or Chef Boyardi calling my name.... every day....for the next four years.


Also check out this site that actually has great information on these federal loans. http://www.staffordloan.com/stafford-loan-info/faq/whats-the-difference-between-unsubsidized-and-subsidized-loans.php