Don’t sign up for private student loans if you can at all afford not to.
I signed up for the “Smart Option” Student Loan with Sallie Mae at the beginning of my junior year because my former sorority was threatening to send a collections agency after me (so I guess don’t sign up for a sorority if you’re poor either, because they’re bullshitting you when they say it costs the same as the dorms or living on your own).
I didn’t really know what I was getting into when I signed up for the loan—I was just desperate and was being harassed by the national sorority organization. I got endless mail and phone calls from them, even after I provided verified statements of my financial situation.
I got the loan to stop the harassment, and immediately spent it to pay off my sorority dues for the house that I wasn’t even a member of anymore (basically, they took away my membership when they found out I was poor. Message me if you want to know the whole story, although I’m sure I’ve written about it on here before).
I knew I’d have to pay it back eventually, but silly 20-year-old Kelly didn’t look over the pages and pages of terms first. I just chose what Sallie Mae said would be the cheapest and easiest option for me and my situation and signed on the dotted line.
Now, about 6 months out of school, I still don’t have a full-time job or reliable monthly income. C’est la vie. I’m glad to at least be living at home and saving a bit of money there (especially in light of all of the reports on astronomically high rent as of late).
I called Sallie Mae today about repayment options, as my first payment is due soon and I was hoping to reduce my monthly payment to something manageable for a girl with no idea what she’s making month-to-month and no job as of yet.
And now I’m angry at my own naivete, and at the fact I joined that damn sorority in the first place and dug this financial hole, because I was told in no uncertain terms by the pleasant customer service rep that there was no option to reduce my monthly payments.
The “Smart Option” plan that I’d chosen locked me in at nearly $200/month.
My only options are as follows:
- "going back to school," as the rep said, and accruing even more debt but putting my current payments on hold
- or forbearance. And I can only forbear for 12 months total in the lifetime of my repayment. And they can’t be consecutive—I can only forbear for three months at a time, with six month intervals in between. Oh, and I have to pay a $50 fee to forbear.
I realize I technically have no one to blame but myself for this, but I can’t help but feel a bit scammed.
I was 20, in the middle of school with bright hopes for a job right after I graduated with a steady salary. After all, I’m smart and well-spoken and I’d always assumed that, with hard work, things would fall into place for me. And I was panicked, harassed and threatened by my former sorority into making what’s turned out to be a terrible financial choice.
I’m going to make this month’s payment, but after that, I honestly don’t see any other option but to forbear for the first 3 of my 12 months.
What confuses me is Sallie Mae’s refusal to let me make reduced payments. You’d think they’d prefer getting some money to no money at all. What if I use up all my forbearance in the next few years and fall on hard times and truly don’t have the money to pay $200/month?
Am I allowed to pay $50 here and there to still attempt to keep up with my financial responsibility, or will they just send the loan sharks after me without a thought?
It’s giving me more than a little anxiety to think about.