shouldve known better

June 27th, 2007

Should’ve known better

And now Richard Marx is playing in my head. “Should’ve known better…than to fall in love with you… now love is just a faded memory”

I am giving away my age. ;)

However, in this case, I should’ve known better than to trust someone I owed money to to do what was best *for me* in regards to my money.

This is a story about student loans. All through my four years of undergraduate education (from 1992-1996), I, as part of my financial aid package, received student loans. Three years worth originated with Sallie Mae, and the other year originated through a federal government program.

My loans were deferred through my graduate school education (which I did with fellowships and grants and teaching assistantships, no new loans were added) and then, when I finished graduate school in 2001, it was time to start paying on my undergraduate loans. I had 4 separate loans, as I mentioned before, and my first thought was — hey, I keep getting letters about loan consolidation from Sallie Mae, I can just do that and make one payment instead of 2! (The Sallie Mae ones were rolled into one lump payment already). Okay… but. There are better reasons than that, SMARTER reasons, for consolidating. And I didn’t do a single one of them. Or even THINK of them. I was just all about the simplifying and paying one payment instead of two. Oy vey.

I had no idea what I was doing. I had pretty “high” (comparatively) interest rates on all the loans because they were obtained in the mid 90′s when interest rates were not so great. Not that I even realized it because I knew nothing about interest rates, and never gave the idea of interest rates or seeing if I could improve upon them a second thought. Instead of doing any research or shopping around or ANYTHING, I just blindly called Sallie Mae and said I wanted to consolidate my loans. I swear I had SUCKER written across my forehead. And consolidate I did, no questions asked, just “make these loans all one loan thanks and do whatever you want in the process Sallie Mae”.

Which is why my student loan has a 7% interest rate. If I had waited even ONE single year to consolidate, and shopped around for rates, they would be at 4 or 5% or maybe lower instead. If I only had one ounce of a clue that maybe, just maybe, Sallie Mae was going to do what was best for *them* and not what was going to be best for *me*. Duh. ;)

At least I didn’t consolidate my loans with my spouse’s loans. At the time it was because I wasn’t sure I was done with school, but now… well, there are like 500 reasons not to. None of which I considered at the time. Heh.

And don’t get me started on the stupid payment plan I agreed to…. let’s just make these loans last my entire adulthood why don’t we?

Ah, to be young and stupid and naive and trusting again. lol. Did I mention stupid? ;)

I promise you this – my car *and* my house, I did a much better job on. I did learn a lesson from this. Eventually. I just wish this lesson wasn’t quite so expensive.

“Should’ve Known better… now I’m a prisoner to this pain… and my heart still aches for you…” I do love me some Richard Marx ;)

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10 Responses to “Should’ve known better”

  1. Consolidate. I had two loans and consolidate it to one. I pay 4.125%

  2. I did consolidate, in an idiotic manner without any thought 6 years ago. Which is why I am stuck paying 7% now. There should be some kind of “reconsolidation” clause for just-out-of-school-idiots (just me, other people just out of school I am sure are a bit smarter than I was, or at least had more common sense). ;)

    An expensive lesson but one I will rectify in the next few years, partially at least. lol

  3. Wow, fantastic advice. Thanks for the posting.


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