Last June 11, 2011, I wrote a blog about some negative aspects of a Sallie Mae Student Loan. Part of the beginning of that blog is summarized below.
Approximate 30 years ago I wished to obtain credentials to teach high school in California. I received a student loan of $5,000 from Sallie Mae to accomplish this. My grades were very good and I had paid the loan down to a balance of $2,500. For family related reasons I was unable to finish the credentials program and moved out of California. In the confusion of that time, and being penniless, I forgot all about the student loan.
I was recently informed that, with interest, my loan balance is now over $17,500. I am 77 years old, unemployed, and rely on Social Security for my livelihood. Last Friday (April 6, 2012) I received notice from Sallie Mae that $150.00 per month will be taken from my Social Security payment until my indebtedness to Sallie Mae is paid.
For years, my employers and I have jointly contributed 15% of my salary to the Social Security Administration. This money was supposed to help support me when I retired. Now it seems that the Federal Government has spent the funds, accumulated by Social Security from workers and companies, for other projects, and will soon not have enough money to pay any retiree's pensions. To delay that disaster, it is trying to reduce all Social Security payments any way it can.
It will take over 116 months, or about 10 years for Sallie Mae to collect my student loan arrears. And that is only if they do not continue to add more interest to my indebtedness. At that rate I doubt that I'll live long enough to pay back that original $2,500 debt.
My advice to any prospective student is to NEVER take out a government student loan. I know a young couple who owe $300,000 to the government to pay back student loans. They may never be able to buy their own home. If you need and qualify, there are many other types of loans available. You should take advantage of them before taking an education loan from the government. Also, it might be better in the long run to work and go to school simultaneously. It might take longer to obtain a degree, but you won't owe a "house-sized" bill to the government after you graduate. And, working for a living is an education in itself.
