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Saturday, January 12, 2008

Sallie Mae Owns My Firstborn Child

During my final year of college I added to a few other loans I had when I took out a loan through Sallie Mae, the Gordon College 'preferred lender.' If I had done my homework, I would have realized that the interest rates Sallie Mae offered were sky high and that Gordon endorsing the lender as 'preferred' was probably not entirely in accordance with the College Loan Code of Conduct - Gordon gets kickbacks from the college's relationship with Sallie Mae, and the financial aid office ought to do better by their students than entrapping them with some of the worst loans possible. In any case, I didn't know that 6 months after graduation I would be slammed with a 9.5% interest rate.

And I didn't know that in the first year of making regular payments on the loan, I would pay over $800 in interest alone.

And I didn't know that by the end of the first year of making payments I would have paid thousands of dollars...

...and be left with a balance higher than the amount I had originally borrowed.


  1. I agree. I had a Signature loan from Sallie Mai that was at 10.5% when I graduated. I paid it off in 5 months because i knew my financial future depended on it. When I paid it off, the interest had blossomed to a healthy 12.5% and I ended up paying almost 50% more then the original loan in interest. If I hadn't paid that off....

    On the plus side, the wife and I are saving as much money as we can and paying ahead on our other student loans. We hope to have them paid off within 2 years at this rate. :)

  2. Yeah, Nathan and I always pay more than the payment due, but with four separate loans - and the fact that neither of us are computer programmers, ahem, Gregg ;) - we couldn't get them paid off as quickly as we would like...

    You are really fortunate that you were able to pay yours off so soon after graduating! Your sweet no-rent situation was a really nice arrangement. *jealous*