Student loans are a trap… anyone else stuck like this

Student Loans
1

Just did the math on how much I’ve paid in interest on my student loans over the last six years. I have two private loans that started at $26,000.

The interest rate is 11% on both, and I’ve been making minimum payments this whole time. After six years, I still owe $24,000… and the loan company has made $22,000 off me in interest.

Moral of the story? If you have to take out these loans, don’t just pay the minimum. Even an extra $50 a month makes a huge difference.

I just put $10,000 from a bonus toward my balance instead of saving it. At least now I’ll save about $1,000 in interest this year. Feels like the right move long term.

2

Taking out student loans in the US is a huge decision. Too bad most of us don’t really get the full picture before we sign up for them.

3

Leighton said:
Taking out student loans in the US is a huge decision. Too bad most of us don’t really get the full picture before we sign up for them.

Yeah, and a lot of people don’t even finish their degree. Or they graduate and don’t even work in the field they studied.

4

I wouldn’t call them predatory, but they definitely set people up for failure. The minimum payment is just a trap. It’s meant to keep you paying forever.

The best way to deal with loans like this is to pay more than the minimum, even when money is tight. Otherwise, you’re just throwing cash at interest and never making a dent in the actual loan.

5

@Gael
That’s exactly the problem. Most of us don’t really understand how it works until we’re already drowning in debt. That’s why these companies keep making money off people.

6

Riley said:
@Gael
That’s exactly the problem. Most of us don’t really understand how it works until we’re already drowning in debt. That’s why these companies keep making money off people.

I get that, but let’s be real… people research stuff they care about. If you can learn everything about your favorite hobby, you can spend a few hours learning about how loans work.

7

@Gael
Exactly. I took out loans, understood the terms, and paid them off. No complaints, no expecting someone else to pay them for me.

8

Honestly, the whole college system feels like a scam.

9

Curious… do you make a lot more money because of your degree? If so, do you think it was worth it?

10

This is kind of like people saying credit cards are predatory, but then only paying the minimum balance every month. You have to take some responsibility too.

11

Cruz said:
This is kind of like people saying credit cards are predatory, but then only paying the minimum balance every month. You have to take some responsibility too.

When you’re young, you don’t always know better. How many schools actually teach us anything about money? That’s why I wanted to share my story… maybe it helps someone avoid making the same mistake.

12

@Riley
Yeah, and by the time you figure it out, you’re already stuck in it. The system is designed to take advantage of young people who don’t have experience with money yet.

13

I knew so many people who lived off their student loan money… buying cars, going on trips, whatever. I sent back any extra I got, and I’m so glad I did.

14

I mean… you did read the loan terms before signing, right?

15

This is why it’s important to really understand what you’re signing up for before taking out loans.

16

People don’t think about the math when they take out these loans. If you borrow $20k at 11% and only make minimum payments, of course the balance barely moves. The best way to handle it is to watch how much of your payment actually goes toward the principal instead of just looking at the monthly amount.

17

@Zyler
The part that really bothers me is that student loans even have interest rates that high. How does it make sense to charge 11% to people just trying to get a degree?

18

Riley said:
@Zyler
The part that really bothers me is that student loans even have interest rates that high. How does it make sense to charge 11% to people just trying to get a degree?

Well, you took out private loans…

19

Riley said:
@Zyler
The part that really bothers me is that student loans even have interest rates that high. How does it make sense to charge 11% to people just trying to get a degree?

Yeah, it sucks, but once you have the loan, the best thing you can do is focus on paying as little interest as possible. Find every way to knock it down faster—think of it as beating the system.