Amy
Wheaton,#2Author of original report
Sat, March 17, 2007
I was only trying to let people know of my experience. At this time I have all my student loans corrected with Sallie Mae. I have learned to read all the fine print and ask many questions and recieve what I ask for in writing. When you are going to college, if it is for the first time or the second time, bring someone else with you when you are signing financial papers. Do research on the school you want to go to, but also the financial end of it as well.It was not necessarily negligiance, it was more the fact, I did not know all the questions I needed to ask. But, like anything I have learned a hard lesson.
Jake
Indianapolis,#3Consumer Comment
Sat, March 17, 2007
Amy, your story is like many others I have heard. The suggestions you gave, although I am sure were given with good intentions, are basically worthless. "Tied to prime rate" is a vague term that basically means there is a relationship between some regularly published "prime" interest rate (LIBOR is a common index used) and the loan's interest rate. No reasonable person that knew anything about finance or the English Language would ever interpret "tied to prime rate" with being "equal to prime rate" in fact, most savvy borrowers would be asking "prime rate plus what?" the moment they saw that on the p-note. Having said that, it should also be noted that most college students know nothing about finance. Taking a "witness" (like their parent) along will not solve the problem. Signing the p-note without reading every single word is basically, IMO, negligence. P-notes usually have verbiage about "By signing below I certify I have read this entire Note. I further certify that I know I MUST read this entire Note before signing, even if advised verbally that I don't have to read. I FURTHER CERTIFY THAT I UNDERSTAND THIS IS A LOAN I MUST REPAY, AND THAT BY SIGNING BELOW I CERTIFY UNDER PENALTY OF PERJURY THAT I HAVE READ THE ENTIRE NOTE EVEN IF ADVISED NOT TO, AND THAT I AGREE TO REPAY THE ENTIRE LOAN AMOUNT, INCLUDING ANY AND ALL INTEREST, LATE FEES, COLLECTION COSTS, AND REASONABLE ATTORNEY FEES IN ACCORDANCE TO THE TERMS OF THIS NOTE." Your admission that you signed something like that and did not read is an admission of gross negligence in the very least. Here is my suggestion: AVOID PRIVATE LOANS, NO MATTER WHAT SCHOOL YOU ATTEND. EDUCATE YOURSELF ABOUT FINANCIAL AID, INCLUDING LOANS, BEFORE YOU EVEN APPLY. IF SOMEONE FROM FINANCIAL AID SAYS "YOU DON'T HAVE TO MAKE PAYMENTS UNTIL 6 MONTHS AFTER YOU GRADUATE" SAY "WHAT IF I NEVER GRADUATE?" DO NOT ASSUME ANYTHING YOU HAVE LEARNED ABOUT NORMAL CONSUMER DEBT WILL APPLY TO YOUR STUDENT LOANS. UNDERSTAND THAT YOU HAVE TO MAKE PAYMENT WHETHER YOU GET A STATEMENT OR NOT. REALIZE THAT IF YOU MUST REPAY THE LOAN WHETHER YOU ARE SATISFIED WITH THE SCHOOL OR NOT. UNDERSTAND THAT STUDENT LOANS YOU DO NOT PAY CAN BE OFFSET FROM YOUR TAX REFUNDS, GARNISHED FROM YOUR WAGES WITHOUT A JUDGMENT IN COURT, AND NOT DISCHARGED IN BANKRUPTCY.