Friday, July 07, 2006

Student Loans

Back in 2002, I decided to go to a vocational school to get a Culinary Arts degree after I was laid off for the second time from the high-tech industry. Because the culinary industry is HOT, and because teaching the culinary arts is now more a business then a desire to share knowledge, my loans are higher then my sister-in-law's vocational undergrad and graduate loans put together, and my program was only 18 months. I never really intended for it to be a career move because I already had a mortgage and quickly approaching goals to have a family, and quite frankly the food industry doesn't pay much, especially when SO many people are turning to it because of the food network, celeb chefs, magazines, books, etc. I just wanted to go because I never wanted to say I didn't but always wanted to. So I did, and I'll never tell a single soul to do what I did!

If there is anyone out there with a student loan with an adjustable interest rate, you know that on July 1st, the rates went up. As they do every July 1st, but this time they REALLY went up. I got a lovely letter from my loan provider for 2 of my 4 loans, with the new raised minimum payment amount. I had already praised myself on making payments larger then my minimum for years even while I was out of work (ok, I was never completely out of work because I continued to work in catering and at a resort until Sept of last year, but we had to dip into savings every month to make ends meet even with those 2 jobs), but now my minimum is even higher then that.

I did see the light at the end of the tunnel though. At the bottom of my letter there was a break down of the loans.
  • Loan Date
  • Original Loan Amount
  • Outstanding Principal
  • Interest Rate
With loan dates of 2002 and 2003, I am proud to say that it only took me 4 years to finally get the Outstanding Principal below the Original Loan Amount. That's right, I've been only freakin' paying for new and capitalized interest (capitalized interest = interest which was accrued while actively enrolled full-time in school and during the grace period which is then applied to the principal and any future accrued interest is then calculated with this new HUGE amount). I have a feeling that when we do get around to selling the beloved (GAG!) townhouse, all of the equity earned will be going to those good ol' student loans. Moving out of state is looking more and more a necessity.


J said...

Ugh. Student loans suck, and your loans sound like crappy ones. I'm sorry. :(

Autumn's Mom said...

I've been there. I had student loans from a small pointless college. And it took me 10 years to finally pay them off. I deferred a lot b/c I was so broke. Once I paid them off, they kept sending me solicitations because they had made so much money off of me! This brings me to my dilema. Do I really want to make a car payment???

Gina said...

Oh no! Can you switch them to fixed instead of adjustable? I'm forgetting if that's possible with student loans.

Cherry said...

Very very sadly. The consolidation programs I've talked to only consolidate student loans to a fixed interest loan with federal loans, which I have already done (those are the other 2 loans). Those loans are safely at 3%. The hellion loans are private student loans which thankfully, most of the interest is deductable.

I have considered taking a 2nd mortgage out + cash to cover the hellions, but then you start running into other tax issues, and I haven't figured out which is a better deduction.

But I can cook a hell of a good steak, with those really pretty criss crossy marks!

Tracy said...

Oh, Cherry! That stinks! I'm so sorry to hear about that--sounds like they're getting away with highway robbery!

I do think it REALLY cool that you know how to cook steaks with pretty criss-crossy marks. Mmm.