Yeah, a little different twist from the Summer ’10 radio anthem that many of us have come to know whether in the club, or choosing ringtones. However, long after Summer ’10 has gone the way of the discman, there will surely be at least one debt collecting entity we will still be talking about. This entity we speak of is Sallie Mae and she is a no nonsense type, with a have my money or else character. Sallie Mae is a name that college students, both current and former will remember.
Sallie Mae, the Student Loan Marketing Association, or SLMA, is a publicly-traded U.S. corporation whose operations are originating, servicing and collecting on student loans. The company remains the country’s largest originator of federally insured student loans. Even if you don’t deal with Sallie Mae directly, maybe you’ve met one of the associations’ smaller student loan fellows.
We assure you, that a student loan gone badly is nothing to laugh at. Sallie Mae and her student loan entourage, are quite notorious for their “forget you, pay me” antics, some of these are garnished wages, tax refund interceptions, and damaged credit…just to name a few.
No worries though, your Urban Professor family is here to drop a few nuggets for you to keep in mind when you’re borrowing, so you’re not blindsided like Eli Manning in an NFL pre-season game.
- The loan is YOURS: Unless your name is Carlton, Hillary or Ashley, and your dad is most widely known as “Uncle Phil,” the student loan is yours, not your parents’. The loan is debt and the debt must be repaid by you. On second thought, even Uncle Phil wouldn’t foot that bill. Either way, even though your parents may be helping you thru the student loan process and the infamous Financial Aid Department process, the name and ownership of the loan belongs to you.
- Prioritize which loans you borrow from: Yes, we understand the scenario: You got accepted into school and there’s no way money is going to become the hindrance. The “by any means necessary” approach has become a mantra for many success stories, so we will not begin to dispute that. However, when dealing with student loans, it’s critical to know which loans are the least dangerous and most dangerous, so you’re not just borrowing from whoever’s giving. A rule of thumb is to avoid “showing your privates,” which basically means consider private loans last. Some safer and more feasible options are Federal loans, subsidized loans, unsubsidized loans, and PLUS loans, which you may want to consider in that order. These have varying differences, which can be understood clearly after a little research.
- Borrow only what you need for education: Simply put, you borrow $25K you owe $25K, and then add interest. Borrowing for your education is a steep enough loan by itself. Compounding it with short term desires that may seem like needs are a sure way to set you back a bit. With that said, it is not in your future’s best interest to borrow for freshman year or any year’s academic expenses and then tack on the cost of a new wardrobe, or the latest gaming system, or a new car (trust us the debt will stay around much longer than “the whip”), or the new iPhone 4, or the Spring break trip to Brazil, or even the fraternity/sorority membership intake fees. Many times you can try to comfort yourself into borrowing more than what you need for education with thoughts like, “I’ll pay it all back when I get that ballin’ job after graduation,” or “you only live once;” to both of those we say, first, get the ballin’ job first. Last we checked those jobs weren’t plentiful for entry-level candidates…might not be ballin’ so soon after all. Next, you may only live once, but, it will probably be a long once, you surely don’t want Sallie Mae or any or her student loan folks coming after you any longer than necessary.
- Ask Why: Many times Colleges/Universities are helpful in their financial support for students, but they can also be too helpful. If a College/University has a “preferred lender”, you should always ask why is this lender “preferred.” Just like a “hook-up”, all that glitters isn’t gold. Believe us when we tell you, schools rock Jay-Z just like you, It’s not a business man, it’s a business…MAN!
Following these tips can help in the on-going and lengthy discussion on handling student loans. After all, getting a handle on how to start can surely help how you finish. So, with respect to Rick Ross and the Summer ’10 “B.M.F.” anthem: You can’t get the money from the start, if you’re in debt from the start. U DEFINE SUCCESS
Check out www.urbanprofessorblog.com for more tips on borrowing wisely and scholarship opportunities.