student loan MESS.?
so here’s the deal.. i was going to itt tech.. got a private student loan thru chase bank. well, itt turned out to be a total SCAM, to say the least.. i’m considering dropping out BEFORE i owe them eight billion dollars for a damn associates degree.. so here’s my question: obviously sallie mae (the devil) is going to know i dropped out.. yet, i am going to register for community college.. now am i going to have to start paying back the chase loan immediately? i don’t know how this works.. i have until november of 09 (when i was supposed to graduate from itt) until i even have to start to pay this back… which, by the way, a fifteen thousand dollar loan turned into me paying over fifty thousand with a minimum payment of two hundred and forty a month… i just don’t know if i can transfer the school on this loan. any feedback will be appreciated immensely.
Okay, first of all, you’ll be probably need to take a deep breath and calm down, before you can deal with this situation effectively.
I’m not quite sure where things went wrong with your Chase loan – I don’t know which specific loan program you applied for, so there is no way to know the terms of the loan you agreed to. I can tell you that private educational lending, like just about any other kind of private lending, is based on your credit worthiness. Applicants with outstanding credit qualify for the best interest rates, applicants with lesser credit qualify for higher interest rates, and applicants with poor credit are rejected altogether.
That being said, Chase is a major lender (and one of the largest banks in the world), so their lending programs are probably quite competitive with any other legitimate lending products that would be available to you. I’m not doubting that a loan from Chase might have a scary final payoff amount, but I am somewhat skeptical that the loan you got from Chase is all that different that anything else you would have been able to qualify for. It may be that you just didn’t anticipate how much it can cost to pay back a large loan that is being paid off over many years.
Now, here’s the bad news. Student loans with a deferment feature (meaning that you don’t have to begin paying them back until AFTER you finish your program) ALWAYS require continuous enrollment. If you leave the program before graduating, the deferment feature of your loan immediately expires, and you must begin making your scheduled payments immediately.
I’m not sure why you refer to Sallie Mae as “the devil”. For one thing, I don’t think Sallie Mae services Chase loans – I believe Chase services their own loans through a subsidiary company called CFS-Suntech Servicing.
If it is Sallie Mae, though, they are simply the servicing agency for Chase on your loan. Chase may have hired Sallie Mae to handle billing and receive your payments – that’s all. Sallie Mae provides this service for almost all of the major educational lending companies – they are far and away the largest educational loan servicing company in the United States.
Sallie Mae does what Chase hired them to do – accept payments on your loan according to the terms of the note that you signed. They can’t enforce any rules that you didn’t agree to when you signed the legal document that described the terms of the loan.
So – here’s the thing. First of all, borrowing $15,000 on a deferred loan at current market interest rates (especially if you’re not qualified as a “premium” borrower) is costly. I don’t know the interest rate you agreed to, but I could see that this loan might cost well over $30,000 to repay. Fifty thousand seems a little high, but I don’t know the terms of the loan.
Finally, the good news. Chase won’t mind if you want to transfer to another school (so long as it’s an accredited educational institution). All you have to do is notify them that you are changing schools. To keep things as simple as possible, you should make every effort to begin at the community college immediately – if your enrollment is not going to be continuous, you will need to notify Chase of that change in circumstance, as well.
Because you seem so confused and upset about the terms of the Chase loan, I would really highly recommend that you make an appointment with a knowledgeable financial advisor, an accountant, a family friend, or maybe even someone at your bank, who can explain all of the terms of your loan to you. The lesson here, of course, is that you should never sign a legal document that you don’t understand – especially when you’re committing yourself to paying back a very expensive loan.
Good luck to you – I hope this helped.
