Stacking Pennies . . .

I think I mentioned I'm re-applying to graduate school. I have 9/30 credits completed (through distance education while working) at "University A", in the state I formerly lived in. I could continue on this path, taking 3 credits a semester (6 a year) and graduate in 3.5 years. University A is usually ranked in the 30s or 40s in my field.

My new job is more flexible about where you do your education. (Actually, they'll pay for almost anything, even non-job related. I think I'm taking sailing this spring!) I now have access to another (distance education) program at "University B" a top 10 engineering college. Even better, they are on the quarter system, require just nine courses, and I can take four each year. They also will accept two transfer credits, meaning if they accept my application, I'll be done in under two years! It'll also be a boost to my resume, as I went to a relatively no-name undergrad university. It also probably will be a lot more work and a very difficult two years... but it should pay off big time in the long run.

I was already really sold on this idea but I just came up with yet another great benefit. At "University B", each class is four credits, which by their system would classify me as a "half time" student. So what does that mean? Well, my student loans are Federal Subsidized Stafford loans, meaning while I'm enrolled in school at least half time, the government will pay the interest for me. I could also completely cease making payments if I wanted, freeing up $133 extra each month to invest/save. WOW! (I'll have to decide exactly what I plan to do when/if this whole thing is a reality)

In dollar terms, what does this mean? Well, last month the interest on my loan was roughly $75, so if I'm in this program for roughly two years, it'll save me about $1800. I can't wait until September to get this started! Let's hope that they accept me! I should find out within a few months!

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:

According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

I think I mentioned I'm re-applying to graduate school. I have 9/30 credits completed (through distance education while working) at "University A", in the state I formerly lived in. I could continue on this path, taking 3 credits a semester (6 a year) and graduate in 3.5 years. University A is usually ranked in the 30s or 40s in my field.

My new job is more flexible about where you do your education. (Actually, they'll pay for almost anything, even non-job related. I think I'm taking sailing this spring!) I now have access to another (distance education) program at "University B" a top 10 engineering college. Even better, they are on the quarter system, require just nine courses, and I can take four each year. They also will accept two transfer credits, meaning if they accept my application, I'll be done in under two years! It'll also be a boost to my resume, as I went to a relatively no-name undergrad university. It also probably will be a lot more work and a very difficult two years... but it should pay off big time in the long run.

I was already really sold on this idea but I just came up with yet another great benefit. At "University B", each class is four credits, which by their system would classify me as a "half time" student. So what does that mean? Well, my student loans are Federal Subsidized Stafford loans, meaning while I'm enrolled in school at least half time, the government will pay the interest for me. I could also completely cease making payments if I wanted, freeing up $133 extra each month to invest/save. WOW! (I'll have to decide exactly what I plan to do when/if this whole thing is a reality)

In dollar terms, what does this mean? Well, last month the interest on my loan was roughly $75, so if I'm in this program for roughly two years, it'll save me about $1800. I can't wait until September to get this started! Let's hope that they accept me! I should find out within a few months!

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:

According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

I think I mentioned I'm re-applying to graduate school. I have 9/30 credits completed (through distance education while working) at "University A", in the state I formerly lived in. I could continue on this path, taking 3 credits a semester (6 a year) and graduate in 3.5 years. University A is usually ranked in the 30s or 40s in my field.

My new job is more flexible about where you do your education. (Actually, they'll pay for almost anything, even non-job related. I think I'm taking sailing this spring!) I now have access to another (distance education) program at "University B" a top 10 engineering college. Even better, they are on the quarter system, require just nine courses, and I can take four each year. They also will accept two transfer credits, meaning if they accept my application, I'll be done in under two years! It'll also be a boost to my resume, as I went to a relatively no-name undergrad university. It also probably will be a lot more work and a very difficult two years... but it should pay off big time in the long run.

I was already really sold on this idea but I just came up with yet another great benefit. At "University B", each class is four credits, which by their system would classify me as a "half time" student. So what does that mean? Well, my student loans are Federal Subsidized Stafford loans, meaning while I'm enrolled in school at least half time, the government will pay the interest for me. I could also completely cease making payments if I wanted, freeing up $133 extra each month to invest/save. WOW! (I'll have to decide exactly what I plan to do when/if this whole thing is a reality)

In dollar terms, what does this mean? Well, last month the interest on my loan was roughly $75, so if I'm in this program for roughly two years, it'll save me about $1800. I can't wait until September to get this started! Let's hope that they accept me! I should find out within a few months!

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:

According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.

I think I mentioned I'm re-applying to graduate school. I have 9/30 credits completed (through distance education while working) at "University A", in the state I formerly lived in. I could continue on this path, taking 3 credits a semester (6 a year) and graduate in 3.5 years. University A is usually ranked in the 30s or 40s in my field.

My new job is more flexible about where you do your education. (Actually, they'll pay for almost anything, even non-job related. I think I'm taking sailing this spring!) I now have access to another (distance education) program at "University B" a top 10 engineering college. Even better, they are on the quarter system, require just nine courses, and I can take four each year. They also will accept two transfer credits, meaning if they accept my application, I'll be done in under two years! It'll also be a boost to my resume, as I went to a relatively no-name undergrad university. It also probably will be a lot more work and a very difficult two years... but it should pay off big time in the long run.

I was already really sold on this idea but I just came up with yet another great benefit. At "University B", each class is four credits, which by their system would classify me as a "half time" student. So what does that mean? Well, my student loans are Federal Subsidized Stafford loans, meaning while I'm enrolled in school at least half time, the government will pay the interest for me. I could also completely cease making payments if I wanted, freeing up $133 extra each month to invest/save. WOW! (I'll have to decide exactly what I plan to do when/if this whole thing is a reality)

In dollar terms, what does this mean? Well, last month the interest on my loan was roughly $75, so if I'm in this program for roughly two years, it'll save me about $1800. I can't wait until September to get this started! Let's hope that they accept me! I should find out within a few months!

When I first graduated college, I knew very little about personal finance. I'd done a few smart things along the way, but wasn't even well versed on what I now consider the basics of personal finance. I knew enough to participate in my company's 401k and to consolidate my student loans, but I didn't consider a Roth IRA until I'd been out of school for over six months. I had an excellent credit score, but my asset allocation was completely out of whack.

I've been a huge NPR fan for years, and as I suddenly had paychecks coming in, I started listening to "Marketplace Money" on a weekly basis. From there, I found a the personal finance blogosphere, and the rest is history.

The very first personal finance task I tackled was my student loan debt. I had roughly 21k in federal subsidized Stafford loans, with another 6k in private loans. Since I had all this money coming in, I immediately started paying as much as possible on my private student loans. The interest rate was probably around 8%--nothing too terrible, but not a dream either. It felt so good to send them checks for $500 or $1000 and watch the balances decrease.

After the private loans were gone, I had a desire to tackle the federal loans. Despite the low interest rate, the balance really bothered me. I think part of it was influenced by my boyfriends mindset that all debt was bad. It took me months to convince him he really should get a credit card in order to build a credit history. It took me weeks to get him to move his money from a standard savings account to something that actually would pay him some interest. And though I have explained this to him more than once, I think it will take quite some time before I'm able to get him to understand that rushing to pay of my low interest loans at the expense of other goals is really not the best move.

As I've become more educated in personal finance, the student loan balance bothers me a lot less. In fact, it has dropped to the absolute bottom of my list of priorities. I still pay a little extra each month: Instead of the $133 due, I pay $175. This will shorten the life of the loan by about 8 years. I still plan to pay them off even more quickly than that, but I don't plan on accelerating them any more until bigger priorities are met: maxing out a 401k and a Roth, for example.

The reality is, most of my other personal finance goals would be out of reach if I had not borrowed that money to get an education. Each month when that money comes out of my account, I still think it was money well spent.

I'm not a strict budgeter. I set monthly goals in excel based on fairly narrow categories, and I track my spending for each category. If I buy a magazine at the grocery store, I sometimes it slip into the grocery budget, even if it should be in entertainment. If I go over my budget, I don't really worry about it. If I save $100 less one month, it's not a big deal. As long as my net worth continually grows and I'm conscious of my spending, I'm not strict at all. I'm great at making a budget, but after that, I ignore it!

This week I decided I wanted new running shoes. Usually, I'd just buy them and worry about it later. This time I actually went into excel, and tried to see where the money was going to come from. If it was going to detract from my savings, fine, but I just wanted to know. I was able to take a little bit out of my utilities (low energy bill in the fall), a little out of "personal", and was able to come up with an extra $75 for running shoes. There is a chance the shoes will be a little more, but the vast majority won't affect my savings.

While I was there, I set up a rough December budget. Due to the year end bonus, I should be able to put $1000 towards my student loan, $2000 in my e-fund, and leave plenty of wiggle room in my new years vacation budget. I love bonus month!

I consolidated my student loans last June, and the process was pretty painful. It really shouldn't have been, but there were some minor issues that turned into huge problems due to Wells Fargo constantly giving me wrong information about what forms I had to fill out to fix them.

Anyway, a few days ago I noticed that my loan had been taken off 'in-school deferment" status and put into repayment, and a retroactive "hardship forbearance" had been processed without my knowledge. As part of this, $366 of interest was capitalized into the loan. I was upset because interest is tax deductible (if it is paid as interest, not if it is rolled into the principle!) so I contacted Wells Fargo to complain.

Their response, basically, was that it is too late and they can't help me. They also explained that this was an unusual siltation, and in most cases, I would have been given the opportunity to pay the interest. So, that will cost me about $100 in a tax deduction, but I was surprised at the level of helpfulness and competence they showed in dealing with my situation.

Here are snippets from the most helpful correspondence I've had with their loan department to date:

According to our records, we originally disbursed your Federal Consolidation Loan (CA0001) on 01/05/2007 and since you were enrolled in school half-time, we processed a half-time study school deferment on loan CA0001.

After loan CA0001 was disbursed we received your request to add another loan to your Federal Consolidation Loan. We processed this request and disbursed your new Federal Consolidation Loan CA0101 on 06/07/2007. Loan CA0101 canceled out loan CA0001.

[My note: this loan was listed on the original application, and I have no idea how they forgot it. It also took them a million years and several phone calls to take care of this issue]

In October we received updated enrollment information from your school showing you dropped to less than half-time status as of 05/05/2007. Usually we would update the deferment end date and process an administrative forbearance on the account to keep it current. However, since you dropped to less than half-time status before loan CA0101 was disbursed on 06/07/2007, we had to remove the deferment from loan CA0101 and process a standard forbearance on your loan.

We regret that because we just received your updated enrollment information and made the adjustments to your account, there wasn't sufficient time for us to notify you of the outstanding interest so that you could pay it before it was capitalized onto the principal balance of your loan. However, by processing the standard forbearance on your loan, we kept the loan from being reported as delinquent to the credit bureaus and from being assessed late fees. [My note: Gee thanks how kind.... especially since I was not getting billed and my account online clearly said "deferment" with nothing due!]

Well, it sounds a bit confusing, and I'm not sure that I buy the "there wasn't sufficient time" line, but I do understand their motivation. They also reminded me that after THREE YEARS of on time payments, I would qualify for another 1% rate reduction. I'm certainly annoyed that I will not be getting any tax breaks on the interest I pay this year, but if I was more in tune with the rules, I could have notified them of my school status myself.

While checking my online banking, I noticed my student loan is suddenly back in repayment status I took 6 credits of graduate classes last semester and was granted a student loan deferment. I thought this was great news, because my loan is subsidized and I am not charged interest during a deferment.

It seems like my class this semester doesn't qualify me for the same treatment, perhaps because I'm only doing 3 credits. Wells Fargo has taken it upon themselves to mark 6/07 until 10/19 as a period of hardship forbearance! More like a period of "Wells Fargo screwed up... again!" I'm going into the branch tomorrow to inquire about this. If it doesn't affect my credit report, then I suppose I'll let it slide. I have to go to the branch anyway because I can not, for the life of me, figure out how to set up auto-payments online in the appropriate way to get the rate discount offered. I can set up payments online, but it seems it isn't the same thing as when I mail the forum in. They make it confusing!

More annoying, they not only charged me interest for the "forbearance" period (this is to be expected), but they capitalized it into the loan, raising the principle by $366. I'm going to fight that, even if I have to simply pay the interest outright. If I do that, I can deduct it from my taxes! In the loan documents, it says they can capitalize the interest into the loan if I choose not to pay the interest, but I do NOT choose that, they gave me no option! This all just seems wrong. They haven't provided me any notification or got any consent from me.

What makes me most annoyed is that until I pay off my student loan, I'm stuck with Wells Fargo. If it were something more simple, I'd just take my money elsewhere.

I've made some financial mistakes in my past, but the single past decision that worries me the most is agreeing to cosign for my younger sisters student loans.

Why did I, a 21 year old sibling, have to cosign her student loans? There were several reasons. She needed a cosigner because she had once got a Victoria's Secret credit card, bought a few things, and didn't make payments. She was not eligible for federal loans (which never need a cosigner) due to poor grades the previous year. She had no money saved up because she didn't have a job (even in the summer!), though she did do a little work for my dad to earn some money to live on. Also, my parents were not eligible to cosign due to their own issues.

After listing those reasons, it seems incredibly obvious that I shouldn't have agreed to do this. At the time, I didn't understand the ramifications of my signature, and my parents assured me that if she ever neglected to make payments, they would take care of it. So I agreed, because if I hadn't, she wouldn't be able to go to college spring semester. My parents asked me to do this, and I trusted they wouldn't lead me wrong. I don't think they intended to, but I also don't think it was a wise move.

Since I was in a different city, I gave her permission just to sign my name for me to save the hassle of mailing back and forth. (I realize this is not appropriate, but it is what I did at the time.) She got the loan, took the classes, and did a little bit better in school. She still didn't get a job, but instead took summer classes, financed by a second student loan. I also cosigned that loan again letting her to sign my name. When fall came around and i was asked again, I was so busy with my college career that I said "sure, whatever", not even knowing the amount of the loans.

This January, I got a letter in the mail stating that a loan that I had cosigned for $6000 was approved. Not only did I not sign the loan papers (which admittedly was standard practice), but I wasn't even asked if this was okay with me! I pulled my credit report, tallied up the balance of her loans, and came up with over $23000. To put this in perspective, when I graduated, I had $27000 for myself. I had several scholarships, well paying internships, and worked through school, so it is understandable that she would have more.

Still, it set of huge alarm bells in my head. After complaining to my dad (who had told my sister she was required to call and ask me about this), I bit the bullet and called my sister directly. I said that I was no longer comfortable cosigning her loans, as she had me on the hook for almost as much as I had for myself. I said she was old enough that she should have her own credit established, and if she wasn't eligible for federal aid, she really needed to improve her grades. I told her I would allow this last loan to go through, but after that she was on her own, or she had to ask someone else. She didn't argue.

She is still in school. I have no idea how she is financing it. I don't need to know, because I'm no longer involved. That provides some relief. I wish I could get through to her the importance of being careful with the amount of money you borrow, even if it is for a good reason. I worry about it for her sake, and also for mine.

I do not doubt that my parents intend to take care of any issues, as promised. However, legally I'm responsible for it. Also, I am unfortunately aware from from past experience that it is a pain in the butt having to call my parents every month to collect a payment. It puts an unnecessary strain on the relationship.

I say that I regret this, but even knowing what I know now, I'm not convinced I would have said no for the first semester. Beyond that, I would have been more firm. But it is family, and it is money for education, and it is hard for me to turn my back on that.

I wish that I was a few years older and wiser when asked to do this. There is no way I can spare $6000 a semester to support her (and no reason that I should). However, I could offer a more reasonable (say, $1000) amount as a gift towards her education, with no expectations of payback. Perhaps on the condition she worked part time, and full time in the summers! It is more my parents place to do this than mine, but I feel very blessed to have a good job and could spare the money to further her education. She is family, and I only want the best for her.

I've been cluttering up someone else's comments area on a post about Federal Aid for college students. Honestly, I've never heard anyone take the position that federal aid is a large factor in why college is so expensive. Then again, it isn't something I've discussed with many people, so it is may be a more common idea than I thought.

Rather than continuing to disagree with the overall point, I want to approach it from an entirely personal angle. One examples doesn't prove a darn thing, but I'm not out to prove anything, just to think and discuss.

I graduated high school without a penny saved for my college education. Yes, I could have saved something myself (I worked part time through high school), but I didn't. No one suggested it to me, and I didn't think of it myself. My friends were quite well off and their parents were planning on paying for college for them, so it wasn't "normal" to be saving for college.

Even though there wasn't any money set aside, the question of whether or not I would go to college wasn't raised. It was obvious that I would--I was a bright student who loved school and excelled in math. I couldn't imagine doing anything else. I went to the state school because it was relatively inexpensive. Even today, after yearly tuition increases (one year it was a 20% increase!) it is "only" $5000 for tuition, another $1000 for fees, and $6000 for room and board.

The exact dollar figure in grants that I got is unknown, because I'm not a good record keeper. I estimate that it would be about $10,000. I got about $22,000 in subsidized government loans, which means the government paid my interest throughout school. I'm sure there is fancy math to figure out that cost to them, but I'm just going to round it to a cost of $1000/yr for four years. I'll also throw in the $5000 merit based scholarship I got to study abroad, because it was a government program and one qualifying factor was finiancial need. That puts the governments total investment in me at a whopping $19,000, a humbling number.

But, what will they get back on it? It is hard to quantify, because if I didn't go to college, I have no idea what I would have done. I would have stayed in my home state, and with hard work I might have been able to earn, say, 35k a year. This would make my tax bill (at 25%) be 8.7k a year, for 47 (65-18) years. I'm simplifying the math, but I'll do both calculations the same, so it should be a wash. Total lifetime taxes: $408,900

My first year out of school, I'm earning $56k. My oportunity for salary growth is much greater than if I had no degree. For simplicity, let's just say I make $67k (my salary offer for my new job) for my entire life. This is ridiculously unlikely, but so be it. My tax bill for this salary (at straight 25%) is $16.75k, for 42 years 65-23) that ammounts to an impressive $703,500.

The difference? $294,6000. It would take some more accounting to flat out demostrate that they made a good investment in me and I don't know finance. Yet it seems apparent to me that over my life I'll pay substansially more in taxes than that 19k investment in my education. Strictly based on taxes, I was a good investment. This isn't to mention the decrease in US students graduating in science and engineering, the need for us to stay up to date in technology, and the value I provide to my company and our economy.

The playing feild between the haves and the have nots will never be level, but government aid helps those of us who's parents don't have a pile of money saved up at least get ON the field and try to better our lives. When I have kids, they probably won't qualify for any sort of aid, but I'll be able to provide for them with money I'm able to save due to my education. Government aid can help one generation so that the next can do it without that help. It is sort of like the saying, "Light a man a fire, he'll be warm for the night. Light a man ON fire, and he'll be warm for the rest of his life." Or wait, maybe the saying was about fish.... :)

It is difficult for me to look at government aid as anything but good because my experience with it was good. It not only helped me, but it didn't go to waste on some student who frittered away they governments money while skipping class and getting wasted. I understand there is another side of it, but it is a side that I just will never be on.