Snowballing Loans, Taco Bell, and My Escape to Brazil

This post is by the Honest College intern Evan Katz

I’ve never been wild about taking out student loans, mainly because the idea of being tied to multiple thousands of interest-gaining dollars makes me a bit queasy.

I mean, if I were given the option between eating a big ice cream cone and taking out multiple student loans, I’d probably have to go with the ice cream. Maybe that’s a poor example. Regardless, upon entering college I had no choice but to borrow an amount of money to equivalent a lifetime supply of Taco Bell. A significant sum, considering my weakness for Baja Blasts.

Image source: flickr

To add to the confusion, I had taken out both a subsidized and unsubsidized loan. The subsidized one was a fixed amount until I graduated, but the unsubsidized loan started snowballing right from the beginning. Luckily, this loan was significantly smaller than the subsidized one. Regardless, I was advised to pay it off as quickly as possible because at the end of four years, by a conservative estimate, I would owe approximately eighty kabillion dollars.

Fortunately, by the end of the summer I was able to pinch together enough cash from my job as a professional assassin (it’s boring, but it’s part of my life) to make a lump-sum payment that would cover the initial loan and the $33 of interest that had already accrued. Accrued. I’ve always wanted to use that word.

Realizing my caps lock was on after six failed password attempts, I finally managed to log on to the Sallie Mae loan website. (You’d think if such a large and foreboding financial institution was really dead-set on naming their company after a girl, they’d have picked a name that sounds a bit less like the host of a pajama party.) Already a bit miffed at the large “PAY NOW” button (would a “Pay When You Get a Sec There, Champ?” button be so hard?), I hastily added my $33-and-change of interest to the initial loan and hit submit. A few debit card verifications later and I was on my way.

image source: edureview

A day later, I opened my inbox to find what I originally thought was an invite to a tea party, judging by the sender’s name. Disappointingly, it was just be Sallie Mae thanking me for my payment and kindly alerting me that I still owed $0.18 on my loan. Hmm. Had I incorrectly added up the numbers in my head? Had 18 cents of interest grown while I spent fifteen minutes adding up the numbers in my head? Note to self: purchase a calculator.
No matter – what’s 18 cents between people that want your money friends? I made a caps-lock-free log on to Ms. Mae’s site and typed “0.18” into the payment field. Submit. An error message popped up, reading: “You must submit payments of at least $1.00.” Really Sallie? And I thought the taxi meter I keep in my car for when friends borrow it was stingy.

I grudgingly submitted a $1.00 payment. Another error message: “You may not submit payments that exceed loan amount.” Uh oh. With a similar feeling to the one you get just after locking your keys in your running Honda Ferrari, I realized that I had inadvertently trapped myself in a numerical paradox. Trying not to panic, I reasoned that I could just wait until enough interest accrued on the loan to bring the total to a dollar.

I quickly borrowed my roommate’s calculator, along with a large handful of his Oreos, and made a few calculations. At 6.7% yearly interest, my 18 cent loan would reach a dollar in just about… 27 years. Great. As effective as my patented sticky-note-on-the-cereal-box reminder method is, it’s unlikely I’ll still be on the same batch of Cheerios by the time I’m 46. Reminder-less, I’ll be oblivious to this loan expanding like some grotesque closet monster. I can just picture the conversation as I’m on my deathbed at 98, happily prepared to give my fortune to numerous grandchildren.

“Mr. Katz?” says a man in a sharp suit and sunglasses.
“Who are you?” I feebly croak.
He replies, “Sallie Mae. I’m here to inform you that –”
“Sallie? Isn’t that a girl’s name? Is this about my first wife again? Tell her she’s a cheating –”
“No, I’m from – never mind. You owe the government eighty kabillion dollars.”

Clearly, short of taking refuge in Brazil, my options are limited. “You might just give Sallie Mae a call,” my mom suggested. “There’s no need to be nervous.” Right. Like I want to make myself seem like some desperate stalker-type who resorts to looking up women’s phone numbers online. I think I’m going to play hard-to-get on this one. Well. Maybe I’ll just text her.

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