Loan Ethics

I have an unsubsidized federal student loan. Ever since I graduated, I have been inundated with offers to consolidate my student loans under a usually better or fixed rate. But I have been strangely reluctant to take any of them up on it.

I feel like the feds were the only ones willing to take a risk on me pre-college. Now that I’ve graduated with a decent degree and proven that I’m not a complete slacker, all these loan agencies crawled out of the woodwork. Where were they when I was but a high school senior?

It strikes me as a little dishonest to say, “Thanks, feds for all that trust and money. Now you can have it all back while I go pay interest to someone else.” I realize that it’s my right to as part of the contract (and don’t get me wrong, it’s a right I reserve to use in case my variable rate becomes unreasonable).

But as long as my rate is within bounds, I feel like the feds deserve my patronage. I’d label such loyalty ethical, but it has been brought to my attention that it may just be silly.

4 thoughts on “Loan Ethics”

  1. It’s not like you’d be screwing them by paying back your loan early. They’d get cash upfront, which they can use to lend to other aspiring students. Money now is probably more valuable to them than money later, even if it is less overall.

  2. I’m not screwing them per se, but they clearly would rather I continue to pay them interest. I mean, if everyone either immediately gives back the loan or defaults, that’s no good.

    Apparently they have little better to do with their money than hand out loans and they gave one to me. So this loan to me is presumably exactly what they want to be doing with that money, not seeing it back in their hands.

  3. I don’t know exactly who you took out the loan from, but it seems to me like the federal government’s desire was to see you go through college and be educated, not make a profit off of you. The sooner they get that money back from you, the sooner they can help others do the same.

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