Thursday, December 8, 2011

AES you are crampin' my style!

Is it just me??? or is anyone else out there dealing with flip flopping interest rates and payments?

My student loans interest rates and minimum payments are changing all the time! Every month I get new mailings that say "the terms of your loan have changed... your payments have been recalculated."  I really believed this was supposed to happen quarterly, at most.  All of my private loans have variable interest, but only the (un)American Education Services loans wildly fluctuate.  Thankfully this time my interest rates only went up 0.01% but I still don't understand how my payments changed by $300???

On top of it all, the repayment terms change, the amount I owe changes, but the payments and interest on the billing statement never match the new repayment terms.  It just makes no sense and trying to speak to an actual human being is a nightmare.

So let's do some math.

$300 a month extra equals an annual interest rate increase of 3% not .01%.
$300/month *12mo/year = $3600/year

And if you remember from 7th grade math Percent * of = is.

Got that?

X% * $110,000 = $3600
X = 3600/110,000
X = 0.03272727272
X ~ 0.03

which also equals 3% of my total balance (or an increase of 30% from my current payments)

AES I think you got some 'splainin to do
Lucy via



  1. LOL on Lucy! My monthly payments decrease whenever I pay off a big this doesn't seem to make sense! Call them and fight!!!!

    Xo D

  2. I would call them up and demand an explanation!

  3. This was happening to me with my private loans from grad school. I have a similar total amount as you, with 50% being private loans. One month I'd get a bill saying I owe $350 that month, the second month I'd get a bill for $700!!! How are you supposed to budget with that kind of madness in your life?! My tax guy gave me a piece of advice (which I ended up implementing). He told me to ask a family member that owned property if I could take out a second mortgage to stabilize my loans. My mom agreed to this, and I "let" her have the interest to write it off on her taxes as a big "thank you!" We drafted papers around the deal to protect both of us, and now I send her an even $400 per month. Hope that helps!


  4. Hey Amanda, That is a great idea! I have kind of toyed with that idea in the past, but I didn't have a stable job and I assumed my parents would think I was out of my mind... However, things have been changing at home and I also went from contract to hired, so my work situation is as secure as it can be. I'm definitely going to propose this idea soon, even if it just covers the loans with the highest interest rates. Thanks for the great suggestion!!

    @D and Yomi, Ugh, I know I need to call. I just dread their customer service and hour-long wait times. Been reading Ramit's book, so I'm also just going to propose they reduce my rates or I move my loans elsewhere. I'm guess it will be fruitless, but at this point I would prefer any other company besides AES profit off my interest.