College grad, 26, crashes out online after finding out her student loans have a 17% interest rate — here’s why she says she ‘didn’t know any better’

“That is literally all I knew. I didn’t know any better to ask questions because how could I?” Jeacoma told People. “I was 17 with no knowledge about finances.”

By the end of her five-and-a-half years studying psychology, Jeacoma owed $85,000. It wasn’t until recently, now at age 26, that she discovered some of those loans carry staggering interest rates, as high as 17%. Others fall around 10%.

“I thought that was standard across the board for all of my loans. I didn’t even know they could have different rates on different loans.” The revelation left her in tears on TikTok.

Why interest rates matter

Jeacoma's situation underscores a fundamental truth about borrowing that anyone should know about beforehand: the longer it takes to repay a loan, the more interest accrues, often leaving people paying back far more than they initially borrowed.

Federal student loan interest rates are set by Congress and are generally lower than private loans. For the 2024-25 academic year, undergraduate federal loans carry fixed rates of 6.39%, while graduate loans are set at 7.94% and PLUS loans at 8.94%.

In contrast, private loan rates vary widely based on creditworthiness and lender terms. They range from over 3% to nearly 18%, on average. Borrowers without strong credit or a co-signer — like many 17-year-olds just starting college — often end up with rates at the high end of that spectrum.

Federal vs. private repayment

Repayment works differently depending on the type of loan. Federal loans offer standardized repayment plans, sometimes with flexibility and protections such as income-driven repayment options and deferment or forbearance in times of hardship.

Private loans, however, are dictated by individual lenders, with fewer safety nets and little flexibility if a borrower struggles to keep up with payments. This difference is why financial aid experts often advise maxing out federal aid before turning to private lenders.

Can consolidation help?

The government offers a Direct Consolidation Loan, which allows borrowers to combine multiple federal loans into one, with a fixed interest rate based on the weighted average of their loans. While this can simplify repayment, it rarely lowers the overall cost, and importantly, it only applies to federal loans.

But because Jeacoma’s loans were issued through Sallie Mae, a private lender, she cannot consolidate them under the federal program. Her main option is refinancing with another private lender. This would replace her existing high-interest loans with a new loan at a potentially lower rate, provided she qualifies based on her credit score and other terms.

Beyond refinancing, other tools are more tactical: making extra payments toward the highest-interest loans first, keeping balances on variable-rate loans low and looking into whether her lender offers any rate-reduction incentives for automatic payments. Working multiple jobs, as Jeacoma is doing, is one way to attack the principal aggressively. She’s now paying $1,500 a month in hopes that she can pay it off sooner rather than later.

Lessons for future borrowers

The bigger lesson is for future borrowers. Before signing any loan, students should know the exact interest rate, whether the loan is federal or private, their repayment options and exactly how much they need (and not borrow any more than that).

Borrowers should also keep in mind that the longer they take to pay, the more interest will accumulate — sometimes pushing the total owed well beyond the original amount borrowed. And above all, it's crucial to seek out financial education early. As Jeacoma points out, high schools rarely prepare students for the realities of debt.