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JerseySmarts.com

Here We Go Again… Student Loan Update – Down Another Grand

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Before I even begin this entry let me reiterate what I wrote last month about my student loan repayment plans – I don’t plan on increasing my focus on the USDOE student loan until the end of this coming summer. And even at that, I’m still not entirely convinced that I’m going to engage in the same type of extreme repayment like I did with the NJHESAA student loan. More on that in the coming months…

Down to $53 thousand

The purpose of this entry is to report that my student loan debt is down another thousand bucks as of Monday when I used the USDOE’s online payment system to send in some extra cash to pay down this loan’s balance. I’m a big fan of the USDOE’s online payment system primarily because it’s free, but also because it’s very simple and easy to use. In fact, when I wrote that great entry about repaying my NJHESAA student loan, I talked about why I liked the USDOE online payment system. Here is the blurb that I wrote at the time:

And the other part about the USDOE Direct Loans Program that I love is how their online payment system doesn’t charge any additional fees to make a payment! A borrower logs online, makes a payment, only pays the amount of the payment, and that’s it! No additional fees. Period. Much different from the online payment system over at NJHESAA. For almost a year I’ve been on the USDOE’s automatic debit plan where they take an ACH transfer from my checking account each month to make the monthly payment that is due. I’m going to stay on that plan and then make some additional payments here and there to bring down the total amount of principal outstanding on this loan.

In any event, there is no further update on my remaining student loan at this time. Clearly, the next big “goal” to reach in repaying this loan is to break $50 thousand left outstanding in principal. Ideally, I’ll be able to get down to that level soon, but – again – I’m not putting a date on when that will happen just yet. Soon enough, I’m sure. Soon enough…

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. After completely repaying over $61 thousand in student loans from the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank, I currently owe $53 thousand to the United States Department of Education’s Direct Loans program. Follow my student loan repayment story on JerseySmarts.com.

Additional Student Loan Repayment Information Now Available on JerseySmarts.com

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Hey folks. A little bit earlier tonight I uploaded some additional information on the repayment of my New Jersey Higher Education Student Assistance Authority (NJHESAA) student loan. In fact, if you head over to the “major announcement” page where you can find all difference pieces of information about the repayment of my NJCLASS loan, you can now scroll down to the bottom of the page and download a copy of the spreadsheet that I created to track my student loan repayments as well as a copy of my official “paid in full” letter and amortization/repayment schedule from the NJHESAA. The repayment schedule, by the way, shows the full breakout of the $14,645.33 that I paid in interest. Absolutely disgusting. Scroll down to the bottom of the “major announcement” entry (after the italicized portion) and you’ll find the update with the links to these documents.

I’m only sharing this information with the readers of this site and/or the folks who find us from Bing or Google because I want to show you that there is hope – even in the face of seemingly insurmountable student loan debt. However, success doesn’t just happen; you need a plan. The Excel spreadsheet that I uploaded on the other page was the primary tool I used to track and amend my plan.

I uploaded the “paid in full” letter just to show the world that there is an end of the rainbow that you can reach if you just plan it out. Set goals and meet them, folks. Make it your plan for 2011 to repay a significant portion of your student loan debt or consumer debt and then use whatever tools are at your disposal (maybe the spreadsheet that I uploaded) to keep a check on your plan and – more importantly – yourself. Enjoy!

Feeling Financially Content After the Big Push to Repay the Student Loan

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Things certainly have changed since I repaid my New Jersey Higher Education Student Assistance Authority (NJHESAA) NJCLASS loan earlier this month. For example, I’ve spent the last twelve months checking, rechecking, assessing, and reassessing my personal finance spreadsheets two or three times each day. However, since I repaid that NJCLASS loan I’ve probably checked my spreadsheets once or twice every other day. Sure, that’s still more than the vast majority of Americans and yes, I have a tighter control of my finances than other folks in my position – but it still feels weird.

It feels weird not having to decide whether or not I should drop my checking account down to $20, $30, or $50 so I can make that much bigger of a payment to NJHESAA. It feels weird checking my personal financial spreadsheets and seeing that I have a few thousand dollars sitting there instead of less than $100. It feels weird to think about reaching other financial goals that involve me paying myself first before paying some outside loan company (i.e. saving money instead of paying down high interest debt).

It all just feels weird.

None of these feels unknown, though, and that’s a strong distinction to make. You see, I’ve lived life as someone who didn’t worry about the money he was spending. When I was in college I had a troubling mixture of credit cards and semesterly student loan surplus payments that I used to wreak havoc on my personal financial situation. Hey – young people do stupid things, right?

But the big difference this time around is that while I am a little taken aback at the financial freedom that I’m now able to work within, I’m not overwhelmed by it. In other words, I’m not spending my money like a drunken sailor on shore leave. Instead, I’m eagerly awaiting this Saturday to get here so we’re officially in 2011 and I can start attacking my new financial goals. Some of you might ask, “Why not start hitting those financial goals now, Joe?” And I would respond by saying that there is a clear method to my madness.

Each year I set out some 15 or so financial goals. These goals include how much I want to donate to certain charities (and, specifically, to which funds within those charities), how much money I want to save, how much money I want to invest, how much of each of my debts I want to repay, etc. Well, I never actually hit all of those goals each year… until 2010. Not only did I hit all of my financial goals in the past year, but I shattered them good.

So I’ve opted to let the few dollars that have come in from my various paychecks over the last two weeks just sit in my checking account so that on January 1, 2011 I can start aggressively pursuing my 2011 financial goals. Hey, maybe I’ll post those goals on here for you folks to read – that might make an interesting entry!

Major Student Loan Announcement: My NJHESAA Loan is Fully Repaid!

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That’s right, folks, you read the headline of this entry correctly. After 52 months of repayment – beginning way back in July 2006 – my New Jersey Higher Education Student Assistance Authority (NJHESAA) student loan is now fully repaid. And now it’s time to celebrate! Well, before the celebration begins, let’s take a look at some of the facts and figures around this student loan. Starting with the screenshot of my account balance being listed at $0!

After graduating from Monmouth University in May 2003 and the Bloustein School of Planning and Public Policy at Rutgers University back in May 2006, I earned two powerful degrees: a Bachelor of the Arts Degree in English and a Master of the Arts Degree in Public Policy. However, I also obligated myself to an overwhelming financial anchor in the form of $120,720.46 worth of student loan debt. NJHESAA’s share of that anchor was $51,595.27. Believe it or not, I actually tracked how all of that student loan debt was assumed and here’s the breakout (the financial figures include both the amount of the loan and the capitalized interest; also, these are my figures and may be a few pennies or a dollar or two off from what the loan company keeps on file).

Freshman Year of College (1999 – 2000): $7,604.23
Sophomore Year of College (2000 – 2001): $9,233.47
Junior Year of College (2001 – 2002): $12,611.89
Summer Session (2002): $8,693.78
Senior Year of College (2002 – 2003): $12,941.06
Total NJHESAA Debt at Consolidation (Plus $510.84 Refinancing Fee): $51,595.27

Total Principal Paid During the Life of the Loan: $40,095.00
Total Interest Paid During the Life of the Loan (Includes Capitalized Interest): $24,251.61
Total Fees Paid During the Life of the Loan: $1,893.69

Total Amount Repaid: $66,240.30

I’m compelled to note that the total repayment amount is 165% of the original loan amount. I don’t know about your point of view, but the fact that hardworking students and graduates are put in a position to pay 65% over their original loan amount is revolting. What aggravates me the most is that I paid 165% of the original loan amount even though I engaged in an extremely aggressive repayment schedule.

Imagine the folks who can’t manage to engage in that type of aggressive repayment schedule. How much is their total repayment as a percentage of the original loan? I shudder to think of it…

Really – you should see this spreadsheet that I put together with all of my student loan debt broken out from each of my loan sources. I sit back and look at the spreadsheet these days and I can’t help but comment that the amount of debt I took out to attend both college and graduate school is absolutely remarkable. However (and let me say this again), I’m not some victim nor was I duped into signing these promissory notes. I fully understood that by taking on these student loans I would be fully responsible for repaying them. This is what I wanted and this rapid repayment is what I always planned to accomplish.

But what’s even more remarkable is that as of today, that $51,595.27 student loan (plus $14,645.33 in other interest and fees) sits at $0.00. It’s amazing. But where does that leave this whole repayment plan that I’ve been talking about for the better part of the last year? Well, actually… it’s over. I specifically created and designed the repayment plan to aggressively repay my NJHESAA student loan and as of today that goal has been achieved.

But there’s a new plan in place…

Only $54 thousand left!

This past summer I began envisioning this very day and thinking about what the next step in the overall repayment of my student loan debt might look like once this day arrived. So yes – I do have another repayment plan that will address my remaining student loan debt to the United States Department of Education (USDOE). However, my relationship with the USDOE has always been excellent. Their customer service folks are friendly and helpful and I’m not charged an interest rate that is borderline criminal. I think that I have a great borrower/lender relationship with the USDOE Direct Loans program and I’m looking forward to continuing to work within that relationship (which, by the way, carries into my professional life as I manage a large USDOE grant for my company).

And the other part about the USDOE Direct Loans Program that I love is how their online payment system doesn’t charge any additional fees to make a payment! A borrower logs online, makes a payment, only pays the amount of the payment, and that’s it! No additional fees. Period. Much different from the online payment system over at NJHESAA. For almost a year I’ve been on the USDOE’s automatic debit plan where they take an ACH transfer from my checking account each month to make the monthly payment that is due. I’m going to stay on that plan and then make some additional payments here and there to bring down the total amount of principal outstanding on this loan. By the way, if you were wondering how these additional principal pay downs impacted the repayment of the NJHESAA student loan, take a look at this breakout, which covers the entire time during which I engaged in this overpayment – starting from last December through today:

I’m not sure if I’ll wind up attacking the USDOE loan – which sits at about $54 thousand outstanding right now (down from a high of $59 thousand) – with the same vigor and hyper-focus that I put into repaying the NJHESAA loan. Over the summer, I drafted my financial goals for 2011 (yes, I draft my financial goals half a year in advance and then I revise them during the months leading into New Year’s Day) and among my financial goals for 2011 is to pay $10 thousand in excess of the minimum monthly payment due to the USDOE. And when you consider that I paid more than that to NJHESAA this week alone, it shouldn’t be too hard to accomplish that goal!

However, I don’t plan on increasing my focus on the USDOE student loan until the end of this coming summer. This doesn’t mean that my financial vigilance ends today, though. My mindset today remains the same as it has for years: less spending + reducing debt + more saving + more investments = stronger financial health. In fact, I look at today’s victory through the words of the late Senator Ted Kennedy at the Democratic National Convention in August 2008: “The work begins anew. The hope rises again. And the dream lives on.”

It feels weird to quote a Senator that I wasn’t crazy about from a political party that I’m ambivalent towards, but his words really fit the day.

For those of you who have been following my student loan repayment story on JerseySmarts.com, I thank you for your patronage. If you’re coming to this page or to JerseySmarts.com for the first time through a Bing or Google search, then I welcome you to the blog and I hope that you stick around to hear the story of how I repay the remaining $54 thousand that I have outstanding in student loans to the USDOE.

The work begins anew… right now!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. After completely repaying over $61 thousand in student loans from the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank, I currently owe $54 thousand to the United States Department of Education’s Direct Loans program. Follow my student loan repayment story on JerseySmarts.com.

__________

Update – December 26, 2010: Hey everyone! I’ve added some downloadable content to this page. Now you can download a version of the spreadsheet that I used to track my repayment of this NJHESAA student loan. Incidentally, I’m going to use this same spreadsheet to track the repayment of my USDOE loan, too. In addition, I’ve uploaded a PDF of my official paid-in-full letter from NJHESAA. Oh, and this letter includes the amortization/repayment schedule, too… including a breakout of the $14,645.33 that I paid in interest alone! Feel free to look through this stuff and let me know if you have any questions. Enjoy!

Update – July 30, 2012: Sometimes, I get the urge to revisit some of these older posts. After reviewing this one, I noticed that the student loan breakout was not as clearly attributed as it could have been. So, I revised some of the numbers up above to show the true cost of the loan during its lifetime. The numbers above all “foot” (i.e. equal) the same amount paid to the NJHESAA – $66,240.30. However, with the revisions above I’ve better described how much of that $66,240.30 was actually principal, how much was capitalized interest or regular interest, and how much was different fees. For those of you who are learning about student loans and financing – capitalized interest is interest that is added to the principal amount of a loan. The interest due on my NJHESAA loan was added to the principal balance at the end of each semester. Anyway, the numbers above are more reflective of what I actually paid to this private loan company.

As They Say, The Check is in the Mail…

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Have you ever written a check that actually hurt to write? No? Good for you. A few days ago I wrote the check that you’ll see below. Don’t do a double take when you see the check because I will pre-confirm what your eyes will see. Yes, that is a check written in the amount of $10,877.33.

Ahem… that’s ten thousand, eight hundred and seventy-seven dollars and thirty three friggin’ cents!!! Go ahead, take a look at the damn check for yourself:

A Hard Check to Write...

Pretty revolting, huh? Look, I’ve written until my fingers hurt about how much I hate sending this much money to the student loan companies. But this is a good moment and it signals a much better moment that is coming up in the next few days. In the next few days I’m going to log-on to the New Jersey Higher Education Student Assistance Authority’s website and check my online balance. And when I log-on I’m going to see that the very check you see above was received and processed. And then I’ll see that my NJCLASS loan, which initially started at some $51,595.27 in July 2006, is fully repaid.

And then I’ll breathe a sigh of relief and be able to relax for the first time since I started this crazy, extreme repayment plan some twelve months ago.