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Now That December 21, 2012 Has Come And Gone… The End Really Is Near!

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Since we’re all here and you’re reading this it would appear that the Mayans were way off on their prediction for the end of the world. And if you thought that since the Mayans screwed up their end of the world prediction that all “end of” predictions were way off course, don’t worry! I’m glad to report that my student loan repayment projections are still very much on track and heading strongly in the right direction. If you can indulge me for a few paragraphs, I’d like to review some of the current year’s financial figures regarding my remaining student loan debt and how this leads to the end of my loans in 2013.

The end is near!

The one statistic that I always find the most interesting is the amount of interest that I’m paying on my student loans per day. As of January 1, 2012, I was incurring $4.30 per day in interest expenses. Think about that for just a moment: just about one year ago I was losing $4.30 each day to interest costs that were accruing on my student loan. In a year, that interest expense alone would have cost me $1,569.50.

That’s fifteen hundred dollars of lost money. Sickening.

As of today, I’m losing $2.33 per day in interest expenses. Doesn’t sound like much, right? Think again! In a given year, accruing interest at $2.33 per day could cost me $850.45 per year. Remember, interest expenses are completely lost money – funds that don’t reduce the total amount of principal for the loan (and thus reduce the total amount of the interest paid on the loan). It’s just money that you give to whoever lent you the money to no benefit of your own.

Another financial statistic from 2012: this year, I reduced the total principal of my student loan by approximately $16 thousand. Not bad, huh? With about $18 thousand left in student loan debt, I’m looking forward to late spring/early summer when I project that this loan is totally repaid, done, and over with for good.

Stay tuned, folks. The year 2013 will be the last year where I’m repaying my student loans!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $103 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $18 thousand in principal to the United States Department of Education’s federal Direct Loans program. This loan is serviced by the Missouri Higher Education Loan Authority. To date, I’ve repaid over $35 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Another Student Loan Milestone – I’ve Repaid $100,000 In Loan Principal

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Unlike my last student loan entry, I didn’t want to wait months before providing an update and marking off a major milestone in my student loan repayment history. In fact, I only waited a few days to make this major announcement! Yesterday, I sent off another payment to MOHELA and the payment was enough for my total outstanding balance to drop down to approximately $21 thousand. If you’ve been following along my repayment story, then you know that this outstanding balance marks a major milestone in my repayment efforts:

As of today, I’ve repaid $100 thousand in student loan principal.

$100,000 down... $21,000 left to go

One hundred thousand dollars – and that’s just in principal! When you add in the interest that I’ve paid over the last 6+ years of repaying these loans, then the total amount that I’ve given to these student loan companies is somewhere around $135 thousand. Let me rewrite that for added dramatic effect:

I’ve paid out over one hundred and thirty-five thousand dollars to student loan companies since graduating from graduate school in 2006.

In many respects, this is utterly disgusting. Just the other day I posted a video of a no-good scumbag scam artist who received $70,000 of free money from the government to go to college. And make no mistake about it (let’s be real here, folks) – this guy received that free money because of his ethnicity and socioeconomic status, period. As a somewhat still young, middle-class, highly educated, intelligent, hard-working, white guy of European descent – I’m screwed in this country. There’s no way I could ever qualify for the race and ethnicity-based free money that the scumbag in that video was able to procure. But, I’ve moved beyond the innate anger that I have about our racist, sexist, class-based system that drives down otherwise good, determined students just because they have light skin and are males.

In another respect, this milestone is a reminder of all the great things that I don’t have right now in my life… and the aggravating comments that I constantly get from friends and coworkers – among others – about how I should do this and do that with my free time (they simply don’t understand).

However, the way I choose to accept reaching this milestone is to redouble my efforts to eliminate the remainder of this debt so I can get on with trying to craft as close to a normal – albeit delayed – life as possible. I’ve had enough of making these damn payments, which are now averaging somewhere around $2,250 per month (it used to be higher, but I had to buy a new car). Imagine your monthly take-home pay. Got that number in your head? Good. Now imagine deducting $2,250 right off the top of it (before any other expense). How much does that suck?

Trust me – I know.

So… hooray (in that crazy Mel Gibson voice) for me for reaching this milestone. The end of the road is drawing near for these loans and I’m going to pick it up so I can get there sooner rather than later. When Christmas 2013 comes around, I don’t want to have to worry about how much of my income needs to be sliced off the top so I can send it off to pay student loans. Enough is enough with this already.

Onward and upward!

Or should that be onward and downward because I’m paying down the loan? Whatever, you get the point that I’m trying to make here.

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $100 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $21 thousand in principal to the United States Department of Education’s federal Direct Loans program. This loan is serviced by the Missouri Higher Education Loan Authority. To date, I’ve repaid over $35 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Yet Another Big Drop in My Total Student Loan Debt – Another $3 Thousand Down

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You’ve all been waiting for the latest update on my outstanding student loan debt. Can you believe that the last update was way back almost three months ago when my total debt dropped from $26 thousand down to $25 thousand? Well, after three months of waiting the latest update is that my student loan debt has dropped again – this time all the way down to $22 thousand! In fact, I’m getting really close to a major milestone when my debt hits about $21 thousand – which will be a full $100 thousand repaid to my student loans.

Just $22 thousand left to go...

There’s no secret about how all of these student loan repayments are possible. In fact, the “secret” seems to be something that the unemployed masses don’t seem to want to accept in today’s economy – that if you want to make money and retire your debt, then you need to get your butt working right now. Don’t wait, don’t deliberate, don’t overthink this whole process. Instead, go out and get a job – any job – so you can start bringing in income. NOW!

If you want to call it a secret, then that’s the big “secret” to paying off debt. Productivity today equals a paycheck tomorrow and a paycheck tomorrow equals a loan payment the following day and a loan payment the following day equals getting out of debt. Period.

No big surprise here, folks. For me, the concept of getting up off my butt and doing something has taken the form of working at a popular online university as an instructor. The secondary income that I earn from this job is a nice boost to my overall monthly cash flow and it has helped to fund a great deal of my student loan payments over the last two years. And I know some idiot is probably out there reading this right now thinking, “Well, you have an advantage because you have that second job and I can’t find any job in the first place!” Bullshit! I work a 40+ hour work week with no less than a minimum of 10 hours commuting each week – and that’s just at my day job. So I don’t want to hear any crap about having any advantages because I found a good second job. If anything, my life is more strenuous than the person who is, let’s be honest, optionally-unemployed because I have several different workplace management structures that I have to perform within.

Since we’re telling secrets, I think the unemployed masses should know that one of the secrets to finding a job is getting over yourself. Sure, you shouldn’t take a job that pays below minimum wage if you’ve earned yourself a doctorate, but at the same time you shouldn’t reject an entry-level job with a modest salary either because you have a bachelor’s degree and you think that makes you worth more on the market. Newsflash: it doesn’t make you worth any more on the market in this economy! All your degree gives you is access to applying for jobs that high school graduates are not able to apply for – that’s it. And that’s not a big advantage in this economy so get over yourselves and take that entry-level job. Didn’t your professors ever teach you to “get in” at a company and then begin to find ways to climb the internal corporate ladder? It can be done, folks. You just have to get up off your butts and do it!

Stick around for more student loan news coming up in the next few weeks. Several milestones are sitting on the horizon including the aforementioned payment where I hit a remaining balance of $21 thousand. Again, this will signify an incredible $100,000 in student loan principal repayment. The next milestone after that is just a thousand bucks away when I hit $20 thousand left outstanding and then smash through that number to get into the teens.

It’s pretty amazing to think that this aggressive repayment plan really took its infancy just under three years ago in December 2009. Time flies, huh?

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $99 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $22 thousand in principal to the United States Department of Education’s federal Direct Loans program. This loan is serviced by the Missouri Higher Education Loan Authority. To date, I’ve repaid over $35 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Where, Exactly, Did All of That Student Loan Money Go?

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You would probably be amazed how many times there are thoughts that I have in my head that I know I want to translate into entries on this blog, but never have the time (or memory) to get down on paper (or the electronic equivalent). That’s probably why I usually have so many half-finished entries in the “Drafts” folder of this blog – because I’ll start writing an entry and then not finish it in a timely manner since the thought that would finish the entry comes too late or when I’m not near a computer. For example, a few months ago I wrote about what I would have done with all of the money that I spent on student loans if I didn’t have to send it off to the loan companies and the government. Well, in the week since I wrote that entry I realized that I forgot to add a small addendum at the end of the post talking about where all of that money went.

And thus we have this entry. 🙂

Like the title of this entry says – where, exactly, did all of that student loan money go? There are a few ways to answer this question so I’m going to compartmentalize the response as best as I can. To answer this question one first has to understand that the money that I paid in student loans has been sent to four primary lenders: Monmouth University (MU), CitiBank, the New Jersey Higher Education Student Assistance Authority (NJHESAA), and the United States Department of Education (USED). With respect to the USED, the Department recently sold my loan to the Missouri Higher Education Loan Authority (MOHELA), so when I write about them I’ll reference MOHELA.

Monmouth University – Perkins Loan
This is the easiest one for me to discuss. Many years ago when I was an undergraduate attending MU I received a Perkins loan from the university. Perkins loans are provided by the government and can be offered from the university to help finance the cost of education. The university advanced a $1,400 Perkins loan which I repaid very soon after graduating in May 2003 (I can’t remember the date, but it was within the first 12 months of graduating; possibly within the first 3 – 6 months).

Where did that student loan money go? Well, the Perkins loan program is arranged to be a revolving loan fund at each university, so the money I repaid to MU was ultimately used to provide loans to other eligible students. And that’s not such a bad outcome for repaying this small student loan.

CitiBank – CitiAssist Graduate Loan
This was a private student loan that I took out from CitiBank while I was attending the Bloustein School of Planning and Public Policy at Rutgers University. In truth, I didn’t use all of these funds for tuition expenses. As I recall, I used the majority of these funds to pay for one semester of graduate classes at Rutgers and then used the balance to pay some living expenses as well as to purchase some textbooks.

Where did this student loan money go after I repaid it? This one is simple – the loan was a private loan fully-backed by the federal government so a full one hundred percent of the funds were returned to CitiBank. That includes the full $7,000 that I paid in principal as well as the $1,071.52 that I paid in interest. All of that interest money is profit to CitiBank that probably went towards paying someone’s salary or other forms of compensation (i.e. bonuses). Congratulations, CitiBank – you achieved a 15.3% return on your investment in me!

New Jersey Higher Education Student Assistance Authority (NJHESAA) – NJCLASS Loans
Is there anyone else out there on the internet who has blogged more about the NJHESAA organization than I have on this blog? I know that there are thousands of similar-minded current and former borrowers out there who are frustrated with the way that this organization treats its clients. To be fair, though, I haven’t been a client of this group for a few years now and I hope that they have learned from having their terrible customer service reported around the internet. In any event, I covered my relationship with this group quite a bit on this blog, not the least of which was a post I created on my final payment to the company, which you can read by clicking here.

With respect to where that student loan money went, it broke out as $40,095 repaid in student loan principal, $24,251.61 paid in interest, and $1,893.69 paid in fees. That’s a total of $66,240.30. The interest and fees were all profit to the NJHESAA organization so they could have used that money for whatever they wanted. As I understand it, the principal for the NJCLASS loan program while I was utilizing it was generating from the sale of tax-exempt bonds. So, one would hope that the principal I paid to NJHESAA was used to repay their bond financing, but who knows? What I DO know is that NJHESAA not only made all of its principal back off of my loan, but it made a 65% gain from interest and fees (because, you know, I didn’t need that to buy a house or a car or anything).

United States Department of Education (USED) – Direct Loan
This one is interesting and it’s not a loan that I’m fully ready to discuss or breakout yet. Part of that reason is because the USED sold my loan to the Missouri Higher Education Loan Authority (MOHELA; the Missouri equivalent of NJHESAA). I didn’t ask for that loan to be sold, I didn’t want that loan to be sold, and I’m not happy that the loan was sold. I wanted to finish up repaying this loan to the organization that originally advanced it to me – the USED. However, I was repaying the loan so quickly that the USED considered me a strong investment and sold my loan to a private loan company. Wonderful.

My early figures show that I took out $57,575 in USED principal, capitalized some $1,445.15 in interest, and paid $205.04 in consolidation fees. Those numbers aren’t worth talking about, though, since I’ve paid an incredibly amount of interest since this loan started and that figure isn’t captured anywhere. Plus, this loan will ultimately have to be broken out between both the USED and MOHELA.

What a pain in the ass.

Anyway, there are some figures for you – where did my student loan money go? Well, the one thing that we know for sure is that it didn’t go towards building the economy and it mostly did not go towards helping other higher education students achieve their academic goals. What a wonderful waste of money and, more importantly to me, my time.

My Total Student Loan Debt Hits the Quarter Mark, More Work Ahead

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As of this coming Monday, I’ll have a remaining student loan balance of approximately $25 thousand. This is a good accomplish and it continues the march toward the next milestone of having just $21 thousand outstanding. Once I hit that milestone later this fall season, I’ll have repaid $100 thousand in student loan principal. Frightening.

Down to $25 thousand...

There’s no great “rah rah” moment for me to report in this update. No great wisdom to impart to you all during this update. I know that some of you like reading about the little financial details that I track both on a historical and regular basis, so I’ll give you some of those to placate you until next month’s student loan update.

For example, the $25 thousand balance that I’m left with represents about the cost of my student loans through the end of my Sophomore year of college. In other words, I’m currently paying off expenses that I incurred during the 2000 – 2001 academic year. That’s more than a decade ago.

Sucks.

Here’s another little financial detail for you: after Monday’s payment gets processed I’ll be accruing $3.10 in interest costs – daily. That’s right. Everyday of the week, imagine taking three crisp one dollar bills and setting them on fire… then throwing a dime at them in a futile attempt to stop the flame. That’s my daily bleed from paying these student loans. Just to show you how much of a financial strain losing $3.10 each day is, that amount translates to $1,131.50 each year.

If I didn’t make any more payments on this loan (which would be stupid), I’d still be pissing away over $1,100 each year.

And that’s your student loan update for this month. Can you tell that this repayment stuff is getting tiring?

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $95 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $25 thousand in principal to the United States Department of Education’s federal Direct Loans program. This loan is serviced by the Missouri Higher Education Loan Authority. To date, I’ve repaid over $35 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.