Even though its been about a month and a half since my last student loan update, I’ve been working at slowly continuing to chip away at the overall debt. At the last update, I still had $28 thousand left outstanding. Today, I’m down to about $26 thousand outstanding. Not so bad for a month and a half.

I’m closing in on another significant milestone with the student loan repayment – the day when I’ve repaid a total of $100,000 in principal. By my calculations (more on those in the next paragraph), I should be making that major payment sometime in the late fall – around late October or November. It’s one of those bizarre milestones where you think to yourself, “Wow. What an accomplishment! Oh shit… I still don’t own a home or have a sufficient retirement fund for someone my age. Damn it…”

With respect to my calculations on this student loan repayment – you all know that I’ve been on a very aggressive repayment schedule up until a few months ago when I was hit with a dead Honda Civic, a need to purchase a brand new car, and a tax bill that wrecked my financial planning. All of those expenses hit between February and early April (when I paid my income taxes). Believe it or not, its taken me about three months to recover from that financial kick in the face. The bad thing about that recovery is that it took about three months. The good thing is that I can get somewhat aggressive again in my repayment of my remaining student loan balance. On that topic (and now that I’m six full years into repayment – two years and seven months into the aggressive repayment), I’m ready to be done with this damn albatross already.

Before I completely finish up my student loan repayment and entries like this one get fewer and fewer on the blog, I’m going to sit down and figure out just how much money I’ve paid/lost in student loan-related payments over the years. Despite my best efforts, I’m going to guess that when all of this is said and done I’ll wind up paying $175,000 in total payments (principal, interest, and consolidation fees). Wonderful. Just f’ing wonderful.

And people out there wonder why people in my generation are putting off major life events like moving to a different part of the country, getting married, starting a family, or buying a house? When I figure out what that “total payment” number is, then you’ll know why people are putting off these major events. Ridiculous.

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 $26 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 well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Since early March I’ve been trying to write an entry on repaying both the car loan and the student loan. However, it’s not coming together the way I want it to so I’m putting that entry on the back burner until I can figure out exactly what it is that I’m trying to say. In the mean time, though, I’ve always thought that it helped me along in my repayment process to list on the blog how much money I still owed on my student loan. I’m going to try to incorporate that type of information onto the blog regarding my car payments, too.

Today, I owe about $28,000 on my student loan. A few months ago, the loan servicing for my remaining balance was transferred from the United States Department of Education (USED) to the Missouri Higher Education Loan Authority (MOHELA). I wasn’t asked about this transfer nor did I offer any implicit approval of the transfer and I’m not happy about it at all. The problem with these types of transfers is that when you devolve this type of process – a student loan borrower repaying a loan to the United States government – to a smaller, state-based agency, you lose some of the necessary perks of managing your account. For example, due to my massive monthly over-payments to the USED my required monthly repayment never really hit my account. I’d always overpay the amount that was due for each month and thus the automatic monthly payment was never processed.

With MOHELA, though, it doesn’t matter how much I pay each month – I’m getting hit with their stupid standard required payment anyway. Now in one respect that’s not a problem because I’m going to overpay the loan and retire the debt anyway. But in another respect this is a real nuisance and effectively screws up the wildly successful financial plan that I’ve been using to repay these loans. Some might say, “Well, just don’t let them automatically charge you for the monthly payment and pay on your own schedule.” And that would be the right answer except for the fact that by being in the automatic payment program, I receive a 0.25% interest rate discount on my loan. The same discount applied to when the USED serviced my student loan, but the difference in their program is that they don’t force the monthly payment if you overpay the amount of the monthly payment.

See how annoying this change is for an involved, aggressive borrower?

It would have been nice if the USED at least notified me that they were considering this change and gave me the opportunity to reject the change. I already fought my battles with the stupid quasi-state agencies when I dealt with the brain trust over at the New Jersey Higher Education Student Assistance Authority. Idiots.

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 $91 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 $28 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 well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.