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Summing Up 2011 in Terms of Student Loan Repayments

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Some people with seemingly insurmountable student loan debt spent a good portion of 2011 crying about their debt burden and whining that their dream job wasn’t waiting for them when they graduated. They are in the same “nowhere land” that they were when 2011 started. Other people saddled with insane amounts of student loan debt occupied areas around the nation and accomplished absolutely nothing of significance in the process unless you count spending taxpayer dollars on excessive cleanup and security measures as significant. I opted to spend 2011 focusing on dramatically reducing my remaining student loan debt to a manageable level that would perfectly position me to eliminate the debt in 2012.

Where the student loan burdened crybabies and occupiers failed, I succeeded.

When 2011 began I had $54,385.85 in total student loan debt remaining payable to the United States Department of Education. When 2011 ended I had $34,911.14 in total student loan debt remaining (still payable to the USED). The reason why I share these numbers is because I want people out there with incredible amounts of student loan debt to know that you can defeat your debt and you can do it without the dream job or the six figure salary. You can defeat the debt by working hard and giving up many of the luxuries of life until you can afford them.

I’m not going to recount my point of view on these topics because I’ve done so over and over again in 2011 (and prior years). However, what I thought would be helpful is if I put together a brief list of links to other student loan entries from 2011 that focus on certain topics related to repaying student loan debt.

Personally, I think that the last entry linked above is a really good one. If you have a few minutes and you haven’t read that one yet, then I recommend giving it a go. Here are some other interesting tidbits regarding the repayment of my student loans in 2011…

  • Daily Interest. When 2011 began I was accruing $6.71 every day in interest alone. Today, my student loans accrue $4.30 in interest on a daily basis. It’s not great, but I’ll take a $2.41 reduction in interest accruing everyday! Over the course of a year, that’s $879.65 saved in interest alone. Still think that it’s not worth it to drastically overpay your monthly bills?
  • Principal Repaid. In 2011, I repaid a total of $19,474.71 in principal.
  • Interest Repaid. In 2011, I paid a total of $2,133.68 in interest. Also, because the tax code is written to reward lazy people with a redistribution of wealth from those of us who work their asses off (i.e. people who aren’t rich, but still work like crazy to earn enough money to repay their debts), I won’t be able to count the full $2,133.68 as a tax deduction. Why? Simple – I worked too hard in 2011 and earned too much money so my eligibility to count the $2,133.68 as a tax deduction is nullified. Think about that – I worked extra hard to earn extra money that I did NOT keep or stick into an account somewhere. Instead, sent that money to the government to repay this loan and that same government is going to penalize me for that hard work in repaying their loan by not allowing me to count the $2,133.68 as a tax deduction. Now tell me how this government is working in the best interests of the hardworking middle class again???

Look folks – either you get busy repaying your debts or you get busy occupying public space and/or crying and whining about something that only you can really change. Getting busy repaying your debts works – my experience proves that time and time again. Bitching and moaning about how your debt is someone else’s problem isn’t going to get you anywhere – the public displays of childishness proved that throughout the latter half of 2011.

Here’s to pushing harder than ever to have my student loans totally repaid by the end of 2012!

Some People Are Dumb – Reflecting on Comments to Student Loan Story

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Some of you may remember a few months ago when I noted that I was quoted and referenced in a recent USAToday.com article. This was the second time that I was featured in the newspaper, though the first time I was featured it was in an above-the-fold headline story with my face plastered all over the front page. Yeah, it was pretty cool.

But the latest article was an online-only publication and while the first article no longer has the bevy of ignorant comments listed underneath it, the second article certainly has some comments that make you go “Hmmm…” (my thanks to the C&C Music Factory for the reference!).

Huh? Wuh? Some people don't seem to be able to think...

Or, in pug terminology (as shown in the pictures above), some of the comments on the recent student loan article had me cocking my head to the side wondering what the hell I was reading. While I admit that the comments were in no way as ignorant or arrogant as the ones that were posted after my first student loan article was published, some of these comments were just mind-boggling. For example, the following comments were posted:

“The horror of having roommates and driving an 11 year old car. My god, what a huge sacrifice!! I had roommated til I was 30, went off on my own for a year, got engaged and then got married. I would probably still have roommates if I found some cool enough. Why not live a cheap as possible?”

Now this moron couldn’t spell roommates seemed to misinterpret an otherwise very easy, simply element of my story. You see, my story was about how I managed to pay off so much of my student loan debt in so short a period of time. As was cited earlier in the very same story that this guy was commenting on, I live with roommates and drive a well-worn 2000 Honda Civic. Those aren’t complaints – they are just methods by which I spend less money and thus put more money towards paying for student loans. Now, imagine how downright stupid this person must be to have read that portion of my story and interpreted it as me complaining rather than sharing a good strategy for saving some money to ultimately put towards repaying student loans. I’m tell you, some people are just dumb. Here’s another one.

“You graduate from college with $100k+ in loans and no special skills, what you expect. At least he is paying off, many are not.”

Okay, well the second part of this comment is dead on accurate – I’m paying off my student loans instead of bitching and moaning about how I can’t afford them or woe is me or whatever, blah, blah, blah. But how ignorant – how downright dumb – can someone be to think that I graduated from college with no special skills? Really? REALLY? You think that someone who is 30 years old could manage to pay off about $75,000 in student loan principal and about $30,000 in student loan interest over a 4 year period and NOT have any special skills that are clearly desirable in the job market?

Really? Are people honestly that stupid? Look, I could go on and on about how I’m one of the leading financiers of a very niche community-based industry in New Jersey, but something tells me that the dull-minded person who wrote that stupid comment would read about what I do for a living and go, “Wuh?” Idiot.

Those were the two comments that had me mimicking the pugs in the picture above. However, most of all I find myself appalled at the comments where people say shit like, “Well, I went to college and paid for it all by myself with no student loans – so why DON’T YOU!?!?” Ugh. I guess that everyone’s life situation has to be like that person’s life situation, huh? Talk about the epitome of ignorance and arrogance.

Anyway, just sharing some frustrations with the public display of ignorance and stupidity that was unfortunately posted on USAToday.com. Now, back to the reality of demolishing my student loans!

My Student Loan Repayment Progress is Referenced and I’m Quoted in USA Today

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Hi everyone! If you’ve been reading my blog for a while, then you know that I accumulated a ton of student loan debt over the course of my higher education experience. You also know that I spent all of last year aggressively repaying one of my two student loans and that I now owe less than half of the amount that I started repaying in 2006.

If I can toot my own horn – my progress is pretty impressive by any measure.

Those of you who have been around JerseySmarts.com for an even longer period of time may remember when I was interviewed by USA Today back in 2006 about the enormity of my student loan debt (JerseySmarts.com Article | USAToday.com Article). Well, earlier this week – some five years after the good folks at USA Today plastered my mug on the front page of their newspaper (above the fold, thank you) – I had a follow up interview with the newspaper to give them an update on my student loan repayment progress.

USA Today Provided a Brief Update and Quote on My Student Loan Repayment Progress

Sandra Block – the personal finance guru at USA Today who wrote the original story back in 2006 – interviewed me this past Wednesday for about 20 minutes. It was really a lot of fun! Ms. Block is an excellent interviewer and she really allowed me to tell her the story of my last five years. In fact, she referenced my student loan repayment progress and even quoted me in an article that was published on USAToday.com yesterday. You can read the article (I’m referenced and discussed in Point 3) by clicking here.

I’m really pleased with the article and the few lines that are allotted to my story within it. As always, Ms. Block did a good job of cutting through my story’s fluff and boiling it down to an easily digestible “real story” for the readers to absorb. And I hope that the readers did absorb the reality of my experience and that my story helps them with their own repayment plan.

If anyone out there would ever like to talk about their student loans or discuss their repayment plans, you should always feel free to send me an e-mail. I’d be glad to share more about my experience and do my best to provide you with my reality-tested advice. Of course, you could also keep an eye on JerseySmarts.com because this is where I ply my writing trade, but you already know that, right?!

In short, I’m glad to be back in USA Today after five years of dedicated, hard work repaying my student loans. And I encourage you all to stay tuned. I’ve got about $51 thousand left outstanding and I’m getting ready to gear up on my repayment of that loan in the coming months.

The light at the end of the student loan repayment tunnel is becoming brighter, clearer, and more in focus after all! 🙂

This Is Completely Unacceptable – The $555,000 Student Loan Debt

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Who knows more about repaying student loans in New Jersey than I do? Seriously, by the time I’m done repaying my student loan debt I’ll have the knowledge and know-how to write a book about how to do it right. So, from up here on my ego-confident perch as the man when it comes to student loans in New Jersey, I felt compelled to comment on a story that came through my inbox many months ago. This story has to do with a woman with a student loan debt of nearly $555,000.

Repeat: $555,000!

WOW!!! That’s incredible… and completely unacceptable.

When I saw the headline on Yahoo! News that read, “The $555,000 Student-Loan Burden,” I had to read more. And what I found was the story of Dr. Michelle Bisutti. If you want to read her story directly as reported by Yahoo! News and the Wall Street Journal, you can click here and take it in for yourself. Here are the parts of the story that struck me and stuck in my head:

When Michelle Bisutti…finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.

It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.

WHAT?! A $54 thousand fee for turning the loan over to a collection agency?! Okay, look. I understand that lenders need to be repaid. Heck, I work for a statewide loan fund and when my borrowers don’t repay their loans, my professional life sucks. So, I completely understand the need for people to repay in good faith. But a $54 thousand fee for turning a debt over to a collection agency? Get out of here! That’s ridiculous and should be reversed without question.

How dare someone charge that type of fee? For comparison’s sake, if an interest rate was that outlandish it would be called usurious and the lender could possibly be taken to court and penalized. A $54 thousand fee… good grief!

There is an estimated $730 billion in outstanding federal and private student-loan debt…and only 40% of that debt is actively being repaid. The rest is in default, or in deferment, which means that payments and interest are halted, or in “forbearance,” which means payments are halted while interest accrues.

Ummm… can anyone say “bubble ready to burst?” When you combine the high unemployment rate with the increasing student loan debt burden – well, it’s not a good thought. Only 40% of student loans are actively in repayment? Oh boy…

Dr. Bisutti says she loves her work, but regrets taking out so many student loans. She admits that she made mistakes in missing payments, deferring her loans and not being completely thorough with some of the paperwork, but was surprised at how quickly the debt spiraled.

As a guy whose student loan debt story was also spread out all over the national media, I’m glad that this paragraph was included in the story. One of the missing pieces of my story in USA Today was that I pretty much knew what I was getting into with respect to my student loan debt. It appears that Dr. Bisutti knows how she wound up in the position that she’s currently in and I can tell you from experience that this puts her a few steps ahead of other student loan borrowers that are falling behind on their payments.

While in school, her loans racked up interest with variable rates ranging from 3% to 11%.

Eleven percent?! Are you kidding me?! Now we are dealing with usurious interest rates if you ask me…

She maxed out on federal loans, borrowing $152,000 over four years, and sought private loans from Sallie Mae to help make up the difference. She also took out two loans from Wells Fargo & Co. for $20,000 each. Each had a $2,000 origination fee. The total amount she borrowed at the time: $250,000.

In case any of you are wondering how a person borrows $250,000 in student loans – there’s your answer. Quite frankly, I know folks that have over $200,000 in student loan debt. In fact, I’d be one of those people if I decided to stay in Graduate School until I received a Doctorate. And while I do anticipate eventually going back and obtaining a doctoral degree, I want to eliminate or dramatically reduce the remainder of my student loan debt ($80 thousand as of this writing) before I take that step.

In 2005, the bill for the Wells Fargo loans came due. Representatives from the bank called her father, Michael Bisutti, every day for two months demanding payment. Mr. Bisutti, who had co-signed on the loans, finally decided to cover the $550 monthly payments for a year.

Ugh. What a horrible resolution to this particular loan’s status. One thing that always stuck in my mind when I was an undergraduate (not a graduate student) was that my Mother co-signed for my student loans. I’m not quite sure what benefit, if any, I received from having her co-sign, though I know that she made a quarterly interest payment on the loans while I was in school. There was no way that I was going to let any of my student loan debt fall back on my Mom and Dad’s shoulders, so as soon as I had the opportunity to consolidate my $121 thousand in loans I did so.

Again, I didn’t receive a lower interest rate because I had a co-signer with an excellent credit score, so other than providing the student loan companies with an additional repayment source, I’m not sure what the benefit of a co-signer is for today’s undergraduates.

She recently entered a rehabilitation agreement on her defaulted federal loans, which now carry an additional $31,942 collection cost. She makes monthly payments on those loans — now $209,399 — for $990 a month, with only $100 of it going toward her original balance. The entire balance of her federal loans will be paid off in 351 months. Dr. Bisutti will be 70 years old.

Well, at least the good Doctor found herself a repayment plan. But with only $100 of each payment going towards the original balance, she’s going nowhere fast. However, if I can make any recommendation to Dr. Bisutti it would be to overpay when possible and as much as possible.

The debt load keeps her up at night. Her damaged credit has prevented her from buying a home or a new car. She says she and her boyfriend of three years have put off marriage and having children because of the debt.

I readily admit that there was a time when my student loans kept me up at night. Those days are pushing further and further away, but they’re still close enough where I remember the gut-wrenching feeling of not believing that there was an easy way out of the student loan debt situation. Of course, I’ve found my way and I’m beating the crap out of my student loan debt, but there are hundreds, thousand, and even tens of thousands of student loan borrowers out there who are in way over their heads. I sympathize with their situations and hope for the best for each of them (and their lenders, who should be repaid).

Back in June 2006 when I was plastered on the front page of USA Today the one thing I remember most from that whirlwind experience was that people tried to project their personal situations on my situation. I can’t tell you how many internet message boards I read that said I should have gone into the military because, “Back in 1946 that’s what I did and the government paid for my education!” Or how many times I read crap like, “Joe should have gotten a job while in college and not eaten so much!” (I had two jobs in college and there were MANY comments about my weight on the internet message boards because, well, people are really, really dumb).

That said, I dare not project my personal situation on the good Doctor chronicled in this story. Like I wrote above – I’ve also been kept awake at night because of my student loan debt. I know what that suffocation feels like and I’m sorry to hear that anyone else has to go through it. I know what it’s like to not be able to buy a home because you can’t begin to put away the proper down payment. I know what it’s like to not be able to purchase a brand new car for the same reasons. And I know all too well what it’s like to push off new or advancing relationships because the thoughts of your student loan debt consume you.

So, if this blog entry reaches Dr. Bisutti I hope that she is doing well and making progress in repaying her debt burden. Good luck, Dr. Bisutti!

Take Action: School Lunch Meat Gets an “F”

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School lunches are a weird thing – either you love them or you hate them. When I was in high school, they had really good cheeseburgers (which probably wasn’t the best thing to be eating in hindsight). But when I read about information like you’ll see below, it makes the taste of that cheeseburger turn really foul.

The message below is what popped up as something that I should share with my friends and family (and online readers) after I signed an online petition. I hope that you’ll take a minute and read through this information and, if you so choose, sign the online petition linked below.

Do you know what’s less safe for our children than fast-food? Their school lunch!

A recent investigation by USA Today found that the meat sold to U.S. school cafeterias faces less testing and lower safety standards than the meat that’s served in most fast-food restaurants — outlets that aren’t otherwise known for their health consciousness and are as cost-conscious as the most passionate deficit hawk.

That’s right: McDonalds, KFC, and Jack in the Box test the ground beef they buy five to 10 times more frequently than the USDA tests beef for U.S. school lunches! And these restaurants have for years refused to buy certain kinds of lower-quality meat and chicken which the USDA continues to accept.

I just signed a petition to ask Agriculture Secretary Vilsack to set better standards for school lunches. I hope you will, too. Please have a look and take action.

http://act.credoaction.com/campaign/school_lunch_fdn/?r_by=-2078083-S9YA0qx&rc=confemail1

Again, I hope that you are moved to some action on this information. All it takes is a few minutes to sign an online petition, if that. I believe that one of the reasons why we are experiencing an epidemic of obesity in this country is because of the foods we are eating. Yes, food quantities are a problem (we eat too much food), but a worse problem is the quality of the food that we are putting into our bodies. When I think about feeding horrible food to our children in school lunchrooms, it makes me pretty angry. Please take a minute to sign that online petition – we have to fight back against industrial agriculture at some point and the school lunchroom might be the perfect place for action.