No time for celebration today, folks. Yes, it’s great that I’ve dropped my student loan debt by another thousand bucks so it now rests at about $73 thousand. That’s a great accomplishment and I don’t want to overlook how great it is to keep this strict repayment plan in place. I’m proud of myself, etc, etc.

However, I’m irate at the New Jersey Higher Education Student Assistance Authority (NJHESAA). I sent the thousand dollar check to NJHESAA on Monday, October 18th; the check was applied to my account on Wednesday, October 27th. That is completely unacceptable. Even if I account for two days in transit from my mailbox to NJHESAA’s mailbox, it is absolutely unfathomable that it takes them a week to process a payment. The NJHESAA ought to be completely ashamed of itself.

But it gets worse.

One day after I sent that check, I sent a second check to NJHESAA. That’s right, folks. On Tuesday, October 19th, I sent a $4,300 check to NJHESAA that has not yet been applied to my account. Let me repeat that in different terms. I sent a gigantic check to NJHESAA TWO WEEKS AGO that they have not processed yet.

Unacceptable. Absolutely unacceptable.

At this point, I really should file some type of Better Business Bureau complaint against NJHESAA. What excuse could these people have for sitting on my check? Could the check be lost in the mail? Sure. Is it more likely that the check is lost somewhere in the creepy, disgusting NJHESAA system? Absolutely. And what bothers me even more is that I’m getting ready to cash out another few thousand dollars from my investment portfolio so I can apply the funds to this account. But what is going to happen? Am I going to send a $10,000 check only to have it sit on some desk in someone’s office for a month? Unacceptable.

NJHESAA is the worst financial institution that I’ve ever interacted with in my life – and I used to bank at TD Bank! Given my previous, gross experiences with NJHESAA, I can only imagine that they are holding my check in order to generate more interest on this loan. In short, NJHESAA is a disgrace.

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. I currently owe $73 thousand, which breaks down to $18.9 thousand owed to the New Jersey Higher Education Student Assistance Authority and $54.5 thousand owed to the United States Department of Education. Follow my student loan repayment story on JerseySmarts.com.

Thank you to everyone who commented on this blog, on my Facebook page, who sent me an e-mail, text message, or BBM regarding the big decision that needs to be made in my student loan repayment plan. The aggregated feedback from everyone seems to be that I need to cash out of my investment portfolio and use the proceeds of the cash you to retire my New Jersey Higher Education Student Assistance Authority (NJHESAA) student loan.

I concur.

Not only has NJHESAA been troublesome to deal with (including sending their friends and allies onto this blog to consistently attack my previous entries regarding their horrible customer service), but the interest rate that they charge me is damn near criminal. When you combine the fact that this private student loan company has been very tough to deal with and the fact that they have been charging me an arm and a leg in interest, this question becomes almost a no-brainer.

Of course, a thorough review of the pros and cons of this plan also requires that I project out the possible return on my existing investment portfolio. Trust me when I say that I’ve done that time and time again and while I like the fact that I’m in the stock market, I think the bulk of my “big” returns have already been achieved. Plus, there’s nothing stopping me from getting back into the market on the very next paycheck that I receive after the NJHESAA loan is retired.

In real numbers, my NJHESAA loan has about $19,800 outstanding in principal right now. The accumulated value of my investments as of today is about $17,500. Obviously, I’m not quite at the point where I could cash out all of the investments and completely retire the NJHESAA loan, but I estimate that my investment portfolio will match my total outstanding principal balance sometime around mid November (you guys all know how I ridiculously overpay this student loan each month, so this estimate shouldn’t be a big surprise).

Thank you all for helping me make this big decision. Stay tuned for the latest and greatest with my student loans – the next few weeks are going to be very big!

We start today’s student loan story with a note to my roommate to buzz off! The other day he told me how when he reads my blog he glosses over the student loan repayment posts because they’re repetitive. While his assessment of these entries may be correct (how many times can I say, “I’m down another thousand,” and not come off as repetitive?), there are two reasons why I report each decrease in my total student loan debt. First, I want to show the rest of the overburdened student loan carrying population out there that it can be done. Second, reporting my student loan debt reductions is a good way to hold myself accountable to stay on the repayment plan. In fact, I took the very same approach during a previous iteration of this blog back when I was in graduate school in 2004/2005 and attempting to lose a tremendous amount of weight (which I did – and then gained 70% of it back!).

Aside from my roommate’s comments, what’s more important about this week’s update is that the principal balance on my New Jersey Higher Education Student Assistance Authority (NJHESAA) loan is less than half of what it was when I started this repayment plan at the beginning of the year. In real numbers… On January 1, 2010, my NJHESAA loan was just over $41 thousand and now it sits at $19 thousand.

That’s a pretty impressive decrease for a 10 month period, huh? 🙂 And, actually, if you look at how much money I’ve dumped into my student loans since January 1, 2010, the average amount that I’ve spent PER DAY on student loans this year is $95. Amazing, right?

In fact, if you look back at some of my earlier writings around this repayment plan, I was looking forward to this moment in particular. And for those of you who haven’t read these entries (or stopped because they were repetitive), you can read this clip from the December 21, 2009 entry regarding my student loans:

My plan for the coming year is to send as much excess money as I can to pay down the NJHESAA loan. Once I get it down to a manageable level (unfortunately, $41 thousand is not manageable) my plan calls for me to revisit my savings and investment accounts to see whether my aggregated funds can finish off this loan and still leave me with some playing money.

I imagine that once I can get the NJHESAA loan down to $20 thousand or so, I’ll be able to give some serious consideration to wiping it out with one payment. And, if I continue to stick to my plan, then I might be hitting that number right around this time next year…

Well, as it turns out I skipped that $20 thousand “remaining outstanding” number on my NJHESAA loans and went straight from $21 thousand down to $19 thousand. Oh, and I reached $19 thousand two months earlier than I originally projected. As you can see from the quoted text above, back in December 2009 I was anticipating that – at this point – I could cash out of my savings and investment accounts and use the proceeds to repay the remaining outstanding balance on the NJHESAA loan. In truth, though, while my investment account has increased this year, my savings account is all but depleted. And now I’m faced with an interesting personal finance situation. I’ve been mulling over this situation and running internal financial projections on this question for two weeks now:

Do I clear out my investment account and put all of those proceeds towards eliminating the NJHESAA loan? Or do I keep my investment account and just stick to this repayment plan? Here’s one pro and one con for each…

Keeping the Investment Account. Pro – I bought some of these stocks at a very low price and have realized some amazing gains on them. If I sell out of the investments, then I lose that huge return (and I have to pay taxes on my gains). Con – I’m not sure how much higher some of these stocks are going to go in the current market, so I might just be sitting on dead money (dead in that it’s not earning a return in excess of the interest being generated each month on the NJHESAA loan).

Cashing out the Investment Account. Pro – If I opt to wipe out the investment account at some point in early to mid-November, I could use all of the proceeds from the sale of these stocks to wipe out the entire NJHESAA student loan. Con – I lose all of my investments and have to pay taxes on the gains I realize (note that taxes go up on these investment gains come the new year).

The other aspect of this that I have to project out is how much more money I’ll have each month since I won’t be sending checks to NJHESAA any more. During this time of the year (the autumn months and early winter) when I have my income from my day job and two teaching incomes flowing into my account, I typically send about $3,000 each month to the student loan companies ($2,700 or so to NJHESAA and $300 to the USDOE). The $2,700 figure to NJHESAA is more of an average for each month; in September, for example, I sent NJHESAA $3,500. If I was to eliminate the NJHESAA loan, my total monthly student loan payment would be reduced to about $300 each month. A 90% drop in money-out isn’t so bad; and neither is an average of an extra $2,700 each month to play with…

What would you do in this situation? I know which way I’m leaning, but I’d love to hear your thoughts so I’m leaving this post on JerseySmarts.com for a few days, uninterrupted by new entries!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. I currently owe $74 thousand, which breaks down to $19.8 thousand owed to the New Jersey Higher Education Student Assistance Authority and $54.5 thousand owed to the United States Department of Education. Follow my student loan repayment story on JerseySmarts.com.