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Increasing Student Loan Payments


Nothing like being kicked when you’re down, right?

Well, I’ve had a good run. After 3 years of Income Based Repayment where our student loan payments were only a couple hundred a month (it varied, but was never over $300/month in total), I knew there would be some changes in store after updating our income info using last year’s tax information (this update is required annually). What I did not know or expect, was that the change would be SOOOOOO extreme.

Overnight, we went from a minimum payment of $300….to a minimum payment of over $1,000. THAT’S MORE THAN OUR MORTGAGE!!!! My take-home pay is under $5,000/month, so we’re talking over 20% of our income!!! AHHH!!!!!

After my update, I was notified that we no longer qualified for IBR based on last year’s income. Unfortunately, this occurred during summer when all our finances just went straight to hell so I didn’t give it much thought like I should have.  No thought, that is, until the payment was auto-drafted and my account ended up being overdrawn.

To say I “freaked out” would be an understatement. It was my own fault for not paying closer attention, but I felt totally blind-sighted!

So I did something that maybe (probably?) messes up my credit. But I felt I had no option. I called and asked for my student loans to go into forbearance status for a few months. It was approved the same day. I’ve continued making smaller-sized payments (in the $200-$300 range), but no payment is actually due until January. I’m trying to reapply for IBR with our current income (since the update was based on our tax information from last year, it showed a much higher salary than what we have this year given that hubs no longer works and I dumped my part-time job, too).

Re-doing our current income paperwork is a whole process, as you can imagine.  I haven’t completed it yet but my hope is that this voluntary forbearance gives us the time to get all the paperwork submitted and processed and – fingers crossed – maybe we can get approved for a more reasonable-sized payment. It will still likely be larger than in the past. But we just cannot afford $1,000/month right now as a minimum payment. We’d be much more comfortable in the $300-ish range. I did talk to a representative who said there are other programs available, too (e.g., I was told we could apply for the “standard extended payment”). I’d love to get back on IBR if we can qualify but, if not, I’m glad other options exist. The one problem is the TIME it takes for all that stuff to be processed. I felt backed into a corner with the forbearance because I needed a lower payment NOW and didn’t have time to wait a month (or however long) for a new application to be processed and approved (or potentially rejected).

So that’s where we’re at with my student loans. Another piece of the messy financial puzzle.

New Debt and a New to Us Car


I am going to sit down this weekend and put together a post on all my existing debt, I realize it is long overdue.  Unfortunately, I did have to accrue some new debt this past weekend.  I had to buy a car.

Back Story

About two years back, I got a great deal on a used car. We put miles on that car with all the back and forth between Virginia and Georgia over the past year, almost daily trips to the gym and now about 100 miles a day between my work commute and an hour drive one way to the gym…our used car served us well.  But about 7 weeks it died.  We have been making due with one car (my son’s 1996 Honda Accord) and borrowing a car (my Grandmother’s) one time a week when three of us had to be in different places.

The Search

I’ve spent the last 7 weeks trying to get by, and trying to determine the best plan moving forward and trying to save more money thinking I might could by a used car with cash. I have learned that I HATE car shopping and I hate the game of car shopping.

The Car

I settled on a 2011 Chevy Impala with 63K miles on it for $10K out the door (including everything, no other out of pocket costs.)  My uncle found it for me, knows the previous owner and made sure it was in good shape. It has new tires, new brakes and so on. Rather than cleaning out the emergency savings I have, I financed the entire $10K at 7% interest for 3 years.  My goal is to pay it off in 2.  I have scheduled payments of $400 a month automatically to start and will go up from there. (The required monthly payment is just at $308.) My uncle delivered it to me from Virginia and I am paying him back the $178 he paid for the tow trailer rental.


This is not the car of my dreams. It’s not one I would have even considered. But the price is right, it came with full service records, it’s a good size for our family while being reasonable on gas for all my driving and I am assured I can get 200K miles out of it if taken care of.  I spent a lot of time figuring out the best plan.

2011 Chevy Impala

Literally within the hour of driving away with this car this past Saturday, another tragedy struck our little family. More on that tomorrow.