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Posts tagged with: paying student loans

Ashley’s July 2015 Debt Update

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And, just like that, it’s time for another debt update!

This month has flown by! I think between our trip back to Texas the first week of the month and starting work in the middle of the month, I feel like I’ve barely batted my eyes and the month is nearly gone! But I’m happy to report that even with as fast as the month feels like it’s gone by, I’ve still made some decent progress on my debts. Keep in mind, I haven’t received a paycheck yet from my new job and we live on last month’s income, so there will be a month lag behind when I start receiving income and when I’m able to really bump up my debt payments. So this debt update only accounts for our regular income (from hubs’ business and my part-time job).

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Capital One CC-17.9%-Paid off in March 2014$413
Mattress Firm-0%-Paid off in May 2014$1381
Wells Fargo CC-13.65%-Paid off in May 2014$7697
BoA CC-7.24%-Paid off in June 2014$2220
License Fees-2.5%-Paid off in April 2015$5808
Navient - Federal Student Loan$36638.25%$266July$4687
ACS Student Loans$210397.24%$77June$21035
Navient - Dept of Education student loans$666146.55%$257July$63254
PenFed Car Loan$136652.49%$1000July$24040
Balance Transfer student loan (Former Navient 1-01)$48370% (through April 2016)$500July$5937
Medical Bills$60610%$25July$9000
Totals$115,871 (June balance = 118,051; May balance = 117,815)$2125Starting Debt = $145,472

Do you remember how last month I complained about my student loan balances going up, in spite of the fact that I’d made extra payments?? I’m still so confused about the whole situation (and, take this as another reason why you should avoid student loan debt like the plague!) because I had the same thing happen with BOTH of my loan service providers. That indicates to me that this is not an error on the part of my student loan company, but on the part of the national government (since my loans are government-backed). Does this even make sense? I must admit ignorance in that I don’t know how all the backchannel stuff works between governmental agencies and the student loan companies. But regardless, last month BOTH of my companies reported that my balances had gone up. This month, it looks like whatever error existed has been corrected because now both balances have gone DOWN more than they should have with just this month’s payments. It looks, to me, like whatever interest was added last month (which shouldn’t be added to any subsidized loans since I’m on Income-Based Repayment), has been removed and I’m back to the normal sized balances. So I guess that’s a sigh of relief.

You’ll also notice that I’ve made higher payments to my Navient loans – particularly the Federal loan. The federal loan is my highest APR loan. The minimum payment is only $16, but I’ve routinely been paying $116 for months. This month, however, I decided to really bump it up a bit more – to $266 (that’s the $16 minimum + $250 extra). I maintain primary focus on getting rid of the car debt (sooooo close to being at the half-way mark with the car debt and it’s going to go quick from there!!!), but I also wanted to beef up my Navient federal loan payment a bit, too, given the low balance and high interest rate. Forward progress!

I can’t wait to see what progress we can make once my new full-time job paychecks start rolling in! Wahoo!!!

And last note related to the job – I still haven’t been able to meet with the department head to ask about keeping my part-time job. A new department head has just taken office (so it’s not the same person who hired me anymore), and we were supposed to meet this week but I was emailed by the administrative assistant and told we’d have to push the meeting back to mid-August. I haven’t even met the department head yet (I think she’s working from home this summer because my office is right down from hers and I haven’t seen her), so I’m waiting to ask about it until we meet in-person. In the meantime I continue to work both jobs (doing the part-time job early morning and late evening). When I was hired I was currently teaching online for my part-time job and everyone knew about it so I’m assuming that my summer teaching is okay, though I’ll feel much better once I get official approval (fingers crossed) that I can continue teaching future semesters, too. I don’t expect my fall part-time contract until August, so the timing should work out in terms of asking permission and officially committing to continue teaching part-time.

On a more personal note, I’ve prescheduled this post because TODAY is my out-and-back trip to be with my Dad for an important doctor’s appointment. I’m not sure everything the appointment will entail (likely just a review of all previous tests and ordering one final additional test), but there’s a slim chance we could receive an official diagnosis. You may recall that I’ve said before I feel fairly confident I know what the diagnosis will be so this is just a matter of having it confirmed (side note: he was given a preliminary diagnosis already by another doctor, but this is a specialist, so we’re very interested in what he has to say). I feel like everything is “on hold” until we get the diagnosis and then the world will feel like its been turned upside-down, but at least we can start moving forward with the next steps and making a plan for the future.  I’ll have a lot more to say on the future financial implications once we know for sure-sure what the diagnosis is. So send happy/comforting/diagnosis-finding vibes my way : )  Not getting my hopes up for receiving a diagnosis just yet, but it sure would be nice if we get one today!

Happy Thursday, friends!


Opening Pandora’s Box

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There has been a LOT of discussion here about my student loans.

This is predominantly fueled by the fact that I’ve been paying minimums on my student loans while opting to pay extra on other debts (see last debt update here). But since my minimum payments do not even cover the interest portion of my student loans, their balances have continued to grow.

I think this has caused some psychological pains for readers (or maybe even physical pains – i.e., headaches!). Seriously. I thank you guys for being so invested in my debt situation and me, in general. I apologize for getting so many of you riled up over the situation!

I recently had some great comments on this post that I want to copy and paste verbatim:

Debtor said:

I’m going to make one last pitch for you to get those student loans to a reasonable level.

Can you see that in a year, your ACS and Navient loan balances have INCREASED? I know you want to get rid of the car debt but really this is hard for me to understand. At 2.49% why not just pay a little above the minimum car payment – enough so that it pushes your actual due date forward (like you are) but don’t focus on it.

An average interest rate of 7.5% on 72 grand is a LOT of money. But that’s just me. Like I said, this is just my pitch – i know you’ve said you have the emotional thing with the car but really, it’s such a big balance there too, it’s not like you’re going to pay it off this year. In other words, you paid off 8500 of the car in a year but your loan balance grew 3300. If you had allocated that money to your loan, your overall debt would be lower!

Ok, the accountant in me will give it a rest but does anyone else see what I’m saying?

And here’s a comment from V:

I know that loan seems huge, but I’m gonna just comment here that something funny happens when you tackle a really large number. At first, it feels pointless, and you plod a long and suddenly you take a look and go, okay it’s still huge but not that bad, then at some point you go…oh wow, I can totally kill this, and that is the most motivating thing ever!! I guess what I’m saying is avoiding looking at the huge loan is actually taking up more mental energy than you think; it’s like that giant elephant in the room, best to acknowledge it and tackle it head on. Are you really paying off the car first because you care about it more emotionally or because it allows you to avoid looking at the large loan for awhile longer? Just something to think about; perhaps your focus on the car is really just avoidance in disguise.

And here’s my response, in a nutshell…

  • I agree 100% that I have got to STOP letting these loan balances continue to grow. It’s counterproductive to be paying down some debts while others continue to rise. In the past I’ve basically ignored the problem because I haven’t viewed it as “new” debt (e.g., like buying a car or TV financed), but it totally IS new debt. That’s exactly what it is! Dave Ramsey says the #1 goal when you start trying to get out of debt is to avoid all new debts!!! I’m not doing this. And the only one suffering as a result is ME. This is going to change.
  • I stand firm with my decision to focus predominantly on my car loan (as opposed to the student loans). Here’s the deal. ALL of my student loans have a much higher APR than my car loan (for reference, car loan = 2.49%; student loans range from 6.55-8.25%). I feel like many of the comments are akin to saying “just pay off the highest APR student loan, then you can go back to the car.” But it’s not like that. Even if I were to do that, I feel like many of you would STILL be upset that I’ve gone back to paying off the car, given that it’s still half the APR compared to other student loans. So then I’d be stuck in this (seemingly) never-ending student loan pay-down that will take years and, meanwhile, be paying minimums on my car for the entire length of the car loan. I mean, my car balance is about $15,000; my student loan balance is about $95,000. That’s a HUGE difference and those student loans are going to be a HUGE mountain to climb. My preference is to pay off the car in full within the year and then throw that $450/month toward student loans. That $450/month is my largest monthly debt obligation. I want to get rid of it asap!

So here’s my solution to this dilemma….

I’ve finally – for the first time on the blog – opened up “Pandora’s Box.” In the table below you will see ALL of my Navient Department of Education Loans. But let me explain a couple things first….

First, this isn’t all of my student loans (I still have ACS loans and Navient Federal Loans, too). Also, you’ll notice that I’m predominantly focusing on the UNSUBSIDZED loans.

You may recall that I’ve signed up for the income-based repayment plan. In this plan, any unpaid interest on SUBSIDZED loans is forgiven. With my ACS loans (which are subsidized), my minimum payment does not even cover the interest, but my balance has remained steady because unpaid interest has been forgiven instead of being added to my loan balances.

While I’m focusing on paying down my car debt, I have GOT to STOP accruing interest on my loans. That means I’ll be paying extra toward them, but only on the unsubsidized loans. I hope this is not a controversial point. I owe all of this money and, eventually, all of it will be repaid. But it just makes most sense to accept the gracious gift from our government (there aren’t a lot!), to have my interest forgiven on the subsidized loans. That means I’ll continue to pay minimums on them and ONLY pay extra on the unsubsidized loans so I can keep the extra interest from accruing. Make sense?

Here ya go…

NumberTypeAmountAPRMinimum Monthly PaymentMonthly InterestDifference
1-01Unsubsidized5612.478.25%$20.42$38.5918.17
1-02Subsidized8762.696.55%$31.87
1-03Unsubsidized6967.406.55%$25.3438.0312.69
1-04Unsubsidized6794.026.55%$24.7137.0812.37
1-05Unsubsidized2215.906.55%$8.0612.094.03
1-06Subsidized860.806.55%$3.13
1-07Subsidized7433.456.55%$27.00
1-08Subsidized6572.026.55%$23.91
1-09Subsidized8762.696.55%$31.87
1-10Unsubsidized17557.996.55%$63.8895.8331.95
Total:260.1979.21

As you can see, my minimum monthly payment is $260.19. To this, I’ll be adding extra payments to cover the interest on my unsubsidized loans in the amount of $79.21, which equals a total monthly payment of $339.40.

Luckily, this won’t really seem like a larger payment, because I’m almost done paying off the license fees (which were $75/month minimum) AND one of our medical bills (which was $50/month minimum). So, thanks to the magical debt snowball, this shouldn’t be a big ding in terms of eating up additional income.

What this does mean, however, is that I’ve got to gear up to face a SERIOUS battle ahead.

Not only will I be facing this horrific monster (aka: HUGE student loan debt), but I’m going to have to spend a LOT of time dealing with my loan service provider on a monthly basis. You see, all of these loans are grouped together online so there is no way for me to pay extra only on certain loans. Instead, if I want to pay extra it is divided evenly amongst ALL my student loans. The only way to correct this is to call in every month to have a representative re-allocate the funds toward the specific loans I’m working on. Every month. Also, I’ve heard horror stories about how difficult this can be. Often times funds are still not applied correctly, causing interest to continue to be accrued. I’m not even going to lie. This is going to suck pretty badly.

But I do agree that I cannot continue to bury my head in the sand and allow these balances to keep going up. No way. So starting next month (April)….I’m waging war. Wish me luck as I prepare for battle!

Anyone have experiences dealing with Navient? How would you rate the ease of specifying extra payments and/or dealing with customer service?

Just for fun, check out this post that former blogger Adam wrote about dealing with Great Lakes. Read the comments, too!! What a nightmare, right?!?


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