image credit: i saw a sea monster by ereniak (deviant art)
And so it begins…
This is the post I’ve been waiting years to write. Well, I made it. I’m finally here. My student loan debt has stalked me from a distance for seemingly an eternity…until now.
Like many battle weary debt warriors before me, I’ve fought and clawed my way past the understudies:
- $700 unexpected dental bill? Karate chop! No sweat.
- $10,000+ in medical expenses? Bam bam! Pummeled into oblivion.
- $30,000+ in credit card debt? Ha! I carved my name on its coffin.
Now, I step forward to face the giant, the master. The task before me is to defeat a monstrous mountain of debt bondage and despair; to destroy it piece by piece; to pay it down dollar by dollar. Nothing else is in my way now. The tide has turned and I am now stalking it. It will be a long battle, but hopefully not a bloody one.
I’ve been studying my opponent…
The Student Loan Leviathan
I did some math and recalculated all of my student loans. The original loan plus capitalized interest accumulated during school and after graduation during forbearance (1.5 years) totalled $112,258. My current balance typically hovers in the $111k range depending on how much interest has accrued so far in a given month. Over $650 of the $750 minimum monthly payment I make goes to interest.
This is the stuff of nightmares. Children, avert your eyes. I have 12, count ’em, 12 loan groups. The interest rates range from 4.625 to 8.25. Balances of these groups range from $1,561 to $39,418.
| Loan Type | Interest Rate | Original Loan + Capitalized Interest (2013) | Current Balance (varies w/interest calculations) |
| Group A | 6.55% | $7,963.07 | $7,527.61 |
| Group B | 6.55% | $16,955.61 | $16,030.63 |
| Group C* | 8.25% | $3,109.96 | $3,035.02 |
| Group D | 8.25% | $4,341.33 | $4,236.83 |
| Group E | 4.625% | $37,015.21 | $39,418.32 |
| Group G | 6.55% | $4,818.89 | $4,569.48 |
| Group H | 6.55% | $4,818.89 | $4,569.48 |
| Group I | 6.55% | $9,637.78 | $9,139.08 |
| Group J | 6.55% | $9,637.78 | $9,139.08 |
| Group K | 6.55% | $1,646.63 | $1,561.35 |
| Group L | 6.55% | $1,648.20 | $1,562.90 |
| Group M | 6.55% | $10,665.07 | $10,1123.37 |
| TOTAL | $112,258.42 | $110,903.15 |
Now that I have a minimum level of savings in the bank to keep me from losing sleep over minor unexpected expenses (woohoo!), I will send a test extra payment of $100 to see how making additional payments to a loan group directly on the loan servicer’s website works and if it does indeed reduce the loan principal. I will be following the debt avalanche method, so first up for my attack will be Group C which has an interest rate of 8.25% and a balance of $3,035.02.
I’ll admit, I’ve had a passing interest in looking into one of those refinance companies (SoFi, CommonBond, etc.) to get lower interest rates, but everything that I’ve seen says that you need to practically have a 2:1 income to student loan debt ratio among other criteria to qualify. Ummmmm, yeeeaaahh. I have a regular job, so that’s not going to be a possibility for me any time soon. So…
Enough talking…
“In the red corner is Student Loan Leviathan. A heavy weight at $111,000+, it is a notorious killer of dreams, hope and aspiration with many victims left in its wake.
In the black corner is DDSW. A flyweight with only $30k in assets, but boasting a string of debt victories in recent years.
Let’s get ready to RRUUMMBBLLE!”
Oppressive Student Loan Debt, I’ve sacrificed having retirement savings, my own place to live, my health, my own transportation, and more because of you. You stole lives that I could have led; the people that I could have become with more exposure to opportunities that come from taking risks, professional and personal, and by being able to travel etc. Behind you is the beautiful and sweet, sweet land of debt freedom. I’m going forward and you are going down!
Ding! … Ding! … Ding!
.
.
“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)
Double Debt Single Woman 
YES!! For sure, that loan is not for a little girl, it’s for a grown ass woman! Luckily, you’ve already proved yourself to be one, so you’re fine! I know you’ve had a tough journey. But honestly, 30k in assets, and a little extra in the bank for unexpected stuff, that really is something aswell. It will be a long road but you’ll gain momentum as you’ll have less and less interest to pay. 🙂 Have you made your first payment yet, beyond the minimum amount?
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So far I’ve just put in an extra $122 dollars to test out the payment system. It was pretty easy to apply money to just one loan group so that is promising. I’ll have to wait a couple of business days for the payment to process. I plan to start paying it down with my next paycheck. So I’ll have to be patient a bit longer… Thanks for the positive words!
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I feel this may be a battle that you may fall weary to from time to time but FIGHT FIGHT FIGHT
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Oh, I plan to!
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Good for you for facing that monster! I’m sure it is scary to add it all up and see it in black and white, but in a strange way it must also give you peace of mind. Work on those two with the 8.25 interest and you will see progress. Maybe work toward smaller knock-down goals at first like $12-15,000? You are a very good (and entertaining!) writer.
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Yes, that is indeed my plan of attack. I’m going to destroy these loans one at a time.Thanks for the kind words, Isabella. I’m glad you find my blog entertaining. I’ll tell you, being in six figures of debt is so ridiculous, these posts write themselves… 🙂
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As someone who has refinanced, you don’t need a 2:1 income to debt ratio, but I’d say mine was about 1.25:1 when I refinanced, and it has helped me a lot. You could also try looking into refinancing a handful of smaller, high interest loans, instead of trying to capture all of them.
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Thanks for sharing. I’ll give this another look!
Your blog is inspirational. In particular, I am taking a look at some of your older posts, when you were still in six figures of debt and waiting, waiting, waiting until the next payday to make progress on your debt repayment. Ah yes. I am so there right now…
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Thank you! There have definitely been things that have helped and hurt me along the way. I have a higher salary now (as opposed to temping), but I used to have no monthly housing costs–there’s a lot of ups and downs. I still anxiously await each payday though, so I can make whatever payment I’m planning, and since the refinance, it’s been helpful to see each payment go toward more principal. We’re hoping our house has gone up in value enough in the last two years that we can refinance that too.
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You are such an inspiration!!!! I have admired your tenacity and plain old common sense. You will make it to debt freedom land in less time than you think! I pray that you walk in favor and your home and job situations are already resolved in your favor.
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Thank you, Cathy! I certainly look forward to that day!
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I’m so happy for you!!!! I found your blog last Thursday and ended up reading every single post! I’m amazed by your sacrifices and really admire how hard you’ve worked. You’ve inspired to really dig in and tackle my own debt, all $163k of it! Thanks for sharing:)
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Thank you! Best of luck in your own debt payoff journey, Carolyn! Keep us updated. 🙂
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Well done for finally getting it down to just one opponent. I believe you can eat into this and the more you pay off, the less of a monster it is.
It must feel nice to wake up each morning knowing you owe nothing to any credit card any more, a sense of relief.
Good luck for the rest of the year. I will enjoy hearing that you are eating into this last debt.
Paul.
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Thank you, Paul!
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Hi! I’m sorry I missed a few posts — I’ve been semi-offline lately — but I’m checking back in and so excited to see you start on this phase. The nice (I know, I know) thing about these is that many of them are pretty small, so you should be able to knock those out pretty quickly and it’ll be *very* exciting to ditch the ones that have the really awful interest rates. Be sure to check in and let us know how it’s going!
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Thanks, C! I was getting doubtful as to whether I’d ever get to this point. Oh, don’t worry. I’ll be giving updates. 🙂
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I found your blog today and just wanted to give you some encouragement. I know paying off the student loans will be a long road but you will get to zero eventually! My husband and I started with 200k total (100k at 8.6% eek) 10 years ago. We are down to 5k now after throwing every extra cent at them for years.
On the refinance front. The newer companies you don’t have to refinance ALL of your debt at once. I know Earnest you can choose how much you want to refinance and that will affect your rate. They only do a soft credit check for an initial rate so there is no harm in looking into it. Play around with the total amount to refinance and payment schedules and see what it comes up with. Companies stopped refinancing when I started to tackle my debt and now are back into play when I’m almost done. So jealous I never got to take advantage of it!
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Hi Angie,
Thanks! You are living proof that it is possible to beat these things, no matter the size. Yeah, I have been giving refinancing a second look lately and have been weighing my options with some of the new lenders.
Wow. 10 years of debt repayment. Hats off to you! I’m sure you both have celebration plans when the last of that debt is gone. Congrats in advance. 🙂
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I wish you all the luck and success in this endeavor. You’ve done a great job so far. You have a lot of integrity and are refreshingly self-accountable without being bitter and judgmental like so many ranters I have seen. Colleges are overpriced, and we need to stop enabling this unregulated dwindle of hard working and talented people into serfdom. We need to spread awareness and make sure that kids in high school and younger today do not succumb to this scam. It is better to work 8 odd jobs and live day to day, than be a debt slave due to a delusion that is the middle class lifestyle with a white collar job where management calls all the shots.
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Thanks. Yes, I am paying the price for my financial ignorance. It will not happen again. My eyes have been opened, completely. Once I am out of debt, I will never be a debt slave again.
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This post was from the spring, and it is now nearly Thanksgiving, so I am not certain how your situation has developed. I think you should speak in detail with a proper insolvency attorney (not those ‘credit counsellor’ vulchers) If you are looking at $100k in unsecured debt, and only $30k in assets, it seems to me to be prudent to call it a wash and consult a bankruptcy trustee. Even if you lost everything you currently own (you will not), you will still make $70k by washing away this bad debt. I do not know your circumstances, and I am not a lawyer (you should seriously lawyer up); but if they are Canada Student Loans, you can receive a full discharge if you file for insolvency 7 years after you ceased to be a student; and 5 years if you are in hardship. Any toxic person who suggests that you are somehow immoral or an awful person for considering this should be immediately cut out of your life. Good luck!
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Thanks, Joseph. My debt is all student loan debt now. Unfortunately, in the United States, student loan debt cannot be discharged in bankruptcy. This debt stays with you until you die. In the meantime, if you don’t/can’t pay, then you are verbally abused by debt collectors, your credit rating is ruined, your tax refunds are taken, your paycheck can be garnished, you can be sued, and when you get old enough, they’ll take a chunk of your meager social security check. It’s a horrible system, but there is a LOT of profit to be made at the expense of hapless students, so nothing will be done about it. 😦
I envy the Canadian system.
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Have you considered insolvency? I think you should speak with an attorney.
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