January 2012 Student Loan Debt Update
Yes, it’s technically February, but this my first chance to sit down and write this post.
January was the next month for Sallie Mae to reevaluate my monthly payment based off the extra payments I make on my student loan each month. Back in October, Sallie Mae dropped my monthly payment to $996.97. I paid an extra $1260 since then. Here’s what it is now:
$982.89–that’s a drop of $14.08. That’s my largest drop ever! Over the next 154 months of payments, that will save me $2,168.32. I like those numbers!
To make these posts more structured and consistent, lets do some debt stats:
Total Sallie Mae Debt: $90,276.28
Months of Payment Left: 154
Original Monthly Payment: $1024.70
Current Monthly Payment: $982.89
Total Pre-Payment Savings: $6,247.55
I am super excited for the next drop in April–my federal tax refund is on it’s way to me and most of it is going as an extra payment to Sallie Mae. I’m hoping for a big drop.
2011 Debt Update and 2012 Resolutions
Happy New Year everyone! Last year sped by so fast, and although I do not feel like I made much of a dent in my students loans over the year, I did hit a major goal and my networth is slowly increasing.
So as I’m reflecting on the past year and making personal resolutions, I figured this is a good time to think about financial goals and what plans I can make to eliminate my debt.
Looking back at 2011
The year started out on a positive note with two part-time jobs, one of which eventually became a full-time job with benefits, finally ending two years of under and unemployment. With my new regular income, I started getting serious about paying down my ridiculous student loan debt.
Here’s what I’ve achieved:
- Monthly payment amount dropped from $1024.70 to $996.97.
- Paid $7100 towards my principal, dropping my private loan about to $91K.
- Rebuilt my emergency savings from $300 to $2400.
I’ve made some good progress this year and I’m happy. Obviously I’d love to do more, but with my income, this was the most I could do for 2011.
Goals for 2012
I have a few very lofty goals for 2012. I don’t entirely expect to reach them unless I have some unexpected (positive) surprises, but I figure that if I work as vigorously as I can towards these two goals, whatever outcome I get (even if I fall short) will be fantastic.
Goal 1: Reduce my private student loan debt to under $80K.
I’m currently owe Sallie Mae about $91K. Though $11K seems like a small amount, my interest rates are high, and if I make just the minimum payments each month, only about $350 goes towards my principal balance. So for 12 months that’s only $4200. I want pay off more than double that, which means a lot of extra payments from me.
During 2011, I paid about $7100 towards my principal, so the goal isn’t too unreasonable. I just have to focus all extra money I have in my budget towards paying on this debt.
Goal 2: Reduce my monthly payment amount to less than $900
I slayed my 2011 goal to reduce my monthly payment amount to below a grand, but this goal isn’t quite so easy. During 2011, I reduced the amount by $27.73. To hit $900, I’d have to reduce it by about $97, more than three times what I did last year.
Will I meet this goal? Doubtful, but I think I can achieve a lot with the right mindset. An interest rate drop would help too, but I haven’t had one of those since 2008, so I won’t hold my breath.
Goal 3: Increase emergency savings to $3000
This is achievable. I had to give myself one easy one. I plan to contribute $50 a month to my savings, plus 25% of any bonuses and refunds I get during the year (the other 75% will go to my student loans, of course). Just my monthly contribution will get me to $3000, so everything else is just gravy.
What kinds of goals do you have for 2012?
Student Loan Update: Sallie Mae Drops My Monthly Payment Again
The past two months have been a bit of a challenge for me in the money department. Money hasn’t be tight or anything, but moving all of my money from one bank to the other is time consuming and confusing, especially for someone like me who is meticulous about keeping a balanced checking account. Because it was all sort of overwhelming, I didn’t make an extra payments towards my student loans since I was in the middle of moving money around between different accounts.
I successfully change my Sallie Mae autodebit to my new checking account and once my October payment amount was successfully deducted, I didn’t think much about it again.
Today I went to log in to my account to set up my extra payment for November and I was greeted with a little surprise.
Sallie Mae dropped my monthly payment amount again and I never got the email notification for it. Finally, I am under $1000 for my monthly payment. This is great because I was so close to my goal the last time Sallie Mae dropped my payment in July.
I really hope to give my student loans a good ass kicking over the next few months. It’s likely I’ll get a bonus in December and I should be due a tax refund next spring, so that’s extra money that will be funneled straight to savings and student loans.
Another thing that will help me in my fight against Sallie Mae: I recently got a Upromise credit card which I’m using for all of my day-to-day purchases (and don’t worry, I pay it off every month before I’m charged any interest). I get varying percentages back depending on my purchases, which goes straight to my student loans (quarterly).
Considering I started with 6 digit debt, this will be a long battle, but every reduction in monthly payment is the nice little boost that reminds me I’m just a little bit closer to being debt free.
July 2011 Student Loan Update: Lower Payment
When I got an email from Sallie Mae last week telling me I had a message about my account information, I couldn’t wait to log in because I knew–I just knew–that the extra payments I’ve made on my account the past few months must have finally paid off. They have.
Sallie Mae lowered my monthly payment amount to $1012.95 in April when I signed up for auto debit, which reduced my interest rate on a few of my loans. In hopes that I could lower my payments even more, I made extra payments each month. For the first two months it was about $100 extra each month. Then I was offered an official full-time position at work and got a little pay bump.
There was a bit of a delay between the time my pay increased and my health insurance and 401K kicked in, so I had EVEN more money than I was budgeted to spend each month. I funneled all that extra money towards my student loans, paying an extra $500 in June and July (plus $23 from Upromise earnings) hoping to make some sort of dent in my principal.
Finally, it made a difference. My new monthly payment is $1000.45 a month.
Oh Sallie Mae, you’re killing me! I’m just 46 cents away from a three digit monthly payment. Soon, hopefully, I can get it below a grand.
So thanks to the extra $1200 I put towards my loans during the last four months, I will now save $12.50 a month over the next 160 months of repayment. Total savings is $2000. Not too shabby. That’s almost enough to shave two entire payments off of my loans.
Combined with previous savings from Sallie Mae lowering my payments, my total savings so far is $3915.25 (the equivalent of almost 4 months of payments!).
I also started tracking the amount of interest accrued per day because it’s a ridiculous amount. Back in April I was accruing $22.81 a day in interest (after my payments were lowered thanks to the direct debit). After the most recent lowering, I am now paying $22.31 a day in interest. Not very impressive but it certainly adds up over time.
Unfortunately, I don’t think I’ll make too much progress over the next few months. Now with 401K contributions and health care eating a good portion of my monthly budget, there won’t be much extra money around each month. I’ll do what I can though.
Student Loan Auto Debit Lowers My Sallie Mae Payment
I haven’t written about my student loans in a little while. I’ve made some changes that are really helping me save money.
I’ve written many times about ways to lower monthly student loan payments. The one I hadn’t tried yet was utilizing benefits from my lender.
Honestly, Sallie Mae doesn’t offer many benefits to those of us with private student loans. I did find out that two of my loans were eligible for an interest rate reduction of 0.5% if I signed up for auto-debit of my bill every month. Since my monthly income is finally consistent, I decided to go ahead and sign up and see what kind of relief that reduction would bring me.
Now that my first auto-debit payment has been processed, Sallie Mae emailed me to let me know that my monthly payment has now been reduced from $1024.70 a month to $1012.95 a month. That’s a difference of $11.75. Not huge, but over the next 163 months of repayment, that’s a savings of $1915.25. And, of course, I’m going to continue using the money I have budgeted to pay my student loans to make extra payments each month to help pay down my principal balance faster.
Hopefully soon my monthly payment will be lowered again, and I’ll be just a few steps closer to my goal of eliminating my student loan debt.
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About Tiffany
I'm a 20-something living in the big expensive city of Chicago. I'm post-college and bouncing between underemployment and unemployment, while trying my best to be thrifty, save money, pay off my 6 digit student loan debt, and still have fun and enjoy life. I live with my boyfriend, a rabbit, and a chinchilla. Read more.
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