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.
Great News at Work This Week…
If you’re a regular reader, I’m sure you’ve noticed less posting lately. That’s because I’ve been working 40+ hours a week at my job for about a month now. Things have been really busy and crazy there and the extras hours are great because it’s extra money.
Finally this week I was offered an “official” full time position with all the benefits that come with that, plus a pay bump. This is extremely exciting. Since I graduated from college I have not been able to find a full time job, instead I’ve worked crappy part-time jobs and spent a lot of time being unemployed. Finally I have a job that I like, for a company I love, with people I love to work with.
This is going to mean a lot of changes for me. I get to rethink my budget and focus more money on paying off my debt. I also have to work on budgeting my time more effectively and set aside time for personal endeavors (like this blog). There’s a lot of change happening in my life, but it’s very exciting. I have a lot to look forward to now.
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.
Getting Back on Track Paying Off My Student Loans
Previously I posted about tricks I was using to pay off my ridiculous amount of student loans and the little strides I was making to cut those down. If you’re a long time reader, you probably noticed I promptly stopped talking about it. This wasn’t out of laziness but more out of shame because I backslid majorly during most of last year.
From the end of April to the beginning of December last year I was unemployed. I searched endlessly for a job, but all I had to support myself was unemployment and some money here and there from temp work and freelance projects. Unfortunately that was not enough to make my private student loan payments of $1021.59 each month (my federal loans were in unemployment deferment). I was determined not to go into forbearance again, because that’s how my student loan payments ballooned so much in the first place.
To make up the difference each month I drained my savings account until it reached the minimum I needed to have to keep the account open ($300) and then I had to start borrowing money from my boyfriend to make the payments. Then we reached a point where we couldn’t afford to make the student loan payments and pay our other bills.
I still did not want to put my loans in forbearance, so instead I started making two payments on my loans. When my due date came, I would pay what I had and then pay the rest as soon as I had the money. Luckily enough, Sallie Mae has a grace period of about two weeks or so after your bill is due where you can still pay without any penalties or late fees. I did that for a couple months, but as a result each month my monthly payment amount was slowly rising because I was being charged extra interest on the amounts I didn’t pay in time each month.
This became a vicious cycle where I couldn’t keep up, but then I got lucky and scored two part-time jobs and was able to catch up on my payments so I’m paying normally again. Even though I recently quit my seasonal job, I should still make enough money to cover my student loan payments as long as I’m smart with my money and stick to my budget.
Now that I am back on track, my monthly student loan payments are $1024.70. That’s 27 cents more than when I started making payments in January of 2009. I’ve basically undone all of my work and then some. Now I’m ready to get back on track.
I filed my tax return two weeks ago and received my refund on Friday. I decided to be smart with my refund money, so I transferred half of it to my savings account and used the other half to make an extra payment on my student loans to the amount of $650. I don’t know how much of a difference it will make, but hopefully I can lower that monthly payment soon and get back on track with snowballing away my debt. I will continue to round up my payments each month and pay whatever extra I can.
From now on I hope to do monthly updates on how my debt repayment is going. After I receive my next Sallie Mae bill and see how the extra payment effected my bill amount I’ll post an update. For now, I’m just excited to be back on track.
Rescheduling and Reprioritizing
Life has been busy busy. I’ve been working two part-time jobs, keeping me busy for six out of seven days of the week. It’s definitely tricky. The stress started to effect me a lot more quickly than I expected. Suddenly it seemed like my life became an endless cycle of sleeping and going to work, with me scrambling to live the rest of my life in the pockets of time in between. I was falling behind on everything, but I was making money.
I was making a lot of money. Enough to catch up on my student loans and my other bills and have extra spending money to buy all the things I’ve wanted or needed and just couldn’t afford while I’ve been unemployed. Problem is, there’s no time to go buy those things or even enjoy them.
After a lot of soul searching I decided I didn’t want to be miserable anymore, so yesterday I gave two weeks notice at my second job. Part of me feels relieved. I look forward to having a real weekend again and time for myself. The other part of me is worried because of finances. Cutting the second job means that extra $600 or so a month is gone. That makes for less wiggle room in the budget and less fun stuff. Instead I have to be disciplined and, well, thrifty in my spending.
I’m optimistic though. Hopefully soon my main job will become a full time job and I’ll finally be able to get into a steady groove with my finances and paying off my debt. And of course, I’ll be posting here more.
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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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