Lights! Camera! Action!

It’s go time.

“I thought I was doing good in life; I thought I was succeeding.”

So we’ve talked about where I am, where you are, and the options in between. Today’s blog will be a little different. Today I talk about the day I took control of my student loan debt.

You know up until this point I thought I was doing good in life; I thought I was succeeding. I had a good job, I graduated college, I was saving money, over paying the minimum payments on my loans each month, I was able to afford to rent a nice house, and go out and do nice things. I thought I was living the dream, just kind of blissfully ignoring the elephant in the room staring me down.

“Today is the day I take control of my student loan debt.”

I realized I needed to re-evaluate my situation when I went online to make another monthly payment on my parent plus loan and noticed that it seemed higher than the previous month even though I had been paying a little more than the minimum for almost a year. As I dug deeper I found the hole kept getting deeper. I realized that I had only been paying on the capitalized interest and the interest was building faster than I was paying. If I had kept up my payments for the normal length of the term they had “agreed on” I would have paid over 3 times the amount I originally borrowed. Almost $100,000 on one loan and I’d be almost 60 when it would be paid off. Something needed to change.

“Almost $100,000 on one loan”

Am I happy about paying 70 thousand dollars of debt? No. Am I happy I’ve spent my whole life broke trying to get to the light at the end of the graduation tunnel only to have to still be broke? No. But!

I’m tired of being mopey and depressed over it and I’m tired of waiting for the slim chance that this burden would be lifted and placed on someone else through me not paying (as I talk more in depth about in my other blog here–> So Many Choices!). So as I said before, I’m taking control. So let’s talk about how!

Disclaimer: First I have to give credit where credit is due. My wonderful girlfriend at the time (now Fiance) has been such a huge help through all of this and continued to show her love and support as I get my life together and out from underneath this student debt.

I sat down, faced the fact that I have a huge amount of student debt, and wrote it all out. One loan per piece of paper (that’s a lot of paper by the way).

“I wrote a plan to pay my student loans first when I get my paycheck and live off the rest. Think of it like paying yourself first…”

Every Student loan I have, amounts I owed on them, how long I had been paying on them, the interest rate, all of it. I’m not going to lie, it’s a scary thing to look at when it’s all said and done and $70k worth of debt is staring you in the face. Next I organized it by highest amount and interest rate. For me that wasn’t too hard, I have a huge Parent Plus loan for over $30,000 with a high 7.8% interest rate that’s right up at the top of the charts for worse loan I have. The other two at the top are Sallie Mae for around $6000 total at around 9.8% interest. I can’t stand that woman…If you’ve ever not paid on your Sallie Mae loans you know why too. If you don’t know what I’m talking about, then consider yourself lucky and I’m sure I could write an entire other blog just about her.

Anyways… So there’s the worst of it right there. The rest fell into it’s place as I continued to organize the pile. (You can do this on a computer, but I recommend doing this on paper instead. It makes it a lot more real to see it all laid out in front of you and once it’s stacked it helps me feel less overwhelmed.) Once I got it all organized I took what I had set aside in my savings and dumped all of it except enough for an emergency fund into Sallie Mae. I paid 2/3rd’s of it off right then and there and you know what? It was bittersweet; I’m glad to almost be done with that terrible company but sad that I just blew my entire savings on paying back debt. I then scratched out what I owed on the paper and wrote down the new amount. I wrote a plan to pay my student loans first when I get my paycheck and live off the rest. Think of it like paying yourself first, but instead it’s going to student debt.

“I’m on a plan to pay all of my student debt…in 3 years or less.”

I still save a little each month, but I’m on a plan to pay all of my student debt off one loan at a time, as much in bulk as I can muster in 3 years or less. That’s around 50% of my salary going to student debt each month. If I can manage to do this, live in a house, pay on a car, and still have a decent living then anyone can with the right tools and know how.

Let me know in the comments how you approached your student debt and if your strategy is working for you and Let’s tackle this together!

Smile.

~Indebted Dwight