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Save Money & Time: Take 15 Credits!

28 Apr

Casey Doten, Financial Aid Administrator

One of the best things you can do for yourself in college is keeping yourself on track to graduate on time. Only 3 in 10 students in Indiana finishing their Bachelor’s degree within 4 years and that creates financial challenges for students who fall behind on graduation. Not averaging 15 credits per semester puts you off of a 4 year graduation plan which comes with a host of potential issues.

15 to finish Purdue.jpg

First and foremost is the cost of attending one extra year of college. An extra year at Purdue costs an extra $10,002 for in-state tuition ($28,804 for nonresident). Not to mention the costs of housing, food, books and other school supplies, and the cost of travelling home a few times per year. All in all, the estimated cost to be a Purdue student is $23,032 each year ($41,994 for nonresidents). That’s a lot of extra money to spend for the same degree that can be obtained in four years.

Remember: tuition at Purdue is at a flat rate for anyone taking 8 or more credits hours, so whether you’re attending part-time with 8 credits or are registered for 18 credits, the cost is the same!

If the extra tuition expenses isn’t enough of a downside for taking more than 4 years, the extra year lost also gives a couple other undesirable effects:

More time for student loan interest to accrue:
If you had borrowed all the $27,000 available to you in Federal Direct Loans for your first four years your balance on those loans would increase from $1,080 with an extra year of interest to accrue (assuming a 4% interest rate). This isn’t even considering any extra borrowing for the additional time or the interest that accrues during the repayment portion of the loan.

Lost wages and retirement: NerdWallet recently did a study into the impact of taking extra years to graduate. One extra year would result in approximately $46,355 in lost income and $82,074 in lost lifetime retirement savings!

Adding up the tuition paid, lost wages and retirement savings equals an incredible $138,431 for the extra year to get the degree ($157,233 for nonresident). Obviously this is not an ideal situation, so here are some tips to help keep you on track for graduating in four years!

So what can you do?

Take 15 credits every semester! Almost all degree require 120 credits which smoothly divides into eight semesters of 15 credits. While it might be tempting to take less credits your first semester or two, you’ll have to make those up another semester which you may regret when you’re taking those extra credits along with upper-level courses. Plus, students who start out at 15 credits per semester are more likely to graduate.

It may be obvious, but it’s important to pass your classes and earn grades that allow them to count for requirements. Many courses in your major or that you need for pre-reqs require you to earn Cs or higher to count. So contrary to what people may say, Ds do not really get degrees.

If you’ve fallen off the 15 credits per semester average, you can make either make it up during the summer or by taking extra credits in a fall/ spring semester. If the idea of taking 18 credits is a turn off, plan on taking summer courses! You can receive scholarships through both the financial aid office and the Think Summer office if you qualify.

Will Your Student Loans be a Burden?

31 Mar

 

Whether you’re an incoming freshman looking into financial aid or in the midst of senioritis ready to graduate from college, student loans have probably crossed your mind. Even if you know how much you will/ already do owe, it still ends up being an abstract figure in how it will impact your life.

student loan burden

A pretty simple rule of thumb to estimate your minimum monthly repayment without using a student loan calculator is to assume you’ll be repaying 1% of what you owe per month. That doesn’t sound like much, but that’s $100 every month for every $10,000 that you owe. So while the average 2016 graduate has $37,712 in debt that means they are paying about $377 every month to their loans.

And then there are people like me who borrowed a little more and are paying almost $550 for borrowing $48,600 ($54,800 thanks to interest).

If you’re not sure how much you’ve borrowed, you can check out the National Student Loan Database System (nslds.ed.gov) to double check how much in federal loans you’ve borrowed.

Even knowing what your repayment amount is doesn’t mean much unless you consider your future salary. A common problem here is that people overestimate their starting salary. Nearly half of 2015 grads thought they would earn $40,000 or more, but in reality only about ¼ of grads actually made it.

So if you’re earning a starting salary of approximately $35,000, your take home pay after taxes will be approximately $2,230 per month (depending quite a bit on your tax withholding and state you live in).

While there’s no hard rule about what a comfortable proportion of loan repayment is, we generally advise students that they are getting into a difficult territory if their monthly minimum repayment is over 20% of their take-home pay. So for the previous $35,000 salary that’s about $44,600 in debt according to this rough formula.

If you’ve ended up in a situation where your minimum amount due is a financial burden then you will want to explore the different repayment plans available to you. Just remember that the standard 10-year repayment plan that you are placed into automatically allows you to pay the least amount of interest and finish in the shortest time frame.

Additionally, if you seek out an income-based repayment plan with the hopes of earning public service loan forgiveness, keep in mind that it could be on the chopping block if politicians continue to see the program costs exceeding their original budget.

Understanding Your Financial Aid Award Letter

28 Mar

This slideshow requires JavaScript.

Did receiving your financial aid award letter raise more questions than answers? Take some time to check out the slideshow above for a little bit more information. Keep in mind that you can pause it to read more thoroughly, or view it in PDF format with clickable links by clicking here.

If you have any questions about your financial aid, remember that you can contact the Division of Financial Aid a few different ways: stopping by in-person, giving us a phone call, or sending us an email.

Typically the quickest way to get answers to questions or solve problems is to stop by our office in-person. We always accept walk-ins as long as we are open Monday – Friday, 8 a.m. to 5 p.m.! Our office is in room 305 in Schleman Hall.

If stopping in-person isn’t an option, phoning in is usually a good choice too! Just call (765) 494-5050 during our open hours (Monday-Friday, 8-5) and we will be glad to help you out whether it’s just a quick question or fully advising you on your aid!

If you can’t stop or call in during our open hours, you can always send us an email to facontact@purdue.edu. While you won’t get the immediate assistance you might otherwise by visiting or calling, this works best if your schedule doesn’t match up with our open hours.

Financial Aid February: Choosing a Loan Repayment Plan

28 Feb

All information on repayment plans is from this article by David Evans, Ph.D.
Additional info added by Casey Doten, Purdue Financial Aid Administrator

There are two main types of repayment plans you can choose from: traditional and income-driven. For borrowers that will qualify for Public Service Loan Forgiveness (PSLF), income-driven plans may be the better option. Income-driven plans will require an annual verification of income. This fact sheet describes each of the repayment plans as well as pros and cons of each. For more information about each of the repayment plans visit the Federal Student Aid website.

Traditional Plansstudent-loan-repayment-plans

Standard Repayment Plan

The Standard Repayment plan consist of equal monthly payments over a 10-year period of time. This repayment plan is good for those who can handle making their monthly payments and make enough money to afford them. This payment plan is best for those who have minimal other debts and start working right out of school.

The Pros: You’ll pay off your loan faster compared to other plans, and pay less interest as a result.

The Cons: Your monthly payments will be higher than those made through other plans.

Graduated Repayment Plan

The Graduated and Extended Repayment plans could be an option for you if your income is low when you graduate but will increase quickly. Under a graduated plan, payments start out low and increase during the repayment period, usually every two years. This is a good plan if you can’t afford your current payments but know you will make more money in the years to come.

The Pros: Your loan is still paid off within 10 years.

The Cons: You’ll pay more interest over the lifetime of your loan compared to the Standard Plan.

Extended Repayment Plan

An Extended Repayment Plan is an option if your loan amount is more than $30,000 and you want to stretch your repayment to 25 years.

The Pros: Smaller monthly payments (since they’re spread out over as many as 25 years) and more time to pay off your loan.

The Cons: You’ll be saddled with payments for a longer period of time as well as pay more interest.

Income-Driven Plans

If you qualify for an Income-Driven plan, these are often the most attractive options if you’re willing to recertify your payment each year (it’s not very difficult). However, some of these are contingent on when you took out loans! If you’re interested in student loan forgiveness*, you’ll need to be enrolled in any one of these plans.

Income Based Repayment Plan

If you’re not making enough money to cover all of your monthly expenses the Income Based Repayment (IBR) Plan would be a good option. There are two separate calculations for IBR which are dependent upon when you took out your student loans.

The Pros: The IBR plan takes into account your annual income as well as your family size. Your payment will be 10% of your discretionary income** if you were a new borrower on or after July 1, 2014. Otherwise it will be 15%. Any outstanding balance on your loan will be forgiven after 20 (for undergraduate loans) or 25 (for graduate loans) years.

The Cons: You will have to pay income taxes on any forgiven debt unless you qualify for PSLF (this is true for all loan forgiveness).

Income Contingent Repayment Plan

If you have a federal Direct Loan (other than a PLUS loan), you could opt for the Income Contingent Repayment (ICR) Plan. Your payments could be as low $5 or even $0.

The Pros: Your monthly payment will be the lesser of 20% of your discretionary income or on a repayment plan with a fixed payment over 12 years. You can have your remaining loan balance forgiven after 25 years of regular payments.

The Cons: You’ll pay more over the lifetime of your loan than you would with a 10-year plan, your payment could be lower than the monthly accrued interest and your loan principal will grow. You will have to pay income taxes on any forgiven debt unless you qualify for PSLF.

Income Sensitive Repayment (ISR) Plan

The Income Sensitive Repayment (ISR) Plan is only available for those with Federal Family Education Loan (FFEL) Program. Payments are based on your annual income, family size, and total loan amount. You would pay the loan off in fifteen years.

The Pros: Each lender has their own calculation, but generally it is between 4% and 25% of your monthly gross income, although your payment must be greater than or equal to the interest that accrues.

The Cons: It’s only available for up to five years. After that time, you must switch to another repayment plan. You must reapply annually, and there’s no guarantee that you’ll have continued enrollment in the plan.

Pay as You Earn Repayment Plan

The Pay as You Earn Repayment (PAYE) Plan is another option for those not able to afford their current monthly payments.

The Pros: The PAYE plan takes into account your annual income as well as your family size. Your payment will be 10% of your discretionary income. Any outstanding balance on your loan will be forgiven after 20 years.

The Cons: PAYE is only eligible to those who were new borrowers on or after October 1, 2007 and must have received a disbursement of a Direct Loan on or after October 1, 2011. You will have to pay income taxes on any forgiven debt unless you qualify for PSLF.

Revised Pay as You Earn Repayment Plan

The Revised Pay as You Earn Repayment (REPAYE) Plan is very similar to PAYE. This plan was created to allow more borrowers the opportunity to have their payments lowered to 10% of discretionary income.

The Pros: Not dependent upon when you took out your student loan, the payment will be 10% of your discretionary income. Any outstanding balance on your loan will be forgiven after 20 (for undergraduate loans) or 25 (for graduate loans) years.

The Cons: If you are married, your spouse’s income will be considered whether taxes are filed jointly or separately. You will have to pay income taxes on any forgiven debt unless you qualify for PSLF.

Summary

Federal student loans offer various ways for repayment. If you are in a situation (like so many others who have taken out student loans) that is not ideal for standard repayment of your loan, consider these options. There is a lot to consider when you are trying to decide which repayment plan to choose. Using the Federal Student Loan Repayment Estimator can help you make your decision by showing you what your payments would be under each of the plans described above.

*A note about loan forgiveness: There are two different kinds of loan forgiveness, Public Service Loan Forgiveness (PSLF) and loan forgiveness from your income-driven repayment plan ending. While both plans require you to be enrolled in an income-driven plan to reap the benefits there are some key differences:
-PSLF requires being employed at a qualifying employer in public service (non-profits, government, etc.) for 10 years/ 120 qualifying payments before forgiveness takes place. Standard forgiveness is after 20 or 25 years depending on your repayment plan.

-Any loan amounts forgiven under PSLF are tax-free, but not under standard forgiveness! So if you still have a balance on your loans after 20 (or 25) years, you will owe taxes on it as if it is income. While it’s still better than paying the amount back, it’s important to know it will have ramifications.

**Discretionary income = Your income – 150% of the poverty level in your state for your family size

Financial Aid February: Answering your Work Study Questions

23 Feb

Work study is a unique form of financial aid that doesn’t act like other the other types of aid that might see on your Financial Aid Award Notice. Questions about work study are one of the most common ones that students contact the Financial Aid office about, so we took some of the most common work study questions and provided answers right here!

financial-aid-february-work-study

So what is work study?

Federal Work Study is a federally funded form of self-help aid that allows students to earn money for school by working part-time jobs.

How is work study different than other aid?

While your grants, scholarships, and loans will credit your account balance and pay your bill, work study will not. You have to earn your work study funds during the school year by working in a job that can utilize your work study funds (on-campus & off-campus non profits typically). It is paid to you via bi-weekly paychecks similar to most other jobs.

What are the advantages of work study?

Having work study provides some notable positives for students who utilize it. The biggest is that it opens up a large pool of employers who would not otherwise be able to hire you. These are mostly on-campus departments who typically have the most flexible hours and are near where students live. The other positive is that the funds you earn through work study do not count as income when you file your FAFSA, which can help keep your expected family contribution (EFC) low.

How do I use my work study?

You will need to find a job that can utilize work study. These can either be on-campus or off-campus at non-profits that have work study agreements with Purdue. You then need to provide your employer with a Payroll Authorization Form (PAF). You can print one from your myPurdue portal, but only one. If you have more than one work study job or need another one for some reason you’ll need to stop by the Financial Aid office in Schleman Hall to have another printed for you.

How do I find work study jobs?

Both the Division of Financial Aid and Student Life host job posting boards for Purdue students. You can use these boards to find jobs on and around campus. Keep in mind that not all off-campus employers can use your work study funds. You can still work off-campus, but the money you earn won’t be from your work study fund.

Can anybody get work study?

No, Federal Work Study is for students who demonstrate a high level of financial need as determined by the results from the FAFSA. If you did not receive work study and would like it, you can contact the Division of Financial Aid and ask to be put on a wait list.

How do I receive my work study funds?

Even though work study is a form of financial aid, you have to earn it by working. After finding a job and working there, you will be paid bi-weekly depending on how many hours you work and what your wage is.

Do all work study jobs pay the same?

No, the hourly wage can be very different from one job to the next depending on the level of skill required and many other factors. It is worth searching available jobs to find one that pays well while also being a good fit in terms of duties, flexibility and location.

Do I need work study to find a job?

No, but work study makes it much easier to find a job around campus. Many academic departments and off-campus employers will only hire work study eligible students. Having work study opens up a pool of employers who might not be available otherwise.

What if I don’t plan on working right away?

You should still accept your work study if you think you might want it. Students who do not accept their work study risk having it cancelled so that it can be distributed to students who requested to be on the work study wait list.

Can I use work study to pay my tuition?

Sort of. Your tuition bill for the semester is due on the first day of class, you cannot start utilizing your work study funds until the semester starts. This means you won’t get paid until after the tuition bill is due. Work study is typically a good way to give students money for pay as you go expenses like rent, food, or other miscellaneous costs but it isn’t great at paying tuition. The best way to apply your work study earnings toward tuition is if you save it in your own account and use it to pay the next semester’s tuition.

What if I run out of work study?

Depending on your situation, you may have a couple of options. You may be able to talk with your supervisor and see if your employer can pay you from their normal funds. If not, you can contact the Financial Aid office and see what options you might have including adjusting your budget.

Have questions that didn’t get answered? Be sure to comment and we’ll let you know the answer!

 

Video

The Real Truth About Financial Aid-Adam Ruins College

21 Feb


Reminder, Purdue’s priority deadline to file the FAFSA is March 1st! To receive maximum consideration for financial aid, you need to file before the deadline. Not sure where to start? Check out our Financial Aid February blogs for information on everything financial aid from start to finish.

Financial Aid February: Aid for the Summer

17 Feb

Taking summer courses is a great way to get ahead on credits and graduate earlier. Not to mention utilizing your rent to the fullest if you have a 12 month lease. However, summer aid is not automatically created for your account when you file the FAFSA. With a few extra steps you can get summer financial aid lined up and have you ready for summer!

How to Apply for Summer Aid for Summer 2017:

Complete the 2016-17 Free Application for Federal Student Aid (FAFSA) no later than June 30, 2017 and satisfy all additional financial aid requirements listed on your myPurdue account. Note: although you can file the FAFSA as late as June 30, you should file it much earlier in order to have your aid ready for the summer term.

Complete the 2017 Summer Aid Application under the Financial Tab of your myPurdue account. Once your application has been successfully submitted, it could take two to three weeks to receive a Financial Aid award. Please monitor myPurdue for updates. Initial summer financial aid notifications will begin approximately March 6th.Financial aid february think summer.jpg

Quick Info:

Eligibility for your Federal Loans is on an annual basis, with the summer term being part of the aid year for the semesters before it. If you used all of your federal loan eligibility up, you will need to utilize other sources of aid for your summer bill.

If you drop hours or do not initiate course participation at any time during the summer sessions, your aid may be adjusted and you may receive a bill.

If this will be your first time taking summer courses, check out the ThinkSummer scholarships!

You can also check out the Bursar’s Office site for current tuition and fee rates. Did you know that, in the summer, you pay the same amount for 6-9 credit hours?

Be sure to notify the Division of Financial Aid if you decide to cancel your summer aid application.

Choose the location you plan to attend for summer 2017 to obtain additional information about how to apply and aid eligibility.

Want more info about summer courses, internships, housing and more? Check out Think Summer.

Financial Aid February: Securing Your Aid

16 Feb

As the semester approaches, you will need to finalize your financial aid to guarantee your Purdue bill gets paid on time. If you haven’t already, you’ll need to go into your myPurdue account and accept your financial aid.

What are my responsibilities to keep my financial aid?

Double-check that all requirements are complete.

Check for any red flags on your myPurdue account and check that all expected aid is crediting to your Purdue invoice.

Confirm your enrollment.

On your myPurdue account, under the “Financial” tab, click on “Confirm your enrollment for the coming semester.”

You need to do this before each semester. By confirming your enrollment and accepting fees you are acknowledging your financial obligation to pay — by the due date — any tuition, fees, and housing charges assessed and billed to your student account.

Check the following if you are unable to confirm your enrollment:

  • Are there holds on your account?
  • Did you apply for and accept financial aid?
  • Are you enrolled in enough credit hours? E.g. You are enrolled in 9 hours, but your financial aid is set up for 12 or more.
  • Do you have outstanding Financial Aid requirements on myPurdue?

Keep up on requirements for merit scholarships.

The Trustees and Presidential scholarships do renew automatically, but have criteria required in order to do so:

  • Continuous full-time enrollment (12+ credits each fall and spring semester)
  • Having at least 30 credits completed at the end of each year (30 for freshmen, 60 for sophomores, 90 for juniors), transferred credits count toward this amount
  • Maintain a 3.0+ GPA

Direct where to send your refund.

You can sign up to have a Direct Deposit for your financial aid refund via myPurdue. Otherwise, refund paper checks will go to your local address listed on your myPurdue account. Parent PLUS refunds can be sent to you or your parent, depending on what is indicated on the Parent PLUS Loan application.

Expect to receive your refund no earlier than one week before the first day of each semester. Plan your textbook purchases and rent payments/deposits accordingly.

Waiting on your refund? Check out some factors that may be delaying its arrival.

Sign up for the Bursar installment plan or make one payment up-front.

If there is a remaining balance on your Purdue invoice that you plan on paying out-of-pocket, you will need to sign up for an installment plan or make a full payment before the first day of the semester.

We have some suggestions if you need assistance covering remaining costs.

Financial Aid February: How to Accept Your Aid

13 Feb

After reviewing your award notice, all that’s left to do is to accept or reject your offers for the award year. The majority of grants — free money that does not need to be paid back — are automatically accepted on your behalf. However any loans offered will require your decision, and at this point you will need to report any private scholarships you received.

While no official deadline for accepting aid exists, keep in mind that financial aid will not credit to your Purdue invoice until aid is accepted. The Division of Financial Aid recommends you accept aid no less than four weeks before the start of the semester. Each type of aid has unique requirements for acceptance.

 

Federal Loans, Purdue Loans, and Work-Study

  1. Accept the offered aid on myPurdue under the “Financial” tab > “Award for Aid Year” > “Accept Award Offer.”
  2. Follow the directions based on type of aid below.

Subsidized/Unsubsidized Stafford Loans

You will need to complete a Master Promissory Note (MPN) and Loan Entrance Counseling at www.StudentLoans.gov. Sign into the website with the student information and click “Complete MPN” or “Complete Counseling.”

Purdue Loans

Complete a promissory note at ECSI — a third-party servicer Purdue uses for this loan. This is done each year you borrow a Purdue loan.

Federal Work-Study

  • Find a Work-Study job by searching through job postings for student life or other on-campus departments and contacting listed employers for the application process.
  • Once you have secured a Work-Study job, visit the Financial Aid office on campus for a Payroll Authorization Form (PAF). Give this form to your employer when you begin your job. Remember you can only work during the semesters you are enrolled and can pick up the PAF no earlier than the first day of the semester.

Parent PLUS Loans

  1. One parent needs to submit a Parent PLUS Loan application at www.StudentLoans.gov. Sign into the website with the parent information and click “Request PLUS Loan.”
  2. Once credit approved, the same parent, if a first-time Parent PLUS borrower, will complete a Master Promissory Note (MPN) at www.StudentLoans.gov. Sign into the website with the same parent information and click “Complete MPN.”
  3. If credit denied, the parent has several options: replace the Parent PLUS loan with $4,000-$5,000 Unsubsidized Stafford Loan and/or private loan up to the remaining cost, reapply for the Parent PLUS Loan with a co-signer, or reapply with a different parent borrower.

Graduate PLUS Loans

You will need to complete a PLUS Loan application at www.StudentLoans.gov. Sign into the website with the student information and click “Request PLUS Loan.”

Once credit approved, the student, if a first-time Grad PLUS borrower, will complete a Master Promissory Note (MPN) at www.StudentLoans.gov. Sign into the website with the student information and click “Complete MPN.”

Private Loans

  • Research your private loan options. Review our private loan information and search online for lenders. Complete a loan application with your lender. Most lenders have applications available on their website.
  • Once credit approved, contact your lender for the next steps necessary.
  • Your lender will contact the Division of Financial Aid for certification of your loan. Once certified, the loan will appear in your financial aid package on your myPurdue account.

Note that the private loan application process typically takes at least 30 days. Apply as early as you can so that funds arrive in time for the bill due date.

Private Scholarships

Report your private scholarship to the DFA on your myPurdue:

  1. Log in to your myPurdue account.
  2. Under the “Financial” tab > “Award for Aid Year” select current aid year from the drop down box.
  3. Select the “Resources/Additional Information” tab and report your private scholarships.
  4. Don’t forget to give your donor the Bursar address to send a paper check.

My Student Loan Journey Pt. 2: Climbing the Mountain of Debt

10 Feb

Casey Doten, Financial Aid Administrator – Purdue University

I knew going into college that I’d have to take out student loans to help finance my degree. While getting myself $48,600 into student loan debt was less than ideal for me, I was able to earn my degree. However thanks to the miracle of interest, my student loan debt had increased from the $48,600 that I had borrowed to $54,800 by the time that I began repayment.

The scary part? That $54,000 could have been even higher. Thankfully I had a couple of things going in my favor that helped to prevent that. A good portion of my federal loans are subsidized and did not accrue interest during school. I also had a loan which required me to make quarterly payments to help keep the interest from adding up (unfortunately these payments always hit me at the worst times in college). Had I not had either of those two factors, my loan debt would have been $59,900 when I finally started repayment.

So how have I gone about tackling this $54,800 debt? Being honest, it hasn’t been perfectly approached at all times but after a few initial mistakes I’ve come up with a plan and am paying it off as quickly as I can.

my student loan journey 2.jpgMaking mistakes early on

During my grace period of six months between graduation and my first payments becoming due, I had saved up a little money working two part-time jobs, but I never put anything toward my loans. As my grace period ended, I was able to get a full-time job along with working ten or so hours a week on the side.

So in November my repayment officially began. I had always heard people say “If you can afford to pay a little extra on your student loans, you should do it”. Getting rid of my student loans was a priority for me, so even though I wasn’t exactly swimming in money I paid extra on my loans. If my payment was $115 for a loan, I’d pay $150. The problem is that my approach of paying a little extra on every loan per month was one of the least efficient ways possible.

Pay more on loans with higher interest rates

What I should have been doing was approaching my repayment with a real plan rather than just tossing a few extra bucks at it.

I learned about the avalanche and snowball debt payment methods from some friends and after some research realized I could take my loans head-on with a plan. I started paying the minimum on every one of my loans except the one with the highest interest rate where I put all that extra money I had previously spread out between the other loans.

Using this avalanche method, I paid on the highest interest loan and then when that was finished up I took that money and started paying it to the next highest interest loan. This approach helps me pay the least amount of total interest possible.

Understand options & repayment plans

Despite the fact that I’ve been able to meet my monthly loan payments, I realized decided to enroll in an income based repayment plan. This brought my monthly payments on my federal loans down from over $300 to around $70 each month. Why did I choose an income based repayment plan when I wasn’t having troubles making my repayment? I found out that having a lower amount due each month could both help my repayment plan and allow me to be more flexible in my finances.

For my repayment, it allowed me to pay less on several of my loans and kept interest from my subsidized loans from accruing (the interest can be covered for up to three years). I took the $230 I wasn’t obligated to pay to all of my loans and rolled it into the extra I had already been putting toward my highest interest loan.

The other perk was that it gave me a lot more financial flexibility, so if unexpected events popped up I could just pay the minimum on my loans and use the money I would have paid to cover whatever emergency happened.

Luckily I never ended up needing this and I have been able to double down on my avalanche repayment and target my highest interest loan with the money I would have been paying otherwise been spreading out to my other loans.

Make payments right away… or make them automatic

Before I started making my loan payments, I felt like I was making just enough money to get by. I didn’t believe I could find $600 per month just for student loans, let alone money to pay ahead. The secret that I found was to make my student loan payments right away once I got paid. Rather than having to worry about what is left to make my loan payments, I prioritized them and made the extra payments part of my mandatory bill paying routine at the beginning of each month. I also found out that one of my private loans and my federal loans offered a small interest rate reduction for enrolling in automatic payments, which I promptly enrolled in to reduce the total interest I would pay over the loans’ lifetimes.

Roll over other debts

During my first year and a half of repayment, two things events had an effect on my debt: my college beater Jeep died on my commute to work forcing me to buy a different vehicle, and I got proposed to my then-girlfriend, now wife. This gave me another $450 per month in payments to make between the car and ring. This squeezed my personal budget to as thin as it could possibly get, but I still made sure to prioritize getting these payments in right away after getting paid. I realized I that I could make this new budget work, so after paying both off I took $350 of that and rolled it into my student loan payments helping me accelerate my impending pay-off even further.

Where I’m at Today

As of this moment, I still have $42,246.38 left to go. I’ve made great progress but I’m still paying over $200 every month on interest alone. It can be depressing to realize how much I’m losing every month to interest, but I know that my current life wouldn’t be possible without the degree I earned and the experiences I had. Rather than concentrating on how far I have to go, I prefer to reflect on how amazing it feels to know that I’ve paid my loans down more than $12,500 in student loan debt in 27 months in addition to over $9,000 between my car and wife’s engagement ring. The end might not be near but that doesn’t stop me from taking one step at a time toward being student debt free.

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