Someone Call A Mechanic! $45,645.72 Paid, $39,662.35 Till Pay Off

College Years & 1985 Chevrolet Cavalier:

Ugh. Car problems are the absolute worst! They always happen at the most inopportune times.  My wife and I usually buy cash cars in effort to keep costs low. However, cash cars aren’t usually in the best shape.

My car issues began while in college, from 2004-2010 including graduate school.  At the time, I owned a 1985 Chevrolet Cavalier.  As shown to the left, is an actual picture a college buddy took of it.  I remember him telling me my car was cool lol.  Thanks for those kind words man, I never forgot them.

My wife who was my girlfriend then, owned a 1990 Honda Accord. To say the least, we both drove cars no one would be caught dead in.

Driving a car as old as me during my formative years definitely repelled the ladies lol. However, my car did attract the girl who didn’t mind being seen with me in it. I call that old Chevrolet Cavalier my “Wifey Magnet” haha.

Getting an Upgrade:

Anyways, I traded the Cavalier in for a 2002 Ford Explorer Sport in 2010. We then bought a 2003 Honda Accord in 2015. We were happy giving our “new” cars extra tender loving care. Despite our best efforts in keeping our cars maintained, both cars decided to give up the ghost the same day in September.

The Ford became impossible to turn due to problems with ball joints and steering rod. My poor wife knew of the issues a few days before, but decided it best to wait on telling me. At the time, we were battling incessant oil leaks with the Honda caused by a shady mechanic. In the end, the Honda’s engine started to make grinding noises due to lack of engine oil.

Enough is Enough:

Finally, I had enough with our car problems. We went to a car dealership and pulled the trigger to finance cars. The intent was to find cars: 1) manufactured in this decade and 2) low mileage.

I honestly feared financing a car, but truth be told, my monthly payment is about the same as I paid to maintain the Ford and Honda. It’s funny how my car loan’s interest rate is lower than my student loan interest rates of 3.03%-6.8%. Anywhoo…

Still Pushing Forward:

Although student loans have been the bane of my existence, they have enforced discipline in the areas of budgeting and saving. Besides car issues, it has been another great year for student loan repayment. I am thankful for the progress made in tackling this $85,308.06 monster.

Below is a running total of loan amounts. How are you guys doing? What goals have you made progress on this year? Until next time everyone, stay focused.

 

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Good News!: $44,685.55 Paid, $40,621.52 Till Paid Off.

Hi everyone!

It has been a busy summer and fall is upon us. Lots has happened since June, so let’s dive in. After coming home from work one evening in August, my wife greeted me with two pieces of mail from Nelnet. My immediate response was to shake my head and groan, “What’s wrong now?”

In years past, receiving mail from a loan servicer meant one of the following frustrations occurred: 1. The servicer had not received a payment. 2. Interest accrued on a loan account; or 3. A loan account was transferred to another servicer.

After staring in space for a while, I reluctantly tore open the first envelope. I have included a picture of the letter below, click to enlarge if you wish.

In summary, the letter says that ACS owes me .01 and the student loan will be transferred to Nelnet. Yippee! ACS owes me a penny, thanks for the mini heart attack.

My interest is piqued at this point, I ripped apart the second envelop and expected to be another penny richer. To my surprise the second letter informed me that another loan was transferred from ACS to Nelnet, and I am owed $225!


Out of all the loan servicers I’ve worked with (University Accounting Services, Brazos, Fedloan, Nelnet, and ACS), ACS made the repayment process most difficult. Tax and income-based repayment paperwork always seemed to get lost with them.

So that’s my good news everyone! I am $225 closer to reaching my goal of repaying my student loans. Check out the updates below.

September Update2

Now I only have 2 loan servicers to keep up with.  Until next time everyone, fight on and keep my hometown Houston in prayers!

Goodbye 2016, Hello 2017: $40,291.38 Paid, $45,016.89 Till Pay Off

Major Life Events

Since last post, two major life events happened: 1) my wife finished her graduate program, and 2) my Perkins Loan was paid in full. To aid in paying student loans faster, I’ve accepted an extra adjunct teaching position. Below is a loan amount update from my NSLDS (National Student Loan Data System) account.  Click on the image for a larger view.

nslds

 

Everything has gone according to plan until I got some bad news from ACS. When I logged into my account, I was greeted by the following image.

acs

Yes, you read that correctly. On the right-hand side of the image reads “Soon to be: Conduent”.

ACS has been the bane of my existence since graduating college.  This company makes the repayment process convoluted by closing and transferring loan accounts at a whim without notice. ACS has delayed adjusting my principal and falsely reported my account as delinquent 3 years ago. These discrepancies would occur even after paying double the monthly payments.

Mortgage Loans & Student Loans

I recently watched the movie, The Big Short. It tells the story of Michael Burry, a board certified medical doctor turned hedge fund manager. Michael essentially predicts the financial meltdown due to the subprime mortgage crisis of 2008. Prior to the collapse, global sentiment to lending money to Americans was positive.

What happened in 2008 with subprime mortgages is reminiscent to what’s happening now with student loans. Many companies once saw student loans as a guaranteed route to increased profits, just like banks viewed mortgage loans. With the closures of for-profit schools and cancellations of debt, organizations are being more cautious with student loan offers.  Sadly, the damage has already been done: outstanding student loan debt is the second highest U.S. debt burden at $1.2 trillion.

Pieces of Advice

Like many of you reading, student loans were a necessity for me to pay for college– but if you must borrow, keep track of what’s owed and to whom.  One important detail left out of promissory notes is that your lender can sell and transfer portions of your loan amounts. Think of your student loans as a single piece of tissue paper. When you first start out, it’s typically one easily traceable amount with one company.  Over time, what often happens is your pretty little paper gets cut into pieces, over and over again.  Before you know it, your loan amount has become confetti, spread across different entities, in different amounts, and of course… with different website logins to remember.

Even in the face of “loan confetti”, I’m making it my party by paying these babies off. What helps is frequently checking your nslds.gov and studentloans.gov accounts. These websites give you running totals on what you owe, as well as contact numbers if you experience difficulty in repayment. I must admit to reviewing my loan accounts daily– once in the morning and once more at the end of the day. It’s simply part of my routine.

My 2017 Resolution

I will keep my eyes on the prize of one day seeing my loan balance reading $0.00. My 2017 resolution is a prayer for improved leadership skills and good stewardship of resources given to me. Here’s an excerpt from an excel spreadsheet detailing the loan accounts.

loan-accounts

Look there! You see that? It’s progress. No matter how big or small, I’m happy with simply giving my absolute best in this thing called life.

Share some of your resolutions for this year below- here’s hoping we achieve a few!

The Sacrifice of a Father: $37,197.54 Paid, $48,110.53 Till Pay Off

Why So Happy?
Waking up Monday mornings is always a drudgery for our house. But this Monday morning, as I groggily walked to the restroom to wash my face, my wife wore a beaming smile and greeted me cheerily. Her greeting was contrastingly returned with a slowly motioned wave and mummified growl, “Morning.”

Baby PicDespite my groggy state, I couldn’t help but be suspicious about her extra energy boost. While reaching for a washcloth, in the corner of my eye, was a pregnancy test leaning against the wall. I tried to delete the image of the pregnancy test to shield myself from fear and pain.

My wife and I have been married for 5 years and were coming to terms with the possibility of never being able to conceive. I assumed the pregnancy test would read negative, but out of hope, I took a peek at it anyway.

To my amazement and disbelief the test read positive. Then I thought, wait, this is an April Fools’ joke, why would she do something so mean? But this was in November, April was 5 months away. Then my attention was drawn to sticky notes my wife placed above the pregnancy test where she wrote, “We prayed and God answered.”

Still half-conscious, it clicked.
“Wait… we’re pregnant?!”
Almost instantly, the sleep fell from my eyes.
She grabbed my hands and excitedly screamed, “Yes, we’re pregnant!”
I can’t explain the joy in knowing that my little girl will be here in August; I feel alive again!

Sacrifices of Parenthood
Once the initial elation surrounding my little girl’s arrival wore off, the reality of newfound responsibilities rose to the surface. We will lose sleep, time, and maybe even some friends. And of course, as we all know, raising a child can come with a considerable price tag. Half of me is joyful in anticipation of my child’s arrival, and the other half is anxious. I still have student loan debt to repay and sometimes wonder if waiting longer before starting a family was the better option.
But I am proud to have the opportunity and privilege to raise a child.
Fatherhood is the best gift imaginable, especially since for us, the seemingly impossible became possible. Two little eyes will be looking to me with love every day from this point on, and a little mouth will call me “dada”. Why would I not want the gift I have been given after being blessed with it?

With that in mind, I now prioritize savings over debt reduction in anticipation of the costs of raising a child as well as any birthing complications. Although I want to get rid of student loan debt faster, it would be a pity not to provide for my family first.

New Debt Payment Plan
My student loan accounts are paid bi-weekly, totaling initially $425.51 every two weeks as shown below. I have since reduced the amounts made on the debt to an updated amount of $248.76.

Bi-Weekly Payments2

The principal paid bi-weekly has decreased from approximately $304.99 to $137.31, due to reduction in repayment. It’s a little disheartening to see my momentum slow a bit; but one thing’s for sure, my debt is decreasing.

Bi-Weekly Principal Payment 2

What matters most is my beautiful wife and daughter are healthy and strong.
For all the parents out there, how have you tackled the financial responsibilities of student loan debt and parenthood?

Until next time folks, fight on.

Almost Halfway Home: $36,487.04 Paid, $48,821.03 Till Pay Off

I am finally “under the hill”–I now owe less than $50,000 in student loans!  Bring out the bubbly!

Here’s a snapshot of my current loan accounts:

4-6-16 Updatechampagne

If you were to meet me 5 years and told me where I would be today, I would either deem you a lunatic or a liar. Because 5 years ago, my loan balance was nothing to celebrate…

Holiday Blues 2011:

My heart felt heavy with guilt and shame as I drove home from work one week before Christmas in 2011.  The holidays are some of the worst times to feel blue, especially due to job loss.  It was my third time being dismissed from work in two years.  I walked into my apartment without a word after cheerful greetings and a kiss from my wife.

Know How Much You Owe:

Thoughts rushed in at once, “Who gets fired a week before Christmas? How are you going to pay rent?” And the scary one, “How are you going to make your student loan payments?”  I can happily say it has been 4 years, 8 months since I have started this journey.  What helped reduce my student loan debt was knowing how much I owed.  It is possible to track student loan amounts using the National Student Loan Data System’s website.

Taxes & Payment Plans:

If Benjamin Franklin were alive today, his famous quote would read, “In this world nothing can be said to be certain, except death, taxes, and student loans”. Fortunately, for today’s college graduates, Income Driven Repayment plans exist to make repayment easier.

The federal government offers four repayment plans known as: Repaye, Paye, IBR and ICR. Under my current repayment plan, the first three years of interest was waived, and all payments went to principal.  To remain in one of these repayment programs, however, you must submit tax information annually (the processing of which can (surprise!) be incredibly inefficient, but I’ll save that episode for another time).  Thankfully, this documentation can be submitted electronically through Studentloans.gov.

Being enrolled in an “income-based” program made repayment possible during times of unemployment.  In addition, many are eligible to receive up to a $2,500 tax deduction.  This interest deduction has saved my wife and I lots of money, especially since she is now a full-time student.

For more details about the federal government’s income-driven repayment plans, click here.

The End In Sight:
I constantly review my repayment schedule, and in doing so, keep myself motivated as to the finite nature of this “student loan phase” of life. One of the most concrete ways to accomplish this is through using a repayment calculator. A simple, yet effective calculator can be found through FinAid.org.  The website can print a repayment schedule based on your loan amount, interest rate, and loan term. It is a tailored picture you can always revise to help envision your expected payoff date, and gives you the ability to play around with your payment budget and see the effects.

I hope this information has been helpful in providing motivation, goals, and vision.  You, too, can make progress in your repayment journey by:

1) Knowing what you owe,

2) Taking advantage of tax and repayment options, and

3) Seeing the end.

 

Feel free to post any specific questions, or additional advice you have gained on your journey, below!

Until next time, continue the fight, friends.

 

The Run-Around: $30,711.90 Paid Off, $54,596.17 Till Pay Off

Rep Wheel

The Income-Based Repayment (IBR) program has been great in aiding my student loan repayment efforts. I have been enrolled in this repayment program for 4 years now. So I was ecstatic to receive mailed notice on Friday, March 27, 2015 of my approved Income-Based Repayment application.

Then on April 20th another notification arrived stating the servicer had not received an updated IBR application. To add insult to injury, my new monthly payment would be $301.99, an increase from $152.02. OUCH! So for three straight days I called customer service rep after another to get this straighten out. At the time I felt my servicer was performing their own rendition of Blues Traveler’s hit song “Run-Around”.

At the moment I am laughing to prevent myself from frustration. This is the same company (whom I will not name) magically added $600 to my account balance last year and thought I wouldn’t notice.

Another issue I have with this loan servicer is their slow process in updating account information. My total monthly interest is $72.13, I pay $135 bi-weekly for a total of $270 a month. So why am I being charged $110 in interest? Each time I’ve requested to speak with a supervisor or an account manager I am asked to be placed on a “brief hold”. These holds typically last for 30 minutes.

As of today 8/4/15, my servicer has yet to correct my account information. Through this I remain focused on my goal of paying what I owe in full. But in the meantime, I need to contact the Federal Student Aid Ombudsman. An ombudsman is an individual or group appointed by the government who helps resolves disputes. The ombudsman can oversee disputes within private companies, universities and non-profit organizations.

If you are having problems with your loan servicer like me, contact the U.S. Department of Education Ombudsman Group via the info provided below:

Postal Mail:

U.S. Department of Education
FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144
Phone 1-877-557-2575
Fax 202-275-0549

Website:

FSA Ombudsman Group

Lesson learned, keep record of all paper and electronic correspondence with your servicer. If I hadn’t, this blog post would read differently. The next post will be titled, “To Move or Not to Move? That is the Question”.