Are You The Victim Or The Victor? The Choice Is Yours!

About two weeks ago I was at an auction with a few friends of mine – one of whom I haven’t seen in two years. During our general catching up with one another, I mentioned that I was in the process of buying a house (which is true and I have yet to cover on the blog yet – in due time). He was a bit shocked and wondered how I could buy a house when I still owed so much on my student loans. When I told him that I fully paid off my students loans this past August, he nearly fell out of his seat!

Remember when I paid off my student loans?

Remember when I paid off my student loans?

Now I’m not going to go into another discussion here about how I paid off my student loans and you can, too. Lord knows I’ve written enough about that stuff that if you really wanted to learn how I was able to pay off those loans and pay them off quickly, then you can find that information on the blog.

And yet, I was struck by my buddy’s utter shock at my having paid off my student loans. And this had me thinking about something for the rest of that night and for the days since the auction ended. Namely, there are some people in life who are victims and there are other people in life who are victors. I’m not suggesting that my buddy is a victim. In fact, he’s the furthest thing from a victim.

There are people out there, though, who look at the hand they were dealt and hang their shoulders in defeat; they essentially turn into Droopy. They may as well turn around and ask everyone to go ahead and kick them in the ass. That’s the victim mindset. That’s the mindset that takes whatever the world gives you and says, “Oh, I was hoping for something better. But okay. I guess this will do.”

It won’t do, damn it! Be a victor! Be someone who makes their own way on this planet. If you don’t like the hand that you’re dealt, then get a new hand. If you don’t like the new hand, then stop playing that game and get up and make something else of your life! We are all the end result of the various choices that we make – choose to be a victor. Choose to be the person with their hand raised at the end of the fight. Choose to win!

I’ll be the first to admit that I’ve made many mistakes and I’ve not always made the choices that led me to be the victor at the end of a particular fight. But when it came to student loans I made a conscious decision that I was winning this fight. In fact, I made the decision that I wasn’t just going to be the victor, I was going to be the conqueror! And I was…

Throw your excuses to the side and make this world your own. Be a victor – the choice is yours!

The Major Connections Between Psychology And Paying Off Debt

Recently, the FOX Business website posted an article called The Psychological Perks of Paying Off Debt. As a guy who just finished a long-term repayment plan that ended in fully repaying some $121,000 in student loan debt plus another $28,000 in interest, I was obviously interested in reading this article! Of course, not much of the information in the article was new to me, but it was reassuring to read that the way I’ve always interpreted what that immense amount of student loan debt was doing to my physically and mentally is actually true and not just my machinations. Here are some of the interesting quotes from the article that I wanted to share:

“Getting into debt beyond means of repayment” is ranked No. 5 on the Society of Occupational Medicine’s 2001 “Life Events Inventory,” which ranks the psychosocial stress of 100 life events. “Stress is one of the drivers for health conditions related to cardiovascular disease, allergies, diabetes (and) gastrointestinal disorders,” says [Carole] Stovall. That’s why paying off debt can result in physical healing. “When people pay off debt, they’re going to say ‘My stomach feels better, my heart feels better,'” says Stovall.

Regardless of what my doctor thinks is going on with my body, I’m convinced that my enjoying my return to the gym is directly related to not having a six-figure cloud hanging over my head. Now I workout not just because I need to for my health, but because I actually enjoy the entire working out process. It’s fun!

Eliminating debt is more than just a numbers game. It’s an act of breaking free from difficult past experiences. Debt associated with rough events — such as divorce or a reckless phase in life — is painful to carry around. So when you finally cut that debt from your life, you’ll likely “experience tremendous emotional liberation,” says Dallas-based financial adviser Derrick Kinney.

I guess I’m not the best person to make a comment on this particular outcome of paying off your debt because I don’t really carry around any emotional baggage. How this particular blurb translates to my life is that I can now actively plan and work towards achieving certain life goals that I should have achieved 6 – 8 years ago (for example, buying a permanent residence, building a sufficient retirement fund, and fully funding a just in case savings account). The article actually talks about these types of life goals in the context of buying a house and starting a family, so if you click on the link at the top of this entry, then you can read their take on achieving major life goals for yourself.

When you pay off a big debt, you strengthen your resolve to stay financially solvent. That comes with one important caveat: Your ability to stay out of debt likely depends on how you paid off your debt, says [Derrick] Kinney. If you worked hard to steadily pay off your debt, you likely have practiced discipline to keep your finances in check going forward.

Not only did I work hard to steadily pay off my debt, but I worked hard for years on end to pay off that debt! Even though I had a strong work ethic heading into my major repayment all of those years ago, there is no doubt that my work ethic and determination were both honed during this process. By adding precision to determination I believe I’ve developed a dangerous calculus for those obstacles that may get in my way in the future. There are a lot of ancillary skills that come along with devoting so much time and effort to a successful debt repayment – too many to list here. However, suffice to say that I agree with the point in the blurb above and I believe that my financial discipline is stronger than most individuals my age.

Click on the link above if to read more about the connection between psychology and paying off debt. Enjoy!

Finding A New Laptop Computer And Life After Student Loans

Since my last update, things have been moving at what seems like an incredible pace. As you probably guessed, life got crazy about three weeks ago when classes started up again at the local university where I serve as an adjunct professor. In addition to that part-time gig kicking in, on September 1st I also kicked in my commitment to getting back into the gym on a regular basis. Since this month began, I’ve spent every Monday, Wednesday, and Friday morning (before work!) at my local Planet Fitness. Okay, I admit that on Fridays I usually go to the gym in the afternoon and not the morning, but that’s because I work from home on Fridays and it’s just easier to go to the gym later in the day when I work from home. More on my experiences at the gym in a future entry…

However, the biggest tangible shift that I’ve experienced since my last update (which was almost one full month ago!) is the new laptop that I find myself typing this entry on. That’s right – after 7+ years as my go-to home computing machine, my HP Pavilion dv8000 finally kicked the bucket. Well, to be honest it didn’t actually kick the bucket – rather the primary hard drive started skipping and slowing down to an unacceptable pace. This is a problem that can be easily fixed by installing a new primary hard drive, but I took the failure of the primary drive as a sign… that it was time to get a new computer. And that’s just what I did! The picture below shows an incredibly bright picture of my new laptop computer – check it out:

There's my new laptop and the free tablet that came with it.

There’s my new laptop and the free tablet that came with it.

The new laptop is an HP Envy 17-j029nr Quad Edition Notebook PC and, if I’m not mistaken, this is the highest grade, pre-configured laptop that you can purchase at HP.com.

It’s a pretty bad ass machine.

There are too many bells and whistles for me to explain all of them, but they include a 24GB solid state drive dedicated solely to making start up and shut down times blazing fast (we’re talking less than 10 seconds and, in most cases, less than 5 seconds). Other cool features are the Beats Audio, the fingerprint scanning and log-in system (now I log-in to websites by swiping my finger across a reader built into my laptop), a terabyte of disk space, a fourth generation i7 processor, Windows 8, and a back-lit keyboard which makes it easy to read the letters and numbers in front of me when it gets dark around my laptop. When you add up all of the great benefits that I’m receiving by using this new laptop over the old one, the relatively few annoyances that I have with the new machine melt away. For example, I really liked the layout, size, and feel of the Pavilion’s keyboard. However, after about a week or so of using this new laptop I’m getting used to the feel and touch of the new keyboard system. Also, the left part of the keyboard on the Envy seems to dip and appears extra “soft” (which isn’t the right adjective to use, but it adequately describes that side of the keyboard). However, I really haven’t experienced any negative outcome because of this “softness,” so I’m assuming that it doesn’t really matter that much.

As a guy who knows a little something about technology – and I admit that what I know continues to decrease in an increasingly technological world – I’m very impressed with this system. And I’m glad that I bit the bullet and purchased the pre-configured system instead of building my own. This configuration is the one that HP knows, trusts, and manufactures in mass quantities. They obviously chose this configuration for a reason and the expertise of their design team is fine for me! Also, as an older “tech head” I tend to suffer from analysis paralysis when it comes to buying a new system. If you haven’t heard of analysis paralysis, then you should know that it basically means I analyze and consider different purchase options until I eventually convince myself that I don’t want to be the guy purchasing the system that is either already obsolete or will be obsolete within days or weeks of my purchase. I managed to get over that perspective when buying this laptop and it was absolutely the right thing to do.

Two final points…

First, I don’t think that I’m done with the old HP Pavilion laptop just yet. The thing just needs a new primary hard drive and it’ll work fine. I can purchase a new primary hard drive and install it fairly easily. The issue will be kicking the internal backup drive into gear – if that can even be done. My purpose for doing that would be to transform the old laptop into a media hub for my television. Of course, this will all be easier to do and make much more sense once I purchase my own home and I have a living room that I’m setting up, but one thing at a time right now!

And on that note… second, it is really nice to not have the weight of student loans hanging over my head when situations like these come up. I use my laptop on a daily basis not just to browse the internet, but to manage the two small businesses that I own. I also use my laptop on a daily basis to manage my online presence for the classes that I teach and the one that I’m taking. Plus, my laptop allows me to work from home one day each week. So you can see what type of a crisis it is when I don’t have a laptop that is functioning. Before I repaid my student loans, this crisis would still be going on because I wouldn’t have been able to purchase a new laptop right away. However, with the student loans gone and no longer hanging over my head – I was able to purchase a new laptop (and a top-of-the-line one at that) without any problems.

The moral of the story is that being student loan free and facing a crisis isn’t a major problem any more.

After All Of These Years, This Is What The Finish Line Looks Like

Thank you all so much for the kind words and praise that you’ve sent me via text messages, Facebook comments, Facebook messages, e-mails, discussions on your blogs, and phone calls over the last few days. Since I posted that my student loans were officially repaid, I’ve been reminded what a great group of people that I’m lucky enough to call my family and friends (both old and new). During the online celebration, some of you asked whether I had official confirmation on my payment being received and processed by the student loan company. On Monday, the answer was “no” because it takes a few days for the payment to show up on MOHELA’s website. However, today I’m proud to share the screenshot of the zero balance due on my loan. Take a look:

And that's the end of my student loans.

And that’s the end of my student loans.

And not only is there nothing due on the loan, but it looks like MOHELA actually owes me 15 cents! Ha ha!

In July 2006 I began repaying $120,603.31 in student loan debt. This debt was comprised of $106,070.00 in loan principal, $12,434.58 in capitalized interest, and $2,098.73 in closing and refinancing fees. I made the final payment on this debt in August 2013. My lenders included the United States Department of Education’s (USED) Perkins loan program, the USED’s subsidized and unsubsidized Direct Loan programs, the New Jersey Higher Education Student Assistance Authority’s NJCLASS program, CitiBank, and the Missouri Higher Education Loan Authority (the USED sold my loan to MOHELA in April 2012). In total, I paid $149,455.12 to these lenders including $120,603.31 in consolidated principal and $28,851.81 in interest. You can read my entire student loan repayment story on JerseySmarts.com.

Major Student Loan Announcement: My Student Loans Are Fully Repaid!

When I was interviewed by USA Today about my student loan debt back in June 2006, I was so unsure of my financial position that I couldn’t even give them the correct total for my loans. That article cites a total of $116 thousand worth of student loans; believe it or not, I was about $5 thousand too low. All I was sure of was that I owed a substantial amount of money and it seemed there was no way to quickly repay the loans.

Before I started an aggressive repayment plan in December 2009 it seemed like today would be impossible to realize. Think about the situation that I was faced with (and remember that many current large dollar student loan borrowers are still in similar situations): How could a guy manage to repay approximately $121 thousand in student loan debt with a bachelor’s degree in English and a master’s degree in Public Policy? Further, how could a guy repay such an astronomical figure much quicker than the 25 and 30 year repayment plans his lenders put him on? Worse yet, how could anyone who worked at a nonprofit organization, did not rely on outside financial support, did not live at home, paid all of their own bills (on-time), lived in the most expensive state in the union, and who felt a moral obligation to annually donate at least 10% of his income achieve this goal? To say that the odds were against this day coming as soon as it did is an understatement! This goal was nearly impossible for anyone to achieve.

It's over!

And yet this day still arrived. As of this morning, my student loans are fully repaid. No more principal balance to report. No more interest versus principal calculations to make with each payment. No more wondering how much longer I’m going to make $2,500 per month payments (this was the amount of my average monthly payment in 2013). That’s $2,500 each month that I can now use towards what it should have been used for since July 2006: saving for retirement, investing in the market, investing in my continued professional and academic development, and purchasing a permanent residence.

During my last “major announcement” post back in December 2010 I happily reported that I was done repaying the New Jersey Higher Education Student Assistance Authority (NJHESAA). The NJHESAA’s series of smaller NJCLASS loans were – after consolidation – one of the two major student loans that I was obligated to repay after graduating from a master’s degree program at Rutgers back in 2006. The other major series of smaller loans – also consolidated into a single loan – were from the United States Department of Education (USED) and their Direct Loans program. Ultimately, the USED sold my loan to the Missouri Higher Education Loan Authority (MOHELA) – the lender that received my final payment earlier today.

I also had loans from two smaller sources including $1,400 from the USED’s federal Perkins loan program through Monmouth University and $7,000 (plus an additional $1,071.52 in interest) from Citibank’s student loan program.

Just as I reported after paying off my NJHESAA loan, here are the stats as they pertain to repaying my USED/MOHELA loan (these figures include both the amount of the loan and the capitalized interest; also, these are my figures and may be a few pennies or a dollar or two off from what the USED/MOHELA keeps on file).

Freshman Year of College (1999 – 2000): $2,639.27
Sophomore Year of College (2000 – 2001): $3,518.71
Junior Year of College (2001 – 2002): $5,529.88
Summer Session (2002): $0.00
Senior Year of College (2002 – 2003): $5,529.86
Undecided Graduate Semester (Fall 2003): $9,759.06
Part-Time Graduate Semester (Spring 2004): $0.00
Graduate Year One (2004 – 2005): $19,156.45
Summer Session (2005): $6,852.91
Graduate Year Two (2005 – 2006): $6,034.01
Total USED Debt at Consolidation (Plus $205.04 Refinancing Fee): $59,020.15

Total Principal Paid During the Life of the Loan: $57,575.00
Total Interest Paid During the Life of the Loan (Includes Capitalized Interest): $1,445.15 + $14,518.11
Total Fees Paid During the Life of the Loan: $205.04

Total Amount Repaid: $73,743.30

The list above shows the various USED loans that I consolidated into the final $59,020.15 loan that I began repaying in 2006. If you study that list above, there are three lines that will probably bounce out and hit you – my summer session in 2002, my part-time graduate semester in 2004, and my first year in graduate school as a full-time student in 2004 – 2005. The first two of these line items probably stand out because I did not incur any USED loans during those semesters. Why didn’t I take out any loans, you ask? Simple. As an undergraduate, the USED would not advance me any loans if I was a part-time student – that eliminated me from potentially getting a loan during the summer of 2002 (I made up the difference from NJHESAA that summer). And in the spring of 2004 I was still deciding if I wanted to apply to the Rutgers graduate program where I was a non matriculated student. Again, being a part-time student didn’t allow me to take out any loans from the USED.

Of course, I did wind up applying to the Rutgers program on a full-time basis and that first full-time year of graduate school is the other line item that stands out in the list above. This line item stands out because it is so much higher than the rest of the line items at a whopping $19,156.45. What in the world could I need that much money for in a student loan?! Again, the answer is somewhat simple: somewhere along the line I figured out that the USED would advance loan funds to pay for my “living expenses” while I was going to school full-time.

If there is one thing that I can point to that inflated my total student loan debt more than anything else it would be the ability to add my “living expenses” to my student loan requests. Even though I worked part-time at two different jobs during my undergraduate years and full-time during my graduate years (in addition to owning and operating a small business), I still included my living expenses in my student loan requests. Those living expenses including my monthly rent payments, cell phone payments, food money, automobile payments, and Lord knows what else. Unfortunately, I can’t tell you the exact amount of my student loans were allocated to these living expenses, but let me put it in perspective this way…

Pretty much all of the tuition I was charged during graduate school was paid either by me, my family, or scholarships. You read that correctly – I did not need to take out student loans to pay for my tuition at Rutgers. In other words, if you look at the list above and add up the line items titled Graduate Year One (2004 – 2005), Summer Session (2005), and Graduate Year Two (2005 – 2006), then you’ll have the total dollar amount of student loans that I requested for reasons other than tuition. After doing the math, you can see that this amount equals $32,043.37. Just to be clear, of the $120,720 that I took out in student loans, at least $32,043.37 were for expenses other than tuition. I won’t set this number in stone as the definitive total amount of loan funds that I received for non-tuition expenses because I also applied for and received living expenses (primarily rent costs) from the NJHESAA’s NJCLASS program, too.

However, to estimate that approximately a third ($40,420) of my total student loan debt was for living expenses and not tuition would be a pretty good guess. Pretty frightening, I know.

And yet today still arrived. From an above-the-fold cover story in USA Today in June 2006 to fully repaying my NJHESAA loan in December 2010, to a nice mention in an online story on USA Today in May 2011, to the milestone of having repaid $100,000 in principal, to today – it’s been an incredible ride. If you’ve been following my student loan story from the beginning, then I offer my heartfelt thanks for your patronage and willingness to read my repayment story to the end. For those of you who have added comments to these blog entries from time to time, I thank you for being a part of the conversation. If you’re one of the many folks who’ve e-mailed me saying that I inspired you to take a more aggressive stance in your own student loan repayment, then I wish you luck.

Quickly and efficiently repaying a student loan is possible; even if that student loan is $120,603.31 on day one and you wind up paying an additional $28,851.81 in interest over the life of your repayment. The great truth that I learned over these past few years is that if you want to do something, then you will find a way to achieve it. In other words, no one can stop you – except you.

And if you’re trying to repay an enormous student loan, then contact me and share your story. Good luck!

In July 2006 I began repaying $120,603.31 in student loan debt. This debt was comprised of $106,070.00 in loan principal, $12,434.58 in capitalized interest, and $2,098.73 in closing and refinancing fees. I made the final payment on this debt in August 2013. My lenders included the United States Department of Education’s (USED) Perkins loan program, the USED’s subsidized and unsubsidized Direct Loan programs, the New Jersey Higher Education Student Assistance Authority’s NJCLASS program, CitiBank, and the Missouri Higher Education Loan Authority (the USED sold my loan to MOHELA in April 2012). In total, I paid $149,455.12 to these lenders including $120,603.31 in consolidated principal and $28,851.81 in interest. You can read my entire student loan repayment story on JerseySmarts.com.