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.

Where, Exactly, Did All of That Student Loan Money Go?

You would probably be amazed how many times there are thoughts that I have in my head that I know I want to translate into entries on this blog, but never have the time (or memory) to get down on paper (or the electronic equivalent). That’s probably why I usually have so many half-finished entries in the “Drafts” folder of this blog – because I’ll start writing an entry and then not finish it in a timely manner since the thought that would finish the entry comes too late or when I’m not near a computer. For example, a few months ago I wrote about what I would have done with all of the money that I spent on student loans if I didn’t have to send it off to the loan companies and the government. Well, in the week since I wrote that entry I realized that I forgot to add a small addendum at the end of the post talking about where all of that money went.

And thus we have this entry. :-)

Like the title of this entry says – where, exactly, did all of that student loan money go? There are a few ways to answer this question so I’m going to compartmentalize the response as best as I can. To answer this question one first has to understand that the money that I paid in student loans has been sent to four primary lenders: Monmouth University (MU), CitiBank, the New Jersey Higher Education Student Assistance Authority (NJHESAA), and the United States Department of Education (USED). With respect to the USED, the Department recently sold my loan to the Missouri Higher Education Loan Authority (MOHELA), so when I write about them I’ll reference MOHELA.

Monmouth University – Perkins Loan
This is the easiest one for me to discuss. Many years ago when I was an undergraduate attending MU I received a Perkins loan from the university. Perkins loans are provided by the government and can be offered from the university to help finance the cost of education. The university advanced a $1,400 Perkins loan which I repaid very soon after graduating in May 2003 (I can’t remember the date, but it was within the first 12 months of graduating; possibly within the first 3 – 6 months).

Where did that student loan money go? Well, the Perkins loan program is arranged to be a revolving loan fund at each university, so the money I repaid to MU was ultimately used to provide loans to other eligible students. And that’s not such a bad outcome for repaying this small student loan.

CitiBank – CitiAssist Graduate Loan
This was a private student loan that I took out from CitiBank while I was attending the Bloustein School of Planning and Public Policy at Rutgers University. In truth, I didn’t use all of these funds for tuition expenses. As I recall, I used the majority of these funds to pay for one semester of graduate classes at Rutgers and then used the balance to pay some living expenses as well as to purchase some textbooks.

Where did this student loan money go after I repaid it? This one is simple – the loan was a private loan fully-backed by the federal government so a full one hundred percent of the funds were returned to CitiBank. That includes the full $7,000 that I paid in principal as well as the $1,071.52 that I paid in interest. All of that interest money is profit to CitiBank that probably went towards paying someone’s salary or other forms of compensation (i.e. bonuses). Congratulations, CitiBank – you achieved a 15.3% return on your investment in me!

New Jersey Higher Education Student Assistance Authority (NJHESAA) – NJCLASS Loans
Is there anyone else out there on the internet who has blogged more about the NJHESAA organization than I have on this blog? I know that there are thousands of similar-minded current and former borrowers out there who are frustrated with the way that this organization treats its clients. To be fair, though, I haven’t been a client of this group for a few years now and I hope that they have learned from having their terrible customer service reported around the internet. In any event, I covered my relationship with this group quite a bit on this blog, not the least of which was a post I created on my final payment to the company, which you can read by clicking here.

With respect to where that student loan money went, it broke out as $40,095 repaid in student loan principal, $24,251.61 paid in interest, and $1,893.69 paid in fees. That’s a total of $66,240.30. The interest and fees were all profit to the NJHESAA organization so they could have used that money for whatever they wanted. As I understand it, the principal for the NJCLASS loan program while I was utilizing it was generating from the sale of tax-exempt bonds. So, one would hope that the principal I paid to NJHESAA was used to repay their bond financing, but who knows? What I DO know is that NJHESAA not only made all of its principal back off of my loan, but it made a 65% gain from interest and fees (because, you know, I didn’t need that to buy a house or a car or anything).

United States Department of Education (USED) – Direct Loan
This one is interesting and it’s not a loan that I’m fully ready to discuss or breakout yet. Part of that reason is because the USED sold my loan to the Missouri Higher Education Loan Authority (MOHELA; the Missouri equivalent of NJHESAA). I didn’t ask for that loan to be sold, I didn’t want that loan to be sold, and I’m not happy that the loan was sold. I wanted to finish up repaying this loan to the organization that originally advanced it to me – the USED. However, I was repaying the loan so quickly that the USED considered me a strong investment and sold my loan to a private loan company. Wonderful.

My early figures show that I took out $57,575 in USED principal, capitalized some $1,445.15 in interest, and paid $205.04 in consolidation fees. Those numbers aren’t worth talking about, though, since I’ve paid an incredibly amount of interest since this loan started and that figure isn’t captured anywhere. Plus, this loan will ultimately have to be broken out between both the USED and MOHELA.

What a pain in the ass.

Anyway, there are some figures for you – where did my student loan money go? Well, the one thing that we know for sure is that it didn’t go towards building the economy and it mostly did not go towards helping other higher education students achieve their academic goals. What a wonderful waste of money and, more importantly to me, my time.

The Latest and Greatest with My NJHESAA Loan

Ah yes… Time once again to take a quick look at my student loan for the New Jersey Higher Education Student Assistance Authority. This loan aggravates me for a variety of reasons (which I’ll state below). I am pleased to announce, though, that I’ve made somewhat significant progress in paying down this loan to a less unruly level than when my repayment began. Since I began repaying the loan, I’ve reduced the principal due by a few thousand dollars, which is pretty good considering the interest rate.

Anyway, some things about this loan just make me (and thousands of others, I’m sure) mad:

  • Interest Rate: I’m paying some 7.33% interest on my NJCLASS loan. That’s just too high of an interest rate for a borrower like me, who has an 800 credit rating. For comparison’s sake, my Direct Loan from the federal government has a 4.25% interest rate – much more acceptable.
  • No Online Payment: I’m not sure how, in the year 2009, NJHESAA does not have an online repayment option. That’s crazy. When I graduated from Rutgers with my Masters Degree I had three student loans. One of them was to CitiBank. I was able to pay back the entire CitiBank loan (which was probably $8,000+) in less than a year because of the online payment options. NJHESAA is really missing out on getting an extra $50 here or $250 there in online payments. Either that, or they’ve strategically opted to not have an online payment gateway.
  • Balance Inquiries: In a related point, the NJHESAA has no active online resources for borrowers in repayment. In other words, I can’t log-on to their website and check my balance or see my previous payment history. All of this is available with the federal government’s Direct Loans program.
  • You’re Stuck: However, one of the most aggravating parts of the NJCLASS repayment is that you’re stuck with NJHESAA. I can go out and find better repayment terms from another lender, but I would not be able to pursue the improved terms without NJHESAA approving me taking out their entire loan. Let me rephrase that so everyone understands… I can go to Bank of America and get approved for a 4.5% loan specifically to repay my NJHESAA loan. However, I cannot repay my NJHESAA loan in full by switching to Bank of America without NJHESAA’s approval to do so. Talk about dealing in a fair marketplace…

One of the things that really irks me about this loan, though, is more of a historical aggravation in that NJHESAA once reported me to the credit bureaus as having paid 30 or 60 days late…while the loan was still being deferred because I was still in school! Talk about complete insanity!? And when I called them up to complain, they said that while they agreed that the report to the credit bureaus was an error on their part, there was nothing they could do about it. This negatively affected both my credit score and my Mother’s credit score since she was a co-signer at the time. Bear in mind that both my Mom and I have never made a late payment on any account at any point in time ever. Thankfully, I’ve disputed NJHESAA’s erroneous report with all three credit bureaus and they’ve removed the late payment error.

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While the entire student loan industry needs a vast amount of reform, at this point I’d settle for a company like NJHESAA getting itself into the 21st Century with an online payment and loan balance/information portal!

Rejuvenating Powers of Volunteer Work

During the month of January, I found myself getting more and more morose on a much more frequent basis. It was sort of scary. I’m not quite sure what brought about the brooding, ill-foreboding demeanor, but I do know that it was starting to effect my work and my personal life. Some people would assume that it’s just normal to get that way in January due to the winter doldrums. Some may speculate that I got used to being a young twenty-something and was brought down by the fact that I was turning 26 at the end of the month.

I don’t know if it was either of these things that brought me down, though turning 26 was as uneventful as it could have possibly been. Just to imagine that 5 years ago I spent my birthday night out at the bar with 20+ undergraduates and alumni from my fraternity in a drunken stupor…but I digress.

Honestly, I think that the weight of my disgusting amount of student loans finally lowered its boom on my back. Sure, I’ve been paying them back since July, but when that small CitiBank loan kicked in at the beginning of December – that was the kick in the balls that I really didn’t need. Thankfully, I’ve already paid back 25% of this smaller loan and I anticipate having it paid off by the time the summer starts (if not beforehand). Stupid small loan trying to mess with me…

However, as much as taking a financial stand against my student loans has been a positive influence in my daily life I think that my volunteer work has been a bigger pick-me-up. It started when I went out on my annual trip to St. Louis for Sigma Pi Fraternity’s Mid-Year Leadership Conference. This is an event where the new undergraduate Presidents, Treasurers, and Recruitment Chairmen are each trained on how to operate the chapter while the alumni volunteers (me) are put into a separate education track for the weekend. Not only did I get to present at this year’s workshop (my topic was how to have better workshops), but I also enjoyed hanging out at some of St. Louis’ more famous landmarks (the Arch, the Budweiser Worldwide Headquarters, Laclede’s Landing).

The best part about these fraternity events, for me at least, is that you come back from them on a natural high about life. In other words, the whole morose feeling that was bringing me down prior to the St. Louis trip was gone.

And I only bring this up because I just remembered how crappy January was and how out of place it is for January to be a bad month for me. I’m a January fan, but this year sucked. I’m glad that I had a volunteer-based weekend in St. Louis to give me a nice kick in the ass. :-)