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.

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!

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).

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.

A screenshot of the confirmation page from my last student loan payment ever!

Setting up that payment for August 19th felt pretty good. Granted, I probably won’t be able to make any big announcement about my loans being fully repaid until a few days after August 19th, but now I know that this repayment is really just days away from being over. And it feels pretty good!

It reminds me of when I sent the last check to the New Jersey Higher Education Student Assistance Authority. Of course that feeling of relief was intertwined with the joy of no longer having to deal with rude, arrogant people at NJHESAA. I’ve never had a problem with MOHELA or the USED before they sold my loan. It was a pleasant experience. You know, “pleasant” in that the people were good to work with and responsive on the phone and via e-mail. I mean I could use all of that money that I paid in student loans if the government wants to give it back!

On the flip side, the New Jersey Higher Education Student Assistance Authority was a miserable service provider. In almost every aspect of the borrower-lender relationship, the NJHESAA failed. And according to the comments on this blog, the NJHESAA failed many other borrowers, too.

As I begin to wind down my student loan repayments, today I’d like to bring to you the story of another college graduate saddled with a large student loan debt. In particular, I’d like to bring you the story of Jennifer and the $27,000 that she owes to NJHESAA. The story below is the exchange that Jennifer and I had over e-mail and please understand that names have been changed to protect the innocent (because I know there are dubious folks from quasi-state agencies who troll this blog).

Jennifer’s First E-Mail to Me:

Hi Joe!
I have just spent a good hour or two reading some of your blogs about your student loan journey. I myself have a loan through HESAA that frustrates me to no end and I was wondering if you could give me any tips? I currently owe them about 27,000 and my minimum payment is 266.00 a month. I have other student loans but they are all federal and as you know with a much lower interest rate.

So as for my HESAA loan, I have been paying $400 a month on this loan and I pay a little extra on my other student loans each month as well. I pay the most on my HESAA loan each month because it has the highest balance and interest rate. Is this a good approach or should I be doing the snow ball affect you spoke of in one of your blogs?

I pay my HESAA loan online. Do they still have a 2.5% charge that you have talked about?! If that’s the case maybe I should mail them a check?

With my other loans, I am able to see my original loan amount and payments remaining but HESAA doesn’t show this?! I have called them to have them send me something stating my original loan amount and how many payments I have remaining and they can’t seem to do this?! Also no matter how much I overpay on this loan (I have tried the bi-weekly method of paying this loan) I still owe the $266.00 on the 12th of each month.

I just know you have experience with this horrible company and was wondering if you could give me any tips?!

I appreciate your time and your blog is inspiring!

Thank you,
Jennifer

My Response to Jennifer:

Hi Jennifer,

Thanks for reading about my journey with the student loans and I’m glad that you find my story inspiring. I’m currently at about $3 thousand and my projections show that I’ll be fully repaid in about 6 weeks. It’s pretty exciting.

The absolute worst part of my journey was with the NJHESAA. What frustrated me the most about them (and this may be useful for you to understand in your dealings with them) is that they automatically default to the position that the customer is wrong. So if you call them and ask any question about any loan that you have with them, be prepared to be greeted with arrogance, frustration (on their end because you’re so “stupid” in their eyes), and a ready willingness to tell you false information just to get you off of the phone. Quite frankly, their arrogance is worthy of a state investigation as a crime against any of their borrowers. And what I always got a kick out of when I called them was that here I am – a guy with a Bachelor’s Degree with three minors, a Graduate Certificate, a Masters Degree, and a healthy job in high-level finance – and they would act like I was the biggest moron in the world.

The NJHESAA is truly an astounding display of how unqualified people can rise up the ranks of a quasi-governmental agency. Shameful.

As for your situation, I always recommend the snowball approach, but it depends on your other loans. For example, if you have a loan with the federal government and the balance is very low (i.e. something that you can pay off in a matter of 4 – 6 months using the snowball effect), then pay that loan off first. Financial planners would disagree and say to always attack the highest rate loan first, but I think there is something to be said for moral victories. Retiring a student loan – even if the balance is low – gives you a great feeling of accomplishment. Plus, what the financial planners never really talk about (because it’s hard to explain and for a person to financially model in their minds) is the fact that even if you’re paying a higher interest rate on a loan, you’re not really realizing that interest rate in full if you pay it off early. In other words, if you focus on eliminating a lower balance, lower interest rate federal loan and then focus on retiring a higher interest rate, higher balance NJHESAA loan, well you’re not really paying the full interest rate on the NJHESAA loan because you’re going to pay it off early. True, you’ll be paying the full interest rate for the time that the loan is outstanding, but by decreasing the overall amount of time that you spend repaying the loan (by making additional principal payments), your effective interest rate falls.

I once found a good calculator online that explained this a lot better than I can. Of course, I lost that link. If I find it again, I’ll send it over.

I’m not sure if NJHESAA still has the fee for online payments. Once I repaid my loan, I pushed that miserable company out of my life for good. Although I have to admit, I don’t think that they’re done with me yet. I have a mailing list for my blog where folks can sign-up to receive a quarterly list of some of the better entries from the last quarter. Guess who signed up for that mailing list? That’s right – the NJHESAA (and it was their PR person who signed up, too). Probably has something to do with the fact that when you Google NJHESAA, my blog tends to be towards the top of the list…

In general, my advice to anyone repaying a large student loan is to learn to really get in touch with your wants, your needs, and your finances. By this I mean that I was only able to drastically reduce my student loans by living an extremely frugal lifestyle. After I graduated, when my friends would be in the area and wanted to go to the bar – I said no. I couldn’t afford to spend the money. When my buddies made a trip to AC and they wanted me to come along – I said no. My big gamble in life was taking on the student loans (which paid off; and now I go to AC once or twice a year). When I found myself in relationships where the girl I was dating was fixated on a lifestyle of consumption and acquiring material things, I left those relationships. Sure, sometimes it sucks to leave someone that you think you could really care about, but you must consider the bigger picture. If you date someone today who gets upset that you can’t go out to dinner a few nights each week or who wants to move in with you to live in a bigger, more expensive place or town, then what’s life going to be like when you’re debt free? Is that person going to demand more consumption and more keeping up with the Joneses?

Some folks think that is a bleak outlook on life, but I argue it’s the exact opposite. Think of how many people are divorced because of “irreconcilable difference.” That’s exactly what’s irreconcilable – constantly spending money without being smart or saving!

And the final bit of advice (which you probably picked up from my blog anyway), is to work your tail off. I spent my 20s and now the first two years of my 30s working around the clock. Nearly everyday would bring a new deadline to meet. Life has become incredibly crazy, but building this type of work ethic has opened two important doors for me. First, it allowed me to really increase my income to where I could make the over payments. Second, it gave me access to new and better money-making opportunities. A quick example is my work teaching at the local college. Because I was an adjunct there (teaching only 2 – 3 courses each year), the door opened up for me to work at an online college. The pay is much better and the hours are much easier with the online college and that door wouldn’t have opened if I didn’t take the opportunity at the local college – and I wouldn’t have been able to work the local college opportunity if I was out drinking and carousing with the guys.

Everything fits together like a weird, but awesome puzzle!

Before I hit send – a question for you: Do you mind if I use this e-mail exchange on the blog? Names would be changed to protect identities, but I think it’s a good discussion about student loans. Let me know.

Best regards,,
Joe

Jennifer’s Final Response to Me:

Hi Joe,

Thank you so much for your reply I wasn’t sure if you were going to get my email or not. That’s really funny about NJHESAA subscribing to your blog. They are such scam artists it’s not even funny! I just received an email from them yesterday actually. After I called them a week or two ago and asked for something stating my original loan balance and how many payments were remaining I received a billing statement in the mail (stating nothing of what I had asked for). So I tried through email to get a response. They emailed me back saying to refer back to my original loan disclosure(which I obviously don’t have or I wouldn’t be asking them for this information) and informed me they were unable to give me a duplicate copy of the loan disclosure! This company is a joke and I can’t wait to be done with them! This is one of the main reasons I pay them more than my other loan companies. The other ones I am able to obtain any information I need without a problem…not NJHESAA!

Of course you are free to use our correspondence. I am sure there are plenty of others in the same boat as me wondering the same questions

Thank you so much for your time!

I hope you enjoyed this interaction between Jennifer and I regarding our student loans. The moral of the story here is that you are probably not alone in your frustration with your student loan servicer. In fact, you should be intelligently loud and make some noise about your student loan servicer if they are not meeting your needs or treating you horribly. And if all else fails, feel free to start your path to justice by leaving a comment on blogs like this one. You never know where it might lead you!

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 one thing that struck me the most about the headquarters building is that it’s pretty much a fortress. I mean, it’s built like it could withstand any major natural disaster or attack. I honestly think that if a foreign country attacked the capitol, the USED building would be left standing – mocking the foreigners and their wimpy weapons. But that’s just the impression you get from the outside. Once you’re inside you see that it’s really just functional office space. I liked the mission statement of the USED, which was put up right on the wall for everyone to see when you entered the building. Take a look:

The USED's mission statement - give it a read

Pretty good mission statement for the USED, huh? I was down in Washington, DC for a conference on charter schools which I won’t get into in this blog entry. However, I couldn’t help but think that I actually helped build the impressive structure in which the charter school conference was being held in thanks to all of my student loan payments. It was a weird feeling – not necessarily a bad feeling, but one that made me take a step back and think, “Well, here’s the place where my checks have been going for the past few years.” It was just an interesting feeling.

What was not a good or interesting feeling, though, was the physical pain that I endured as I rode Amtrak’s Acela down to Washington, DC. Believe it or not, these asshats actually sold more tickets for the Acela than there were seats for the passengers. Sure, you’ll never get any official response from the Acela people saying that it was standard practice to do that or that they were sorry (apologizing is an acknowledgement of guilt). However, the conductor on the train – who was a very nice guy, by the way – told me and the fifteen other seatless passengers that this was common practice. It was outrageous. So, I rode down to the nation’s capitol sitting on this:

Imagine sitting on this for two and a half hours

Yeah… not comfortable at all. Anyway, I visited one of my two major student loan lenders last month. And while I don’t think that I’ll ever willingly or happily visit the headquarters building of the New Jersey Higher Education Student Assistance Authority (NJHESAA), I’m actually going to be really close to some of their associates starting tomorrow. Turns out that NJHESAA and my company will both be exhibitors at the New Jersey Charter Schools Association conference in Atlantic City this week. I don’t know if we’ll be anywhere near each other, but I feel like being in the same room as those people is going to drive me nuts. Frankly, I have half a mind to walk up to their booth and ask them why they felt the need to treat a highly intelligent, good-natured person (me) like a dumb, moronic piece of garbage every time I called them. And that same half of my mind wants me to ask them why they wouldn’t contact the credit agencies to report their mistaken even after admitting that they made a blunder when they reported that I made a late payment when no payment was actually due. Those idiots lowered my credit score for a few months until I had to go out of my way to get that stupid mistake wiped clean from my record. Idiots.

Anyway, enough of that tangent. The point of this entry is that I visited the USED headquarters building in Washington, DC and I was pleasantly pleased with the visit. I hope that they do their customers well as they continue to ramp up their student loan production.

Comfortably at $40 thousand

There are some variables that I can’t anticipate yet so my projected final repayment might change by a month or two (closer, not further away). In the next year or so some of my major volunteer obligations will be coming to an end. Along with the increased free time that I’ll have (where I could potentially make more money), I’ll also be free of some annual donation requirements that I accepted when I assumed these volunteer positions. With a few extra bucks to play with I might be able to bring that final repayment date back another month to May 1, 2013.

Also, I always have the option that I exercised last fall to accelerate my repayment and final payoff of my NJHESAA student loan. That option is to cash out of my small stock portfolio and use all of the proceeds to repay the balance of my USED student loans. If I was to exercise that option, then the final repayment date wouldn’t be June 1, 2013 or even May 1, 2013, but instead it would be somewhere around December 1, 2012 – or about one year from now.

While I enjoy having my small stock portfolio it is very tempting to cash the whole thing out to speed up the repayment of my student loans. I’m going to have to think about that for the next few months and see which way I want to go with that option.

Not much more to write about today. I did want to note, though, that not only is my student loan debt sitting at $40 thousand, but as of today I’ve repaid some $30 thousand in interest and another $81 thousand in principal. Pretty spectacular (when the alternative seems to be marching around Wall Street and complaining that my student loans are too big).

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $40 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Just $41 thousand left

If you’ve been reading my blog for a while now, then you may remember when I wrote about how utterly useless and totally not helpful the New Jersey Higher Education Student Assistance Authority’s online payment system was when it was implemented. By the way, that entry from February 2010 is one of the most viewed and most popular entries on this entire blog. In fact, if you go to Google and type in “NJHESAA” there is a link to that entry in the first four or five results that come up on your screen. Pretty good for some random guy’s personal blog, huh?

Before I start to go off on a tangent, let me get back to the short point that I want to make here. The NJHESAA’s online payment system was totally useless. Much like the government-enforced monopoly held by utility companies (which are keeping a large portion of New Jersey literally in the dark right now), NJHESAA actually charged borrowers to make online payments. It was pathetic. On the other hand, the USED doesn’t charge their borrowers to make online payments and even allows you to add additional funds to your regular monthly payment amount. It’s a great system – very easy to use.

A few weeks ago when the USED transferred their system to the new MyEdAccount.com website, I wanted to come on here and rant and rave about how much I hated having to wait for the new website to be implemented. Well, after using the new website and the new system for a few weeks I have to say that I’m very impressed. They didn’t cut many corners putting that website together and yet they still managed to pack it with a bunch of great information and keep a simple, no nonsense look.

Anyway, after my latest payment I’m down to $41 thousand left outstanding. That’s about $80 thousand in student loan principal repaid (and another $30 thousand in interest paid) since July 2006. Absolutely amazing. I definitely could have used that $110 thousand for other purposes over the last 5 years (buying a house, getting a new car, not working around the clock at multiple jobs during my mid-to-late 20s, etc), but it’s okay. The end is near for this repayment plan. Soon, $41 thousand will drop to $40 thousand and then $40 thousand will become $35 thousand and so on and so on until we’re counting down the last $10 thousand together. We’ll get there sooner rather than later.

It’s just a matter of sticking to your guns no matter what people suggest that you do with your money or your life. Most of the time in life, only you know what’s best for you. For me, repaying these student loans as quickly and efficiently as possible is what’s good for me.

And that’s what I’m going to do.

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $41 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Total debt down to $46 thousand

And what exactly is “excess” income?

I define my excess income as the money that I make outside of my regular, daily job. Many of you know that I work like a madman: I own and operate a small website company which, in turn, owns and operates a few different web properties; I’m an adjunct professor at the local college; and I’m an online mentor for a very popular online university. One of the reasons why I work like a madman is not because I like being busy 24 hours a day, 7 days a week. I work like crazy because I direct all of that excess income that I earn from these activities directly towards repaying my student loans. Period.

And when the time comes that my student loans are fully repaid (by my estimate that could be as early as 12 months from now), I’ll have a few significant income streams coming my way. Unfortunately (or fortunately, whatever), I’m not going to be able to take an immediate break from working like crazy. The reason for that is because I’m going to have to work just as hard to rebuild, bolster, and dramatically increase my savings and investment accounts as I did to repay my student loans.

If I can repay the balance of my student loans over the next 18 months, then I’ll be 32 when my repayment is complete. By that point in my life, I should have been able to save (through investments, savings, CDs, and my 401k) a little bit over $150,000. While I definitely am on my way towards that goal, the aggressive student loan repayments obviously make it such that I have some catching up to do.

But I’m clearly not worried. I’ve knocked down over $100 thousand in student loan principal and interest in the last two years. With my income increasing each year and my now relative ease living with extreme budgeting to reach specific financial goals, I should be well above $150,000 in savings by the time I turn 33. It’s just a matter of stopping the useless, meaningless spending and directing your funds towards the things that really matter – like paying off debt!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. After completely repaying over $61 thousand in student loans (not counting interest) from the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank, I currently owe $46 thousand to the United States Department of Education’s Direct Loans program. Follow my student loan repayment story on JerseySmarts.com.

Smashed down to $49 thousand

For example, let’s say that for some reason one of my roommates has to move out. That would bump my portion of the rent an additional $300 per month or $3,600 per year. Well, before I begin to send thousands of dollars down to Washington, DC to repay my student loan debt, I want to be sure that I’m in a position to be able to pay for any increased costs that may come my way. A more likely example of an increased expense is having to purchase a new car. As I wrote about on here a few years ago, my Chevy Blazer died in August 2008. Since then, I’ve been driving my Mom’s old Honda Civic. I’ve managed to run up the mileage on the Civic to about 140,000. And while I understand that Civics are built to last a long time, 140,000 miles is still a lot of mileage for a car. In the event that I need to buy a new car, I want to be sure that I can put a substantial down payment on the purchase instead of just a few thousand bucks.

So I’ve been spending a lot of time and effort bolstering my cash reserves. Thus far (and without going into any detail), it’s been a pretty successful enterprise. The end result of this success is my being able to slowly shift my focus from building up the reserves to decimating the remaining student loan debt… and that’s what I’m beginning to do.

Stick around at JerseySmarts.com because I’m going to start kicking the balance of this student loan’s ass really soon!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. After completely repaying over $61 thousand in student loans (not counting interest) from the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank, I currently owe $49 thousand to the United States Department of Education’s Direct Loans program. Follow my student loan repayment story on JerseySmarts.com.