Where the student loan burdened crybabies and occupiers failed, I succeeded.

When 2011 began I had $54,385.85 in total student loan debt remaining payable to the United States Department of Education. When 2011 ended I had $34,911.14 in total student loan debt remaining (still payable to the USED). The reason why I share these numbers is because I want people out there with incredible amounts of student loan debt to know that you can defeat your debt and you can do it without the dream job or the six figure salary. You can defeat the debt by working hard and giving up many of the luxuries of life until you can afford them.

I’m not going to recount my point of view on these topics because I’ve done so over and over again in 2011 (and prior years). However, what I thought would be helpful is if I put together a brief list of links to other student loan entries from 2011 that focus on certain topics related to repaying student loan debt.

• January 2011: The Year Begins
• April 2011: Repaying Student Loans Versus Spending Money on Other Stuff
• May 2011: Quoted in USA Today – Again!
• August 2011: Responding to Dumb Comments
• August 2011: Pondering Post-Repayment Financial Goals
• October 2011: Thoughts on the Movement to Forgive Student Loans
• December 2011: The Power of Focus, Research, and Action

Personally, I think that the last entry linked above is a really good one. If you have a few minutes and you haven’t read that one yet, then I recommend giving it a go. Here are some other interesting tidbits regarding the repayment of my student loans in 2011…

• Daily Interest. When 2011 began I was accruing $6.71 every day in interest alone. Today, my student loans accrue $4.30 in interest on a daily basis. It’s not great, but I’ll take a $2.41 reduction in interest accruing everyday! Over the course of a year, that’s $879.65 saved in interest alone. Still think that it’s not worth it to drastically overpay your monthly bills?
• Principal Repaid. In 2011, I repaid a total of $19,474.71 in principal.
• Interest Repaid. In 2011, I paid a total of $2,133.68 in interest. Also, because the tax code is written to reward lazy people with a redistribution of wealth from those of us who work their asses off (i.e. people who aren’t rich, but still work like crazy to earn enough money to repay their debts), I won’t be able to count the full $2,133.68 as a tax deduction. Why? Simple – I worked too hard in 2011 and earned too much money so my eligibility to count the $2,133.68 as a tax deduction is nullified. Think about that – I worked extra hard to earn extra money that I did NOT keep or stick into an account somewhere. Instead, sent that money to the government to repay this loan and that same government is going to penalize me for that hard work in repaying their loan by not allowing me to count the $2,133.68 as a tax deduction. Now tell me how this government is working in the best interests of the hardworking middle class again???

Look folks – either you get busy repaying your debts or you get busy occupying public space and/or crying and whining about something that only you can really change. Getting busy repaying your debts works – my experience proves that time and time again. Bitching and moaning about how your debt is someone else’s problem isn’t going to get you anywhere – the public displays of childishness proved that throughout the latter half of 2011.

Here’s to pushing harder than ever to have my student loans totally repaid by the end of 2012!

But the latest article was an online-only publication and while the first article no longer has the bevy of ignorant comments listed underneath it, the second article certainly has some comments that make you go “Hmmm…” (my thanks to the C&C Music Factory for the reference!).

Huh? Wuh? Some people don't seem to be able to think...

Or, in pug terminology (as shown in the pictures above), some of the comments on the recent student loan article had me cocking my head to the side wondering what the hell I was reading. While I admit that the comments were in no way as ignorant or arrogant as the ones that were posted after my first student loan article was published, some of these comments were just mind-boggling. For example, the following comments were posted:

“The horror of having roommates and driving an 11 year old car. My god, what a huge sacrifice!! I had roommated til I was 30, went off on my own for a year, got engaged and then got married. I would probably still have roommates if I found some cool enough. Why not live a cheap as possible?”

Now this moron couldn’t spell roommates seemed to misinterpret an otherwise very easy, simply element of my story. You see, my story was about how I managed to pay off so much of my student loan debt in so short a period of time. As was cited earlier in the very same story that this guy was commenting on, I live with roommates and drive a well-worn 2000 Honda Civic. Those aren’t complaints – they are just methods by which I spend less money and thus put more money towards paying for student loans. Now, imagine how downright stupid this person must be to have read that portion of my story and interpreted it as me complaining rather than sharing a good strategy for saving some money to ultimately put towards repaying student loans. I’m tell you, some people are just dumb. Here’s another one.

“You graduate from college with $100k+ in loans and no special skills, what you expect. At least he is paying off, many are not.”

Okay, well the second part of this comment is dead on accurate – I’m paying off my student loans instead of bitching and moaning about how I can’t afford them or woe is me or whatever, blah, blah, blah. But how ignorant – how downright dumb – can someone be to think that I graduated from college with no special skills? Really? REALLY? You think that someone who is 30 years old could manage to pay off about $75,000 in student loan principal and about $30,000 in student loan interest over a 4 year period and NOT have any special skills that are clearly desirable in the job market?

Really? Are people honestly that stupid? Look, I could go on and on about how I’m one of the leading financiers of a very niche community-based industry in New Jersey, but something tells me that the dull-minded person who wrote that stupid comment would read about what I do for a living and go, “Wuh?” Idiot.

Those were the two comments that had me mimicking the pugs in the picture above. However, most of all I find myself appalled at the comments where people say shit like, “Well, I went to college and paid for it all by myself with no student loans – so why DON’T YOU!?!?” Ugh. I guess that everyone’s life situation has to be like that person’s life situation, huh? Talk about the epitome of ignorance and arrogance.

Anyway, just sharing some frustrations with the public display of ignorance and stupidity that was unfortunately posted on USAToday.com. Now, back to the reality of demolishing my student loans!

If I can toot my own horn – my progress is pretty impressive by any measure.

Those of you who have been around JerseySmarts.com for an even longer period of time may remember when I was interviewed by USA Today back in 2006 about the enormity of my student loan debt (JerseySmarts.com Article | USAToday.com Article). Well, earlier this week – some five years after the good folks at USA Today plastered my mug on the front page of their newspaper (above the fold, thank you) – I had a follow up interview with the newspaper to give them an update on my student loan repayment progress.

USA Today Provided a Brief Update and Quote on My Student Loan Repayment Progress

Sandra Block – the personal finance guru at USA Today who wrote the original story back in 2006 – interviewed me this past Wednesday for about 20 minutes. It was really a lot of fun! Ms. Block is an excellent interviewer and she really allowed me to tell her the story of my last five years. In fact, she referenced my student loan repayment progress and even quoted me in an article that was published on USAToday.com yesterday. You can read the article (I’m referenced and discussed in Point 3) by clicking here.

I’m really pleased with the article and the few lines that are allotted to my story within it. As always, Ms. Block did a good job of cutting through my story’s fluff and boiling it down to an easily digestible “real story” for the readers to absorb. And I hope that the readers did absorb the reality of my experience and that my story helps them with their own repayment plan.

If anyone out there would ever like to talk about their student loans or discuss their repayment plans, you should always feel free to send me an e-mail. I’d be glad to share more about my experience and do my best to provide you with my reality-tested advice. Of course, you could also keep an eye on JerseySmarts.com because this is where I ply my writing trade, but you already know that, right?!

In short, I’m glad to be back in USA Today after five years of dedicated, hard work repaying my student loans. And I encourage you all to stay tuned. I’ve got about $51 thousand left outstanding and I’m getting ready to gear up on my repayment of that loan in the coming months.

The light at the end of the student loan repayment tunnel is becoming brighter, clearer, and more in focus after all!

Repeat: $555,000!

WOW!!! That’s incredible… and completely unacceptable.

When I saw the headline on Yahoo! News that read, “The $555,000 Student-Loan Burden,” I had to read more. And what I found was the story of Dr. Michelle Bisutti. If you want to read her story directly as reported by Yahoo! News and the Wall Street Journal, you can click here and take it in for yourself. Here are the parts of the story that struck me and stuck in my head:

When Michelle Bisutti…finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.

It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.

WHAT?! A $54 thousand fee for turning the loan over to a collection agency?! Okay, look. I understand that lenders need to be repaid. Heck, I work for a statewide loan fund and when my borrowers don’t repay their loans, my professional life sucks. So, I completely understand the need for people to repay in good faith. But a $54 thousand fee for turning a debt over to a collection agency? Get out of here! That’s ridiculous and should be reversed without question.

How dare someone charge that type of fee? For comparison’s sake, if an interest rate was that outlandish it would be called usurious and the lender could possibly be taken to court and penalized. A $54 thousand fee… good grief!

There is an estimated $730 billion in outstanding federal and private student-loan debt…and only 40% of that debt is actively being repaid. The rest is in default, or in deferment, which means that payments and interest are halted, or in “forbearance,” which means payments are halted while interest accrues.

Ummm… can anyone say “bubble ready to burst?” When you combine the high unemployment rate with the increasing student loan debt burden – well, it’s not a good thought. Only 40% of student loans are actively in repayment? Oh boy…

Dr. Bisutti says she loves her work, but regrets taking out so many student loans. She admits that she made mistakes in missing payments, deferring her loans and not being completely thorough with some of the paperwork, but was surprised at how quickly the debt spiraled.

As a guy whose student loan debt story was also spread out all over the national media, I’m glad that this paragraph was included in the story. One of the missing pieces of my story in USA Today was that I pretty much knew what I was getting into with respect to my student loan debt. It appears that Dr. Bisutti knows how she wound up in the position that she’s currently in and I can tell you from experience that this puts her a few steps ahead of other student loan borrowers that are falling behind on their payments.

While in school, her loans racked up interest with variable rates ranging from 3% to 11%.

Eleven percent?! Are you kidding me?! Now we are dealing with usurious interest rates if you ask me…

She maxed out on federal loans, borrowing $152,000 over four years, and sought private loans from Sallie Mae to help make up the difference. She also took out two loans from Wells Fargo & Co. for $20,000 each. Each had a $2,000 origination fee. The total amount she borrowed at the time: $250,000.

In case any of you are wondering how a person borrows $250,000 in student loans – there’s your answer. Quite frankly, I know folks that have over $200,000 in student loan debt. In fact, I’d be one of those people if I decided to stay in Graduate School until I received a Doctorate. And while I do anticipate eventually going back and obtaining a doctoral degree, I want to eliminate or dramatically reduce the remainder of my student loan debt ($80 thousand as of this writing) before I take that step.

In 2005, the bill for the Wells Fargo loans came due. Representatives from the bank called her father, Michael Bisutti, every day for two months demanding payment. Mr. Bisutti, who had co-signed on the loans, finally decided to cover the $550 monthly payments for a year.

Ugh. What a horrible resolution to this particular loan’s status. One thing that always stuck in my mind when I was an undergraduate (not a graduate student) was that my Mother co-signed for my student loans. I’m not quite sure what benefit, if any, I received from having her co-sign, though I know that she made a quarterly interest payment on the loans while I was in school. There was no way that I was going to let any of my student loan debt fall back on my Mom and Dad’s shoulders, so as soon as I had the opportunity to consolidate my $121 thousand in loans I did so.

Again, I didn’t receive a lower interest rate because I had a co-signer with an excellent credit score, so other than providing the student loan companies with an additional repayment source, I’m not sure what the benefit of a co-signer is for today’s undergraduates.

She recently entered a rehabilitation agreement on her defaulted federal loans, which now carry an additional $31,942 collection cost. She makes monthly payments on those loans — now $209,399 — for $990 a month, with only $100 of it going toward her original balance. The entire balance of her federal loans will be paid off in 351 months. Dr. Bisutti will be 70 years old.

Well, at least the good Doctor found herself a repayment plan. But with only $100 of each payment going towards the original balance, she’s going nowhere fast. However, if I can make any recommendation to Dr. Bisutti it would be to overpay when possible and as much as possible.

The debt load keeps her up at night. Her damaged credit has prevented her from buying a home or a new car. She says she and her boyfriend of three years have put off marriage and having children because of the debt.

I readily admit that there was a time when my student loans kept me up at night. Those days are pushing further and further away, but they’re still close enough where I remember the gut-wrenching feeling of not believing that there was an easy way out of the student loan debt situation. Of course, I’ve found my way and I’m beating the crap out of my student loan debt, but there are hundreds, thousand, and even tens of thousands of student loan borrowers out there who are in way over their heads. I sympathize with their situations and hope for the best for each of them (and their lenders, who should be repaid).

Back in June 2006 when I was plastered on the front page of USA Today the one thing I remember most from that whirlwind experience was that people tried to project their personal situations on my situation. I can’t tell you how many internet message boards I read that said I should have gone into the military because, “Back in 1946 that’s what I did and the government paid for my education!” Or how many times I read crap like, “Joe should have gotten a job while in college and not eaten so much!” (I had two jobs in college and there were MANY comments about my weight on the internet message boards because, well, people are really, really dumb).

That said, I dare not project my personal situation on the good Doctor chronicled in this story. Like I wrote above – I’ve also been kept awake at night because of my student loan debt. I know what that suffocation feels like and I’m sorry to hear that anyone else has to go through it. I know what it’s like to not be able to buy a home because you can’t begin to put away the proper down payment. I know what it’s like to not be able to purchase a brand new car for the same reasons. And I know all too well what it’s like to push off new or advancing relationships because the thoughts of your student loan debt consume you.

So, if this blog entry reaches Dr. Bisutti I hope that she is doing well and making progress in repaying her debt burden. Good luck, Dr. Bisutti!

The message below is what popped up as something that I should share with my friends and family (and online readers) after I signed an online petition. I hope that you’ll take a minute and read through this information and, if you so choose, sign the online petition linked below.

Do you know what’s less safe for our children than fast-food? Their school lunch!

A recent investigation by USA Today found that the meat sold to U.S. school cafeterias faces less testing and lower safety standards than the meat that’s served in most fast-food restaurants — outlets that aren’t otherwise known for their health consciousness and are as cost-conscious as the most passionate deficit hawk.

That’s right: McDonalds, KFC, and Jack in the Box test the ground beef they buy five to 10 times more frequently than the USDA tests beef for U.S. school lunches! And these restaurants have for years refused to buy certain kinds of lower-quality meat and chicken which the USDA continues to accept.

I just signed a petition to ask Agriculture Secretary Vilsack to set better standards for school lunches. I hope you will, too. Please have a look and take action.

http://act.credoaction.com/campaign/school_lunch_fdn/?r_by=-2078083-S9YA0qx&rc=confemail1

Again, I hope that you are moved to some action on this information. All it takes is a few minutes to sign an online petition, if that. I believe that one of the reasons why we are experiencing an epidemic of obesity in this country is because of the foods we are eating. Yes, food quantities are a problem (we eat too much food), but a worse problem is the quality of the food that we are putting into our bodies. When I think about feeding horrible food to our children in school lunchrooms, it makes me pretty angry. Please take a minute to sign that online petition – we have to fight back against industrial agriculture at some point and the school lunchroom might be the perfect place for action.

Two homeless Hungarian brothers who have been living in a cave and selling discarded junk for a living are in line to inherit almost $7 billion from a long-lost German grandmother’s fortune, Britain’s Telegraph reports.

Their sister, who lives in America, will also share in the inheritance.

The fortune comes from the estate of a maternal grandmother who died recently in Baden-Wurttemberg, Germany, the Telegraph says.

“We knew our mother came from a wealthy family but she was a difficult person and severed ties with them, and then later abandoned us and we lost touch with her and our father until she eventually died,” 43-year-old Geza Peladi told Hungary’s ATV television.

The name of the deceased is being kept secret to prevent scam artists from coming forward, the paper says.

Geza and his brother, Zsolt, who live in a cave outside Budapest, got the news from a charity worker who was contacted by lawyers for the estate. Under German law, direct descendants are automatically entitled to a share of any estate.

“If this all works out it will certainly make up for the life we have had until now — all we really had was each other — no women would look at us living in a cave,” said Geza. “But with money, maybe we can find a partner and finally have a normal life.”

The brothers are currently getting copies of their mother’s death certificate and proof of their identity before going to Germany to claim the fortune.

Unbelievable, huh?

The Associated Press and CNN are calling Republican challenger Chris Christie the winner of the New Jersey governor’s race, based on exit polling.

The actual results are still pretty close: Christie’s ahead 49% to 44% with 81% of the precincts reporting. But Christie is doing extremely well in Republican strongholds in Ocean, Monmouth, Morris and Somerset counties, while holding his own against Gov. Jon Cozine in key swing counties, including Bergen and Middlesex counties.

Christie would become the first Republican to win statewide office since Christie Whitman, who also defeated an incumbent Democrat, Jim Florio.

And there you have it. Republican voters in New Jersey have had enough of dealing with the cross-talking and ultra-liberal Jon Corzine and he’s lost his job because of it.

I do, however, want to share a link that I found while looking around USA Today’s website this morning. A review of the numbers shows that older white males are losing their jobs in this recession, but also that they are unable to find new jobs.

Jobless rates for men and women older than 55 are at their highest level since the Great Depression, government data show. White men over 55 had a record 6.5% unemployment rate in the second quarter, far above the previous post-Depression high of 5.4% in 1983. The jobless rate for older black men was higher — 10.5% — but more than a percentage point below its 1983 peak.

The most remarkable change is in the unemployment rate for black women: 12.2%, far below the historic peak of 20% in 1983. Hispanic unemployment is about 6 percentage points below historic highs, too.

A cursory review of those numbers shows that older white males, as a population, are still doing much better than the rest of the populations out there. However, I notice that they don’t breakout the age ranges for the black women or any additional demographic information for the Hispanic population.

What I like about the article is that it talks in detail about three older white guys who lost their job and details what’s going on in their lives. USA Today is good at writing these types of stories so if you have some time, give it a whirl.

The first commentator was Robert Applebaum, a guy whose Facebook group to cancel all student loan debt immediately is one of the few groups that I’m actually a member of on the social networking site. Obviously, I agreed with what Mr. Applebaum had to say in his portion of the commentary (which you can read by clicking above). The next commentator was Dr. James Monks, an associate professor of economics at the Robins School of Business at the University of Richmond.

Dr. Monks took the following stance:

A great deal has been written about the onerous debt levels taken on by some of today’s college students. Much of this discussion grossly overstates the true degree of burden that student loans place on most graduates. An overwhelming majority of students have reasonable and manageable levels of student loans. The typical four-year undergraduate student loan package totals approximately $19,000 — no more than a midsized car. An automobile begins depreciating the minute you drive it off the lot, while one’s college degree is an investment that will garner you a lifetime of higher earnings.

And Dr. Monks goes on and gives a brilliant commentary on many of the student loan debtors graduating today. Anyone who has read my blog over the years knows how important student loans and student loan debt are to me as both a real-life issue and a cause for advocacy. However, I completely agree with Dr. Monks and everything else that he wrote (which, again, you can access by clicking the link above and scrolling down the page). I did, however, feel that it was necessary to contact the good Doctor to let him know that there are people like me out there and that student loans are stifling us. So I sent Dr. Monks this e-mail:

Dr. Monks,

Thank you for your great addition to the New York Times online article regarding student loan debt. Your discussion in the online blog does a great job of dispelling the myth that the average student loan debt is too onerous for today’s college graduates. As anyone with a basic understanding of money can tell you, repaying a $20,000 student loan to earn $800,000 more over a lifetime is well worth the investment.

However, what about the outliers? What about the folks chronicled in this USA Today article:
http://www.usatoday.com/money/perfi/college/2006-06-11-debt-cover-usat_x.htm

You’ll notice my picture on that page and I might add that in addition to butchering my quotes to make me sound like I want pity, USA Today listed my total debt at $118,000 when it was really $121,000. I want no pity! I work very hard at a nonprofit financial institution where I provide money to build charter schools in New Jersey’s poorest performing districts. I operate my own small business at night and on the weekends and I’m an Adjunct Professor at the local college. I do everything that I can to generate more income so I can pay down this debt – and it’s working. Since the Summer of 2006 when I started paying back these loans, I’ve repaid $21,000 so that my total outstanding is now at $100,000. I think that’s pretty good.

I think I’m successful, student loan debt aside. However, I needed that debt in order to be the first in my family to complete college and the first to get a Masters Degree. Without those loans, I would not be where I’m at today.

But in the mean time, I’m almost 30 and I still haven’t purchased a house. My truck broke down in the fall and I had to take my mother’s old car as a replacement instead of buying a new one. Trust me, I live on an extremely frugal budget and I don’t waste a dime.

What is your advice for those of us who drive up the average student loan debt? I don’t ask as a condescending reader of the Times, I ask as someone who is impressed with your knowledge of the topic and wishes to pick your brain.

Thanks,
Joe

I changed some of the wording to protect some sensitive information. To Dr. Monks’ great credit, he responded with the following e-mail:

Joe,

I applaud your positive attitude and steadfast approach in trying to reduce your debt. I suggest that you investigate the government’s new income based repayment (IBR) program that caps repayment of federal students loans based on income. Also, you should investigate the Public Service Loan Forgiveness program that forgives federal student loans after a period of repayment for individuals working in certain public service jobs, such as non-profits. These programs may help to reduce your monthly payments and then reduce your total level of debt, for government initiated student loans. If you have private student loans, I am not aware of any similar programs. I hope this information is helpful. Good luck!

Jim

Now, I was pretty much well aware of these programs prior to e-mailing Dr. Monks, but I have to say that I was impressed with his e-mail. He clearly took the time to answer my questions and address my concerns. I think the larger student loan debate is missing this type of humanity since so many people are too quick to project their own experiences onto the lives of others.

So I take this small space on the internet to say thank you to Dr. Monks for sharing his knowledge with me…and now my readers.

Credit cards are great tools to help build a credit history, but they have to be used properly or they can demolish a person’s financial status. Anyone who knows how to use money to their advantage can tell you that not all debt is bad debt. Sometimes a person can use debt to their advantage (for example, the right types of student loans and home mortgages). Consumer debt, though, is a different story.

The right types of student loans and home mortgages are investments in the long-term future of you and/or your family. Consumer debt, though, is more of an investment in the here and now – this is why it should be used sparingly. Sure, everyone falls victim to the use of consumer debt to meet their immediate wants. Hey, I spent a great deal of money buying a television last month just because I wanted it! Well, the old television was broken, too, but that’s a different story. That said, though, I do not believe that people should avoid credit cards. I think each person should have one or possibly two credit cards, but no more. I keep one to both maintain a good credit history and just in case I need access to a large dollar amount quickly (since I don’t keep much cash in my checking accounts – the money stays socked away in the savings and investment accounts).

In any event, I thought the USA Today article was pretty good and wanted to share. Enjoy!