Thursday, September 4, 2014

why i do it

When people find out about my crazy student loan repayment schedule, their first question is "How?" (the answer to that can be found here) The unspoken question, the one I can see in their eyes, is "Why?" Why would I take on this accelerated repayment plan when I could just apply for loan forgiveness (this is possible since I work for a public institution)? There are a few reasons.

  1. Because I can. Probably the easiest and most straightforward reason. C and I have the means to do this. If we didn't, we wouldn't be. We would be paying the minimum, because the minimum is all you have to pay in order to not get yourself in trouble, or some amount in between the minimum and my-entire-paycheck.
  2. Because I don't trust the government. We've already established that I'm a libertarian, but this goes beyond that. In order to take advantage of the PSLF program, you have to make 120 on-time payments. For those of you bad at math, that's 10 years worth of monthly payments. Since I don't have to (see above), I'm not going to put all of my faith in a government program and hope that it doesn't get de-funded before 10 years from now. Just the thought of racking up ALL of that money in interest in hopes that it would be forgiven, and then having the rug pulled out from under me, is enough to make me want to vomit. Plus, that also ties me down to one (type of) employer for 10 years, which gives me anxiety. Don't fence me in!
  3. Because it makes me feel good about myself. I feel proud every time I make a payment! When I see my balance going down, it makes me smile. And when I think about how C and I will only have our mortgage after these are paid off, that makes me even happier.
  4. Because these interest rates are no joke. Currently my student loan interest rate is at 6.55% (and that's with a 0.25% rate reduction because I'm enrolled in auto-pay), which is higher than our mortgage rate and our auto loan rate COMBINED.
    Still, though, 6.55% isn't that high, right? I present to you Exhibit A: My payment history for the last 12 payments. As you can see, this goes back to mid-May (the last payment I would have made before this list starts is 5/17), which is less than 4 months ago. In the span of 3.5 months, I paid almost $570 in interest alone. HOLY CRAP that's alotta money! And I'm paying WAY more than I'm scheduled to. I'd hate to think what that number would be if I were only paying the minimum balance every month. And it just goes to show you that paying even a little extra each month means less money going down the drain to interest!

So that's it. I'm sure to some people it still seems crazy, but to me it's totally worth all the struggle and sacrifice. (Plus all the kudos from you guys doesn't hurt either!)


  1. You do you! 6.55% is nothing to shake a stick at. You should be proud of the pay down!

  2. I think you and your plan are awesome! I'm right there with you- I FEEL GOOD when I make a payment. Tons of people/friends say- well just pay a little extra each month (instead of a huge chunk) that way you'll still pay them early but have more fun in the meantime. But to me, that interest and the FEELING we're going to have when they're gone?! Outweighs a little fun now!

  3. Screw all them people - this is awesome. Nothing better than paying off a debt, seriously!

  4. i tried to apply for loan forgiveness and they basically laughed in my face. either way, i made it my mission to pay that shizz off and it felt good doing it too!