This little blog has become rather more focused on food policy than I originally set out for it to be on my journey to pay back my student loans without sacrificing the good, local, healthy and fun food in my life, but hey, you write about your interests, no?
This holiday, I’m giving myself the gift of debt reduction. And what do you know, that comes with peace of mind too. 🙂
My loans are spread between two student loan collection agencies, Sallie Mae (now Navient) and ACS Education Services (known as ACS). The 5-figure bulk of these loans are housed at Navient, and one $6,000 Federal Perkins Student Loan is at ACS. Although one of the Navient loans has a higher interest rate, since I feel motivated to knock out this pesky Perkins loan at ACS first, I’m just going with it. Hopefully getting rid of that one in its entirety will create a virtuous snowball effect to tackle the bigger amounts with renewed energy and frugality. (I’m already making all loan payments on the 10-year payback plan; I’d just like to up my monthly payments and pay down that principal sooner.)
I did some math to remind myself of the egregious nature of these loans. At a 5% interest rate, making my rather meager $63.64 monthly payments for 10 years comes out to $63.64 * 120 months = $7,636.80. That’s an extra $1,600+ above and beyond the principal. Ouch. I calculated that so far I’ve paid $1,065.48 — but $203.86, or almost 19%, of that is just interest. Of the $861.62 I’ve paid towards the principal, that’s just 14% of the total original loan. Pretty measly.
Up til now, I hadn’t put any of the extra income from my side job towards loan payments, what with holiday travel and weddings and whatnot getting in the way. But I just received a large travel reimbursement from work, and those calculations helped re-ignite a desire to get out from under this onerous debt, so here you go, ACS. Take my $1000 now, and hopefully a few more similar installments, and begone!