May 2021 – Student Loan Balance(s) Update

I apologize for my tardiness. Between the end of classes and being out of town, this just wasn’t the priority it should have been. To the numbers…

AccountDebtDebt (7/1/19)Min. PaymentInterest Rate
Private Student Loan 1$0.00-$10,231.32$110.460.000%
Private Student Loan 3-$4,307.78-$12,580.49$153.826.620%
Private Student Loan 4-$9,535.66-$13,280.33$245.403.750%
Private Student Loan 2-$6,984.67-$8,271.15$93.305.120%
Federal Student Loan 1-$21,440.37-$20,583.34$0.006.800%
Federal Student Loan 2-$13,946.84-$13,457.55$0.005.310%
Federal Student Loan 3-$11,184.47-$10,737.40$0.006.800%
Federal Student Loan 4-$7,748.09-$7,518.58$0.004.450%
Federal Student Loan 5-$5,561.12-$5,520.10$0.004.450%
Federal Student Loan 6-$3,147.30-$2,849.21$0.005.600%
Federal Student Loan 7-$2,863.10-$2,649.80$0.004.660%
Federal Student Loan 8-$2,457.12-$2,538.91$0.006.800%
Federal Student Loan 9-$2,307.18-$2,047.30$0.006.800%
Federal Student Loan 10-$2,003.02-$1,813.31$0.005.600%
Federal Student Loan 11-$1,639.01-$1,573.49$0.006.800%
Federal Student Loan 12-$1,144.25-$1,035.88$0.005.600%
University Student Loan 1-$3,865.71-$4,581.00$60.418.000%
University Student Loan 2-$3,090.59-$3,629.38$0.000.000%
University Student Loan 3-$505.76-$1,031.21$30.008.000%
University Student Loan 4-$308.63-$857.81$30.008.000%
Personal Student Loan$0.00-$1,875.70$312.620.000%
Total-$104,040.67-$128,663.26

April 2021 – Student Loan Balance(s): -$106,077.01

May 2021 – Student Loan Balance(s): -$104,040.67

Total Payments: $2,157.31

Net Difference: $2,036.34

Not bad. Only $120.97 went to interest in April. Again, in general, that’s not great but given how large my student loan balance is, it’s definitely a win.

Last month, C suggested that I include the “original” balance amounts on my student loan report and include balances that have been paid off during my journey. It was a good idea, so I obliged. In the third column, I have decided to include the balances at the time I started this blog; I have also included the personal student loan from my best friend and Private Student Loan 1 (PSL1), which I originally removed from the table once they were paid off. While my student loan balances have been higher (and lower) at some point prior to when I started blogging, given that this was really the start of my journey here, I’ve decided the blog start balances make the most sense.

Easier said than done…

The Universe, life, God, or whatever your existential bent may be, frequently tests your commitment to any plans, goals, or values you dare to speak aloud. Less than a week ago, in April 2021 – Life Update, I stated:

5) Consulting Work – This continues to be a balancing act. I have accepted a second project that will take me through the end of May but I will not accept any new work over the summer. I know! It doesn’t really seem as though I am in a position to be turning down lucrative work. However, taking the second semester of organic chemistry over the summer will be very intense, and other than work at University B, which is much more lax at universities during the early summer, I want that to be the only priority.

Right. Having dared to speak this allowed, I get the following email from a colleague this afternoon:

Hi, AP.

We were hoping to have our new (insert outstanding role) in place before the (the summer camp), but it is looking like that is not going to happen, so we are in a position to hire a couple of people to be (instructors at a virtual camp). I don’t know how much flexibility you have with time in your job, but we would love for you to be a part of the (camp staff) if you might be able to swing it.  We know it’s a long shot but figured it couldn’t hurt to ask!

Typical daily schedule is here: (link removed)

Pay would be $2,000 for the two weeks. 

Please let me know if you might be interested and if you have any questions! 

Take care, Colleague

Ugh. This should be a no-brainier. I should have immediately responded to my colleague stating, “Thanks so much but no thanks this summer.” But I have not done this. Instead I have spent the last half hour trying to figure out how I can do all three (job at University B, summer camp, and summer class). Realistically, it’s not possible to do all three and the most significant friction is between my planned academic summer course and the virtual camp schedule.

I don’t know why I haven’t already responded to my colleague. That’s not true. I do know. It’s called, “opportunity cost.” There is a real cost of applying to medical school and there is an opportunity cost, and I have never gotten quite as comfortable with the later as I am with the former.

April 2021 – Life Update

Once again, I have been missing in action in terms of posting. However, to be fair, I did try to set expectations for this in March when I shared that April was going to be a brutal month on all fronts…

1) Applying to medical school – In terms of completing the final prerequisites for applying to medical school, it’s really just a full on sprint to the finish line. Over the next seven days, I have five exams, several of which happen on the same day. The key here is prioritization.

The AMCAS medical school application widow opens on June 1st. This is the official start to the application season. Not to be overly cliche but “Where did the time go?” It feels like December 31st was not long ago and I was fretting over whether or not to go for it. For the moment, my plan is: 1) finish the semester, 2) take the second semester of organic chemistry, in person, over the summer (May 24th – July 14th), 3) study for the MCAT (July 14th – August 30th), 4) sit for the first September MCAT exam, 5) finalize applications by the end of September, 6) and pray for interview invites.

I have a friend who is already in medical school and she has remarked several times, “The hardest part of medical school is getting in.” I can’t imagine this is actually the case. However, it does often seem this way because you have so little control over the application process. Everything is incredibly subjective and highly dependent upon the medical school admissions committee and what kind of class they are trying to build…which is dependent on the changing needs of the medical field and the academic interests of their preceding classes. The best you can do is apply to schools that are a good fit and interview well.

2) Dating – Still not much happening on this front. Dude Avery and I have been in less contact. I think he remains on the fence about my decision to continue staying with my parents. To be fair to him, he doesn’t know my entire financial picture. That is, he knows I have student loan debt but he isn’t aware of exactly how much I have. And not because he hasn’t asked. He has. I have decline to share up to this point. I think talking about your debt with someone is incredibly intimate. Surprisingly, more intimate than many other things… In fact, in many instances, you are physically intimate with someone long before you would share the details of your finances with them.

Further, like a lot of logic oriented people, he tends to be emotionally dispassionate about finances. Which is probably a good way to be. But that’s not who I am. Or at least not where I am with my student loan debt. I could see him making an entirely reasonably comment about my student loan debt that inadvertently hurt my feelings. And, I just don’t have the energy to invest there at the moment.

3) University B – I have been grateful that my work at University B, for the most part, has been fairly easy to do while taking classes. Much of this is because my role at University B often requires that I work on evenings and weekends which means that I get lots of “comp” time. Comp time has allowed me to take time off during the work week when I need it to attend class or study. The end of the semester at universities means lots of reporting and that will ramp up in May, but I am hoping to get the bulk of it done between the end of my classes in April and the beginning of my summer class in late May.

4) Living at home – Continues to be pretty great. I finally broke down and shared with my parents that I am applying to medical school. I was afraid to share it with them previously because I was still on the fence but I finally admitted my plans in full and they were, unsurprisingly, very supportive. They even suggested that if I got into medical school in a nearby city, I could continue living with them to save money. That…that will not be happening. But I love them so much. For now, the plan is to stay with them through the end of this year (2021). By December, hopefully I will know my fate with respect to medical school.* If I am accepted somewhere, then most likely I will continue to stay with them until I move for the start of medical school in the summer of 2022. If I am not accepted somewhere, then I will start apartment hunting.

*Possibly not the case at all if I decide to also apply to D.O. (doctor of osteopathic medicine) programs as their application season doesn’t start until September and doesn’t end until March.

5) Consulting Work – This continues to be a balancing act. I have accepted a second project that will take me through the end of May but I will not accept any new work over the summer. I know! It doesn’t really seem as though I am in a position to be turning down lucrative work. However, taking the second semester of organic chemistry over the summer will be very intense, and other than work at University B, which is much more lax at universities during the early summer, I want that to be the only priority.

I know it’s pretty bland but that is my life at the moment. I have continued to make good progress on the financial front thanks to the free rent afforded by my boomerang child status (yea, I accept that it applies) and my May 1st update should show me still on track to pay off PSL 3 in June.

April 2021 – Student Loan Balance(s) Update

Nothing worthy of a preamble. To the numbers…

AccountDebtMin. PaymentInterest Rate
Private Student Loan 1$0.00$110.460.000%
Private Student Loan 3-$6,136.07$153.826.620%
Private Student Loan 4-$9,549.80$245.403.750%
Private Student Loan 2-$7,046.73$93.305.120%
Federal Student Loan 1-$21,440.37$0.006.800%
Federal Student Loan 2-$13,946.84$0.005.310%
Federal Student Loan 3-$11,184.47$0.006.800%
Federal Student Loan 4-$7,748.09$0.004.450%
Federal Student Loan 5-$5,561.12$0.004.450%
Federal Student Loan 6-$3,147.30$0.005.600%
Federal Student Loan 7-$2,863.10$0.004.660%
Federal Student Loan 8-$2,457.12$0.006.800%
Federal Student Loan 9-$2,307.18$0.006.800%
Federal Student Loan 10-$2,003.02$0.005.600%
Federal Student Loan 11-$1,639.01$0.006.800%
Federal Student Loan 12-$1,144.25$0.005.600%
University Student Loan 1-$3,935.56$60.418.000%
University Student Loan 2-$3,090.59$0.000.000%
University Student Loan 3-$537.00$30.008.000%
University Student Loan 4-$339.39$30.008.000%
Total-$106,077.01$723.39

March 2021 – Student Loan Balance(s): -$108,604.18

April 2021 – Student Loan Balance(s): -$106,077.01

Total Payments: $2,657.31

Net Difference: $2,527.17

Not bad! Only $130.14 went to servicing interest this month. The combination of low interest rates, the federal student loan interest rate abatement, and temporarily living with my parents means that the interest accruing on my loans is the least it has ever been and I have the ability to make the largest payments I have ever made.

Student Loan Target Update

Four months ago, I took the advice of the Pennyfolk and began targeting Private Student Loan 3 (PSL3) for aggressive repayment. I had a list of reasons for why I hated this particular student loan, the least of which was it’s egregious 6.65% interest rate at a time when interest rates were at an all time low. Unsurprisingly, one of my 2021 Financial Goals is to payoff both PSL3 (-$10, 666.59 as of 1/1/21) AND Private Student Loan 4 (-$9,997.13 as of 1/1/21). So, three months into 2021, am I on track to meet this goal?

March 2021 – PSL3 Balance: -$8,454.39

April 2021 – PSL3 Balance: -$6,136.07

…I think I am. If you read my April 2021 Budget post, then you know I shared that given my current progress, I should have PSL3 paid off in June. However, what I didn’t notice until I began writing this post is that paying off PSL3 will also bring my overall student loan balance under $100,000.00. I. Know.

Thank you all so much for the continued support and check-ins. You have no idea how helpful it is to have a place to share the highs and lows of debt repayment.

April 2021 Budget

As promised, my April 2021 budget. Usually, I’d just drop this here and say the budget is pretty self-explanatory but a lot has changed since my last posted budget in December 2020 (apartment flooded and I moved in with my parents) so I will try to succinctly review those changes below…

Income

The biggest change in my income from December 2020 to April 2021 is that I no longer have a steady part time job. In, …I Quit, I explained the reasons why I thought giving up my part time gig was a good idea and, for the most part, I was correct. Much like in graduate school, when I decided my labor was worth more than $8.00/hour and I immediately found a gig where I earned double, something similar happened here. Soon after I quit, a mentor and friend told me of his plans to open a consulting firm; since then, he has began slowly but steadily sending projects my way. While these projects don’t pay at regular intervals (I get paid when he gets paid and he doesn’t get paid until after the work is completed) they are flexible, don’t take very much time, and pay a lot more per hour.

My income at University B has stayed pretty much the same. While I haven’t received a merit increase since my hire at University B due to my summer start date and the onset of the pandemic (apparently increases during the 2021-2022 academic year may be frozen as well), I was very fortunate to remain employed throughout 2020.

Fixed Expenses

No Rent –
The biggest change to my budget is that I no longer pay rent or other utilities associated with independent living, like internet (utilities and even laundry were included in my stupidly cheap rent…sigh). However, it was obviously not possible or advisable for me to try and fit all of my belongings and furniture into the room I occupy at my parents’ home, so I now have a storage locker and renter’s insurance. The storage locker is fairly reasonable at $55.00/month for a 5×10 unit with a local business; and, they gave me 50% off the first three months of rent. In my haste to be out of my mildewing apartment, I almost purchased the storage facility’s renter’s insurance at $10.00/month for $2,000.00 worth of coverage. However, the manager was pretty great and allowed me to pay just the rent and provide him with proof of insurance before the next month. This gave me time to call my auto insurer, who was able to get me a rate of less than $10.00/month for $10,000.00 worth of coverage.

University Student Loans – Some eagle eyed readers will notice that this is the same payment amount I have previously been making despite my belief that I could get these deferred while in school. So, it turns out that only one of my university student loans (there are four) can be deferred without interest if I enroll in school for any number of credits. The other three only defer without interest if I enroll full-time. (The difference is apparently in the donor language as many of my alma matter’s university student loans result from alumni et. al donations). You may be thinking, “But Afro Penny, if one of them can be deferred without interest, why are you still making the same payment?” Good question. Mostly because the forty dollar difference wouldn’t mean very much to my overall budget each month (or even in terms of my ability to repay PSL3) but over a year, the additional forty dollars per month will help to painlessly but meaningfully chip away at the other three student loans.

Car Payment – I already wrote about this in another post. I will not sport with your intelligence by rehashing my decision making here.

PSL4 – Unlike PSL3, which I actively hate, I have always been somewhat fond of PSL4…if one can be fond of a student loan. The terms of this loan have always been very favorable in terms of interest rates and benefits. This loan automatically deferred when I began taking classes part time, and in discussion with the Pennyfolk, I have decided to just make interest payments (I pay $45.40 each month which is technically more than interest but the minimum payment was $245.40 and I like round numbers) and put the lion’s share of the minimum payment towards PSL3. At the moment, I believe I will make my first aggressive payment towards this loan on July 1st.

PSL2 – No change.

PSL3 – Big changes here. I have maintained the minimum payment on this loan despite changes to interest rate (due to the pandemic) and loan repayment terms (due to my aggressive payments advancing the due date). At the start of 2021, I envisioned being able to put an additional $1000.00 a month towards this loan. While this would be significant, it would not be enough for me to pay off both this loan and PSL4 in 2021, unless I serious hustled for consulting work. However, now that I am no longer paying rent, I can add my $700.00 rent payment to this amount, resulting in an additional avalanche-snowball payment of $1,700.00 dollars each month. This is a game changer and I now expect to pay off PSL3 in June!

Cell Phone – This is new. My parents were previously paying for my cell phone bill as a part of their family plan on Verizon. That bill was over $200.00 a month for limited data. Ummm…no thank you. At the start of the New Year, my parents wanted to upgrade from their gently used six year old phones (yea…I know) and I pushed for them to leave Verizon at the same time. They listened to me and are now on T-Mobile’s 55+ plan, paying a flat $70.00/month for both of their lines and unlimited data. I then picked up my own line with T-Mobile for $70.00/month with unlimited data. There is no real contest in coverage. Verizon’s is just better. However, for the $130.00 in saving each month, my parents are pretty happy with the switch.

Federal Student Loans – The Biden Administration has extended the interest and payment abatement on federal student loans to September 2021. I am almost as grateful for this as I am for the free rent at my parents’ home. Almost. What this means is that about $400.00 worth of interest does not accrue on my student loans each month; and, the difference between my student loan payments and the net decrease in my student loan debt remains very close. At the moment, payments on these loans will remain paused until at least the end of the year when I have paid of PSL3 and PSL4.

Insurance – I explained above that I purchased renter’s insurance to cover my storage locker. Another small change is that like many driver’s across the nation, my auto insurance premium has temporarily decreased due to pandemic rebates for less drivers on the road.

Unfixed Expenses

These have fluctuated a bit but are pretty much the same. While I shouldn’t have anything in the “unplanned spending” category, a HSP plan incentive challenge at work has me doubling down on my commitment to exercise more. The University is currently offering $225.00 in incentives for their current challenge. Walking more means I needed to ditch my cute, but not super functional, Adidas, for a pair of Brooks. I also found a couple of great deals on Christmas gifts for my mother. She has an unusual collection and the items are difficult to find. For this reason, I look for them throughout the year and buy when they become available.



And that’s it. I expect this budget will look much the same through at least June of 2021. However, each month, I will try to review major changes in income and expenses from the projected budget where it happens.

The so-called “Boomerang Child”

Oooooo-kay. It has been some time since I posted a budget. There was some laziness at the beginning of winter, followed by the unexpected flooding of my apartment, and me moving out of my apartment and moving in with my parents. The winter was…eventful, but I am looking forward to spring. Because my finances have finally settled since the move and I generally have a good idea of what my monthly expenditures will be, while living with my parents, I decided I would post a budget forecast for April (and I will). However, before I could do that, I figured I finally needed to address what it means to live at home, for me. I need to address it because I find that when I don’t work through how I feel about something that is tied to my finances, I often make a rash decision that is usually not in my long term best interest.

So…I hate the idea of being a boomerang child. I was entirely unaware of this word or that it might be applied to me, as a result of my present living arrangement, until Dude Avery began heckling me about it (he really is the worst). The barest amount of research found that the most common definition is: boomerang child (n) – an adult child returning home to live with their parents for economic reasons after a period of independent living. I think the reason this gets under my skin so much is because it implies a level of financial irresponsibility or parental overindulgence that has often been used to talk about millennials. To me. (I recognize that it may often result from an instance of genuine need or convenience of care for others).

As an incredibly independent person, I think I bristle at the implication that I am currently staying with my parents because I have not been financially responsible or do not have the means to live independently. This is simply not the case. I was a senior in college in 2008 when the recession hit. I watched many folks of my generation not get jobs after college or move back home with their folks (this is probably definitely what I should have done). But I got a job, lived frugally, and continued living on my own after college. AND took no meaningful steps to pay back my student loans for almost a decade. But that’s old news.

Further, while I still have significant student loan debt, I am fairly frugal, and on the advice of the Pennyfolk, have an emergency fund of $5000.00 set aside to address instances like this. The point being, even if I have not made the best financial choices in the past, for at least some time now, I have been a financially responsible person and my financial situation isn’t precarious enough to necessitate that I live at home. (I recognize there are some that might disagree).

Stepping off my soapbox, I also recognize that while this definition may not have been initially applicable to my reason for staying with my parents, it certainly would become applicable if I decide to remain living with my parents once the pandemic lifts…which is something I am considering. While my April budget will go into greater detail, while staying with my parents, I am able to put an extra $1,700.00 towards my student loans each month. This means that even without an extra job or consulting work, I could easily have both PSL3 and PSL4 paid off this year while cashflowing the application process to medical school.

What to do? My parents have been incredibly amazing and I have far more independence and alone time than I could ever have imagined. Overall, I am very comfortable and the anxiety I had about moving in with them has entirely dissipated. At the moment, staying through December, which would allow me to payoff both loans and likely know where I stand in the medical school admissions process, is very tempting. If I stayed and were accepted to medical school, then it is likely I would continue staying with them and move out the following June/July to go to school. If I were not accepted, then I could find a place on my own early in the new year. Before I make a final decision, I will have to have another talk with my parents…

I will also admit that some of this is coming up right now because of a conversation I had with Dude Avery last night. He is exceptionally annoying and has been playing both sides of this decision from the beginning. He suggested back in 2020, mid-pandemic, that instead of renewing my lease, that I move back home with my parents to pay off my student loans. At the time, the idea was appalling to me and I wouldn’t even consider it. Six months later, my apartment floods and I do just that. He then suggest that I not look for a new apartment and instead stay with my parents for as long as I need, and focus on paying off my debt. (Note: Dude Avery has made all the right financial choices in life, and is very frugal). However, last evening, Dude Avery wants to know when I am planning to move out of my parents home and back into the city. This felt like whiplash and I didn’t really know how to respond. While more context for our relationship would seem useful here, I don’t really feel like this is that post. What I will say is that Dude Avery lives in the city.

Ugh. I will make a decision about this, one way or the other, soon.

March 2021 – Life Update

Alright. I realize that I owe you all some explanation as to where I have been, what I have been doing, or, at the very least, why I have fallen all the way off my New Year’s resolution to post weekly. The truth is fairly simple: I have been busy, tired, or wanting for a subject about which to write. More specifically…

1) Applying to medical school – Also in my New Year’s Day post, I announced that I was going to continue to move forward with my long deferred plan of applying to medical school. This is still happening. However, I am SO VERY BORED in my classes and almost failing. Of course by “almost failing” I mean getting a “B” in both physics and organic chemistry* but in the world of medical school applications the hyperbole is warranted. I am trying to engage my coursework with some level of intellectual curiosity, but on most days it just feels like hoops and busy work.

*Note: I might be less stressed if I has listened to C’s sage suggestion to just take one course. But of course I didn’t. Instead, I enrolled in two courses, each with their own separate in-person labs, with different instructors, which feels like four courses.

2) Dating – While dating during a pandemic is already pretty rough, it’s even rougher when you are back at home with your parents. While my parents are pretty darn awesome and have given me tons of space, I haven’t quite made peace with being a boomerang child (I prefer the U.N.’s “displaced person” due to natural disaster…I know); and, telling someone you just met that you are in your mid-thirties and staying with your parents is pretty much a red flag no matter how you spin it. I do have a guy that has been lurking in my life for some time now (years) but I am mostly trying to pretend I am no longer attracted to him. We will call him Dude Avery for future reference.

3) University B – I am a bit overwhelmed by work at University B at the moment; less overwhelmed by what needs to be done and more overwhelmed by my lack of real control over it. Unfortunately, when I was bored last semester, before I decided to chase my medical school dream, I allowed myself to become over involved at work. If I weren’t taking classes, it would be more than manageable, but at the moment, I am feeling tired and undervalued. My supervisor recognizes this and has given my team a couple of “comp/mental health” days that we have been able to use instead of vacation but the students still need a lot of attention at the moment and they have begun to significantly creep into my personal time. The advice I have received from mentors is to pull back, which makes sense, but I haven’t figured out how to do that yet. For the moment, my plan is to let one or two things (committee assignments) to find their natural semester end, and to abstain from serving in the summer and next year.

4) Living at home – It has been pretty awesome. Unfortunately, my parents aren’t letting me pay for anything at the moment (I still forcibly buy groceries and other stuff for them), but as I have shared in the past, they are aware that I still have some student loan debt and want to support me in this way to help pay it off faster. Originally, the plan was to sign a new lease for June 1, 2021. However, now I am not so sure… (Note: My parents are very happy to have me at home and have encouraged me to stay for as long as I like.) Ultimately, I think this will be determined by the success or failure of my application to medical school. If I fail to gain acceptance to medical school, then I will certainly move out and move on with my life. However, if I am admitted somewhere, it will necessitate a move and it might make more sense to move then as opposed to moving for less than a year only to move again.

5) Consulting Work – So after I decided to apply to medical school and I moved in with my parents, I mostly set my New Year’s plans of aggressively chasing consulting work to the side. Applying to medical school meant I didn’t have the time and living with my parents meant I could achieve my immediate financial goals without it. But because life never cares, a good friend and mentor decided to open his own consulting firm and has been steadily tossing work my way. While I have helped him in the past, ad hoc, he has decided that he wants this to be his primary source of income and wants to step away from University B at some point in the near future. We had a meeting with a client this morning and later this afternoon he text me, “…There is actually a much longer year long engagement we are starting to talk about. I am pretty sure I will have (sic) an intellectually engaging opportunity for you that will help to chip [a]way at those student loans.” Yea. More on that later…

So that’s it. That is where my life stands at the moment. I have been making good progress on the financial front thanks to my new living arrangement, the ongoing pandemic, and fairly low spending. You will see this reflected in my April 2021 – Student Loan Balance(s) post.

March 2021 – Student Loan Balance(s) Update

To the numbers!

AccountDebtMin. PaymentInterest Rate
Private Student Loan 1$0.00$110.460.000%
Private Student Loan 3-$8,454.39$153.826.620%
Private Student Loan 4-$9,564.89$245.403.750%
Private Student Loan 2-$7,109.52$93.305.140%
Federal Student Loan 1-$21,440.37$0.006.800%
Federal Student Loan 2-$13,946.84$0.005.310%
Federal Student Loan 3-$11,184.47$0.006.800%
Federal Student Loan 4-$7,748.09$0.004.450%
Federal Student Loan 5-$5,561.12$0.004.450%
Federal Student Loan 6-$3,147.30$0.005.600%
Federal Student Loan 7-$2,863.10$0.004.660%
Federal Student Loan 8-$2,457.12$0.006.800%
Federal Student Loan 9-$2,307.18$0.006.800%
Federal Student Loan 10-$2,003.02$0.005.600%
Federal Student Loan 11-$1,639.01$0.006.800%
Federal Student Loan 12-$1,144.25$0.005.600%
University Student Loan 1-$4,004.61$60.418.000%
University Student Loan 2-$3,090.59$42.430.000%
University Student Loan 3-$568.18$30.008.000%
University Student Loan 4-$370.13$30.008.000%
Total-$108,604.18$765.82

February 2021 – Student Loan Balance(s): -$110,210.06

March 2021 – Student Loan Balance(s): -$108,604.18

Total Payments: $1,739.59

Net Difference: $1,605.88

Not bad. I’ve reached a mini-milestone as I am now under $110,000.00. -$108,604.18 is still a huge student debt load, but each month it gets a bit easier to see my way out. March is going to be a decent student loan debt repayment month, and as of 1st of March, I have already put more towards PSL3 than the total amount I put towards all loans in February. Much of the huge initial payment in March comes from the fact that I am currently staying with my parents, rent free. More on that later this week.

At the moment, I am perhaps the most hopeful I have been at any part in my student loan debt repayment journey. At the beginning of the year, I set a goal of paying off both PSL3 and PSL4 by the end of the year with no real plan as to how I would accomplish this. There is now a plan. My life is incredibly busy right now and some days I am barely holding it together, but I am so incredibly hopeful.

My car. My car debt.

Okay. Let’s talk about it.

(This is not a photo of my actual vehicle but a car with the same make, model, and color.)

One of the things I appreciate most about this blog is that I can be entirely transparent about my finances…if not entirely transparent about my identity. I find this not only allows me to talk about the financial stuff I wouldn’t really feel comfortable talking about elsewhere but it also means when I am in need of financial advice, you all have a much more informed perspective than any person in my “real” life. However, when I was looking at my potential budget for March (the first budget for which I will not have apartment associated costs) I realized I needed to share it with you all as things have changed quite a bit. I then realized some things, like my car payment, would come as a surprise because I have never discussed it.

For my September 2020 – Student Loan Balance(s) post, I removed my car lease debt line from my reporting. At the time, it didn’t feel like such a big deal. The focus of this blog has always been about my journey to pay back my student loans, and my relationship with them. However, in hindsight, I could also see how that might feel like I am trying to hide something from you all. That was never the case. I just hadn’t made up my mind about what I was going to do when my car lease ended in early January, and I had already flip flopped, several times on the issue. I just wanted time to think about it.

Well, like all things, late December finally arrived and I had to make a decision.

I currently owe $13,856.43 on my 2018 Ford Focus. And for now, I feel like it was the correct decision. To understand that decision, I will share a brief history of my car ownership as an adult.

2012 – I had returned to the U.S. after several years spent abroad and lived in a place where I needed a vehicle. I bought a used Prius for $10,000.00. The car had a little more than 50,000 miles on it and was a good deal. While I owned the car, I moved several times, finally settling back into a city in which I have previously lived, very close to my best friend.

2014-2015 – I was actually sharing the vehicle during this time with my best friend. She was paying me half the car payment to have access to my vehicle for 50% of the month. While this worked initially, over time, it became annoying, and she decided to buy her own car.

2015 – I took my friend to the dealership to purchase (lease) her vehicle. My friend explained all the reasons that she was deciding to lease vs. buy and at the time, it all sounded fairly convincing. What I should have done was left the dealership and reflected on how very different my friend’s and my financial situations were. But I didn’t do that. Instead, I leased my first vehicle.

2015-2017 – While in graduate school, I once again become hyper-focused on getting out of debt (this has happened at various points in my life) and was upset with the idea that I had a car lease as I now lived downtown, in a small city, with excellent public transportation. I investigated lease buyouts, selling the car and paying off the lease, etc. I just wanted out. However, at some point, I decided I was heading back to the East Coast and moving to a city where I would once again need a car.

2018 – My car lease was coming to an end and I had a decision to make. Unfortunately, I had waited to the VERY LAST MINUTE and my car lease was ending in two days. You would think this would be the moment where I took a step back, re-evaluated, and made a different decision that I did in 2015. Right? You would be wrong. Instead, I allowed myself to be again talked into getting a second car lease. Ugh.

December 2020 – So here I am. Once again, trying to decide what to do about my expiring car lease. Looking back, I realized that if I had kept that Prius I purchased in 2012, it would have been paid off in 2017. Or if I had purchased that car I leased in 2015, the car would have been paid off in 2021. This time I did take a moment and took a step back. I reasoned that whether I get into medical school or not (please, oh, please let me get in) I am likely to live in a place where I need a car for at least the next ten years. When I purchased my car lease in December, it had a little over 35,000 miles on it and was a 2018 model. There is no way I could have purchased a used car in that condition for $10,800.00.* And I like my car. So I decided to keep my car.

For now, I am happy with that decision.
_ _

A few other things… I plan to continue staying with my parents at least through June (more on that later), when my classes end. Unfortunately, this means my round-trip commute to campus in now much, much longer. My twice a week commute is about 35 miles each way, with traffic. Ouch. Gas prices this far south are still relatively reasonable so the difference between rent and increased fuel costs is almost negligible.

I still want this debt paid off prior to my debt free goal day or prior to my 40th birthday. To make that happen, I have increased my monthly car payment to $300.00. Given how low the interest rate is (lower than all but one of my student loans) it just doesn’t make sense to move it up any further in my debt payoff order.

And finally, the difference between my car’s purchase price and the loan amount shown on my statement above is state sales tax, dealer fees, registration, and an extended warranty. The extended warranty was the only “optional cost”, but covers all non-tire related electronic and mechanical failures, including lost keys, for eight years. I think this was a good choice.

Student Loan Interest: 2019 vs 2020

Yeah, yeah, yeah…I’m going to save my excuses. I’ve decided that if I get one post up per week then I am meeting my posting goal.

Saturday, while working university programming, I decided to try and multi-task and get my taxes done during the lulls. My taxes are pretty straight forward and I usually qualify for one of the free tax filing services. Initially, I began my federal filing with TurboTax, as I have the past five years. However, this year, to complete the forms necessary to claim the student loan interest tax deduction, the software prompted me to upgrade to the Deluxe version, which would have cost me $40.00 for my federal tax filing and $40.00 for my state tax filing. Ummmm…no. While I like the TurboTax software, and the ease of having some of my data from the previous year imported, $80.00 seems a bit excessive for such a simple return. It takes me less than an hour to file my taxes and my time is yet to be worth $80.00/hour. So, while I didn’t finish filing my taxes (I found other software that includes the educational tax forms in their free version), I did get close enough to being finished that I noticed the following:

Wow. So, I don’t know how it escaped my notice that in 2019, I paid $8,066.00 in student loan interest. This does NOT include the interest that accumulated on my federal student loans, which did not require payment on the income-based payment plan, and instead CAPITALIZED on my federal student loans. Ugh. Maybe I just didn’t want to notice?

In 2020, the onset of the COVID-19 pandemic significantly lowered interest rates and I only paid $2,519.00 in student loan interest. This was buttressed by the fact that in March 2020, the U.S. federal government created an interest and payment moratorium on federal student loans which meant the only interest that accrued on them, to be subsequently capitalized, is the interest that accrued between January and March 13, 2020.

For the 2020 tax year, the student loan interest tax deduction allows you to deduct up to $2,500.00 in interest paid from your taxable income. For obvious reasons, while not paying any interest is the best, the less you have to pay over $2,500.00 the better. This year, I was very fortunate. $2,519.00 in interest payments is not great by any means, but given the amount of my outstanding student loan debt, it’s not terrible. However, $8,066.00 in 2019 is ridiculous. This is the amount I actually paid to my student loan lenders. Two months of my GROSS income. I worked for two months in 2019 just to service student loan interest. Yea. …a slave to the lender.

I don’t really know what to say. Put in the terms above, I am so incredibly angry with myself, and sad. The most hopeful thing I can say in reflecting on that number is that 2019 is a peak on a downward slope.