Student Loan Payoff

Specifically the savings and the new end date. I know the "real savings" is a crap shoot due to inflation but that's a sizable chunk of interest saved and a time cut off. It's not precise. My overpayment amount could change, but it's nice to know there's progress to be paid.

There's a light at the end of the tunnel and it's not a train!
as a follow up to this post, I've been digging into how I can make that look less miserable. I found Karl's Mortgage Calculator, which was recommended somewhere. I put in the numbers I've been using and got the following:

Death by interest

No doubt an awful title due to some people's financial situation causing them to think death is preferable but seeing how much of my payment goes right to interest hurts. I'd never be making any headway if I was only making the minimum, and I don't feel like I'm making much headway now!

The 11/20, 12/16 and 1/27 payments are all extra payments. I'm still trying to figure out whether immediately after or immediately before the full payment posts is the best timing of an extra payment to have it hit principal the most (I don't have the option to apply it right to principal).

Total due: $60,149.28 as a pay-off amount. It's better than the 60,351 that was my pay-off amount at the end of December, but still. And no, I don't think I'm actually going to pay it off, but I use that in tracking Net Worth. 

And yet I'm considering going back to school in 2010!

83 cents!

Got a letter today from Direct Loans and I was surprised, wasn't expecting any notification re: my consolidated loan. It was notifying me of a change in my payment amount. Previous payment was $382.84 and now it's $382.01 Whee, 83 cents.

It's fairly irrelevant for me, I always pay at least $450 and try to pay closer to $500 but it's good to know what "catch-up" I have to make in order to make it add to that amount. I honestly wish they'd take the postage, printing and labor costs that it takes to send all these notifications and just subtract them from the cost of my loan. It's NUTS that they don't allow you to receive e-notifications if you're enrolled in automatic debit.

On another note, sold back some books at Strand today and made $35. W00t!

Dental Max

As I mentioned a few weeks ago, I found some unspent dental monies and since I wasn't eligible for the rollover (have to have $799 or less in claims) I decided to spend it poste-haste. Or rather put in a claim since it had already been "spent" and paid on my AMEX in August. Very happy to log in and see that a check has been cut for $673, the remainder of my eligibility. 

Debating where to put that since the root canal itself is on a 2.9% for life, which I've been paying down. I guess per the snowball I should put it at the 3.9% one, but I don't religiously snowball, instead pay over the mininum on both. Thinking about being better at SNOWBALL for 2009, or better yet throwing this as an extra principle paydown on my student loan. Decisions, decisions...

FSA Open Enrollment

Yeah I've been bad, both posting and spending. Or bad about not spending. 

Cancun was fabulous and I actually came in way under budget there, which was good. Yay. Christmas shopping is over budget and I'm not done. Since I have extra in the "Cancun fund", I may put that money towards it since it's not earmarked for anything else. I also payed an extra $110+ toward the principle for my student loan, woohoo. Baby steps.

We had a presentation this morning from our benefits reps and I found it to be worthwile. The main reason I haven't used up my FSA contributions is apparently that I didn't realise how it could be used i.e. co-pays and uncovered medical/dental expenses. So now that I know that, and I know what the dental bills I'm facing are (more on that in the next post), I think I've worked out how much I'm going to contribute. I found this calculator to be great for breakdown of what the tax savings, etc. will be.

Plus they announced today the grace period until March 2009 to use 2008 monies, which makes me happy. I was not looking forward to stock piling OTC meds to use up the monies.

I'm here....

Life's just seriously gotten in the way of late. On the plus side, it means I've been too busy to spend money. On the minus side, I can't remember the last time I made it to the grocery store and have been buying lunch and eating out way too often. Eek. I'd like to say December will be better. The trip is pre-paid and I have a special fund set aside (included in the Networth) for the expenses i.e. food, so there is going to be a dip, along with that which will come with Christmas spending, so we'll see. 

I admit, as bad as it is, I can't wait for my tax refund to clean up some. In the mean time, the above could have been worse. Far far worse. That said, making a $450 (includes extra to pay down principle) student loan payment hurt but it felt so good.

Non-progress

aka $30.20 in almost six years.

I just had a look at that in my student loan documentation. While I don't think it's that bad, I think there was another loan consolidated in with "B" to make the starting point for "C", it looks as if I really didn't make much progress in almost six years. I did defer student loan payments while in grad school (the above is my undergrad consolidation) and did not pay the interest accruing at the time (hindsight: I know) but I didn't realise the non-progress it would result in. Oy.

At least that one still lets me log in, my log-in for Citi student loans no longer works post consolidation. Weird.

Officially consolidated

Welcome, xxx. As of today, October 21, 2008, your application has booked. Your loans were paid on October 16, 2008. The Direct Loan Servicing Center will mail notification about your new loan repayment. Contact Direct Loan Servicing for more information about your application.

2 months and 11 days but it is done. I haven't yet received my coupon book, but I'm looking forward to it.

61,171.51

I finally got the summary sheet for my student loan consolidation today. I'd applied for consolidation on August 5th, and I'd really begin to wonder with the recent melt down whether or not Direct Loans would remain in the consolidation business when most of the big banks and even Sallie Mae have pulled out.

I'm glad to know that in the two months and five days since I applied, my summary wasn't far off from my estimation. I knew I was around 60K, so 61, 171.51 isn't far off. I know there are rules of thumb for the amount of student loan debt you acquire vs. starting salaries and while I don't remember what they are exactly, I'm comfortable with where I am now - noting this approximately 25% undergrad remains and 75% grad school. Given the annual cost of NYU, I'm happy with how I came out. I worked through both years of school and had ~10K in scholarships, all of which helped. 

I love the repayment options they give, hope the formatting remains here. I've left off interest rate since that remains the same for all: 6.5% as well as initial loan amount because that is also a constant. I'm not sure whether there are any on-time, auto-pay incentives available through Direct Loans. There is also the income contingent plan, which they did not detail for me since I didn't select it.

Plan # Payments Initial Payment Max Pay Interest Total

Standard 360 $386.64 $386.64 $78,019.39 $139,190.90

Graduated 360 $331.34 $579.96 $79,767.04 $140,938.55

Ext. Fixed 300 $413.03 $413.03 $62,736.99 $123,908.50

Ext. Grad 300 $331.34 $619.55 $64,805.85 $125,977.36

There's something a little cockeyed there since extended should be longer term, but it's not. That said, I can see the benefit in just an extra $26.39 per month in terms of interest paid in the long term. There's a new car in the difference there! While I'm lucky (?) enough to live in a market where $140K is going to buy me nothing,  I can see how people would see this as a mortgage.

There's no pre-pay penalty and my plan was always to pay more than the minimum and have the extra applied to principle. Now that my 2.9% is sorted, this is my highest interest. That said, I think I know how much I need to apply to loan/debt-repayment each month. I don't have a pay off date, but I like having a plan.

Off for the weekend -- not driving and spending gas and wear and tear... I'm taking Peter Pan to Boston and then the T/bus. 

Investing

I have my salary set up so that 6%/paycheck gets diverted to my 401(k). I never see it, don't know it's gone mentality. However the roller-coaster that the market has been on for the last month makes me hesitate to physically make the decision/click to transfer funds to my Roth IRA. 

While I know losses will be recouped and I have time for my retirement, I still feel I'm better off paying off/down debt and making visible progress rather than having that investment wiped out when the stock market blinks. That said, I need to better research the funds that my Roth IRA are in. They've done essentially nothing since April 2007 when I bought in an uneducated manner -- i.e. broker told me to. Eek.

Also,  will be two months Sunday and my student loan consolidation is still in the cert phase. What.A.Mess!

Student Loans, Balance Transfers

No, not really connected...

I'm glad I started my loan consolidation application back in August because per the website, it's still in the certification phase. I'm paying on the two that are out of deferment and lacking a grace period (graduate PLUS loan, consolidated undergrad loan) but still have time before the grad staffords kick in, I'm glad for that. Keeping track of three payments a month would be too much.

I was curious as to whether delays were common with a lot of the commercial lenders dropping out/being forced out of issuing consolidation loans, but most of what I find is from two years ago and connected with the July 1, 2006 rate increase.

Keeping track of multiple payments a month is annoying, therefore I'm not sure what I'm going to do about the following. I currently have:

• ~8K at 3.9% for life on an AMEX blue. I've paid it down from ~12K in the last year and I'm happy with that progress especially since it was while I was in school. I don't add to this card, it's purely for the BT offer.
• ~4K at 14% on my Starwood AMEX. This is my everyday card and its balooned since July. I'm annoyed but it's not frivolous stuff, it's the move and dentist. Still, 14% isn't trivial and I can do better especially given my excellent credit. I'd also like to return my SPG Amex to daily use for its good rewards.
• ~Miscellaneous immediate payoffs on an AA Visa and Chase Amazon Visa that I have on hand for places that don't take AMEX. I pay this off immediately.

Prior to consolidating to AMEX last August, I had ~12K split on a Discover and Citi card that were 0% for one year. I hated having to pay on both so when the 0% expired I happily consolidated to one. While the 0%s still exist, they're harder to find and I'm not sure I want one. If they were more than a year, sure, but I'm tired of teasers - especially those with annual fees that kick in later so I cancel the card and lose the history. I'd rather find a comparable offer like my AMEX above.

Before I was even thinking about this seriously, I got a 3.9% for life from one of my current, unused cards. I like this idea because it doesn't require an inquiry on my credit report and I know what the limit is without worrying "well I might only be approved for $3K or so." I also regularly get one from my Chase Amazon but I don't want to tie that one up with a BT because I like using it for the occasional Amazon purchas for the rewards. I think I'm going with the 3.9% (even with the transfer fee, it saves $ over two months and I know I can't pay it off that quickly) and just pay it down as fast as I can via snowball.

Approval amounts bug me. I've never ever been late and am never anyqhere near my limits. My SPG Amex is a 25K limit and Blue is 12K. Citi irritates me with its trivial limits.

Key Issue: Student Loans

In addition to the other expenses associated with city living, I, like many, deal with student loans. I'm in the process of consolidating my loans which consist of:

• undergraduate consolidated loan. Approximately 13K 
• graduate Stafford loans (unsubsidized and subsidized): 39K
• Graduate PLUS loans: Approximately 8K

Not too bad given that I went to two private schools. I'm happy with that total especially since I landed a job in my field prior to graduation with my MSc. I think I made the right choices with respect to working while in school, living at home to save money on rent and food and other items. 

I was tossing up whether or not to consolidate and finally decided the convenience of one payment a month where I could pay over the minimum far outweighed making over the minimum on three separate loan accounts just to pay down principle. While there is the risk of paying more over time in a consolidation loan, I think I will be able to pay it off in far less time, mitigating some of that extra interest. I want to pay it off sooner rather than later because when I eventually move from Manhattan, I want to buy a house. I don't want to have these loans hanging over my head for the next 30 years and I'm willing to make sacrifices to make that happen.

I need to find out what my student loan payments are going to be (consolidated) so I can make a more accurate budget with respect to loan repayments, credit card payments, etc.