My student loan debt is gone

By Stew

Last month I made the final payment on my federally subsidized Stafford loan.

I graduated from college with a relatively small amount of student loan debt. Due to the fact that my parents started to make me save for college from the age of eight years old, I paid cash for my first year of enrollment at a private college. After that, I financed my own education by working during school semesters and on Thanksgiving, Christmas, Spring and summer breaks. I managed to finish my undergraduate degree with only $7,000 in student loans. I then immediately enrolled in graduate school which I financed by working as a graduate assistant. Payments on the $7,000 were deferred while I was enrolled in graduate school, but I still managed to pay off $2,000 before finishing my masters. That was the spring of 2001.

During the summer, I began making payments on my remaining balance of $5,000. The interest rate at that point was approximately 8.5%, but a couple of years later, I refinanced at 3.5%. Since the interest rate was so low, I only paid the minimum payment over the past nine years and focused on other, higher interest debt. I only made the $65 payment – until last month when I realized that I only owed  a little over $200 and decided to send a bigger check and be done with it.

Some thoughts:

I will be thirty-six years old next week and I am just now paying off a relatively small college loan total. I cannot imagine how long it will take young adults who access student loan lines of credit in the neighborhood of $50, $80 or even $100 grand!

Debt is such an insidious thing, yet our culture thrusts it upon us as “okay” and “normal” and “necessary”.

I was raised to avoid debt, but even I have fallen prey to the “monthly payment” mindset.

For most of the life of the loan, the annual interest rate was only 3.5%. However, even though I often paid a little extra principle and ultimately managed to pay off the loan early, the loan still came at a total cost of close to $8,000. The reality is that I took $3,000 from my future (now present) family in order to have $5,000 in 1996.

Was it worth it? Well, I am thankful for my education and I think I received good value for my money. However, since college, I have not chosen the most high-paying profession. I do not regret spending the money on my education, but I do regret not trying a little harder to get through without any debt at all. I think I could have done it, but signing that $5,000 promissory note was just so easy at the time . . .

Now we need to tackle the remaining $10,000 balance on Mrs. Stew’s college loans. It will go faster now that we can pay down an extra $65 of principle every month.

Article by Stew

Photo by meddygarnet

7 Responses (including trackbacks) to “My student loan debt is gone”

  1. Chris Says:

    Stew: If you don’t mind revealing, what was the process you used to refinance your student loans? I’m looking to do just that (my lender won’t restructure my loan) to lower my rate and term.

  2. Jackie Says:

    Congrats on getting that gone! It’s so easy to slip into the habit of just paying minimum payments because the interest rate is “only” x…

  3. Stew Says:

    Chris, this was during 03-04 when rates were incredibly low . . . not sure that those deals are still in place.

  4. Khaleef @ KNS Financial Says:

    That is great news! It sure can be easy to look at the minimum payments – especially when they are that low. My wife and I had a combined $65k in student loans when we graduated – I have an MA and she has a BA – and I can’t wait to write a post like this one!

  5. Gina Says:

    Congrats on “another (debt) one bites the dust!” I have one more car payment then it is on to pay off husband’s car and 2 credit cards. I am begining to “see the light” and it doesn’t feel like an oncoming train anymore.

  6. Clean Credit Says:

    Feels good to get that one gone, I’m sure, and now you’re rolling the payments into the next one. Go, snowball! Congratulations, and you were fortunate to have the upbringing you did.

  7. Freedom Journey Says:

    Had to say “congrats!!” too! We have all our loans on deferment now while we a) try to stay afloat and b) try to pay off our credit & car debt. I long for the day I can post this too, as others have also said! :)