I received this letter from a BIDER reader who was successful in ridding himself of the Sallie Mae monkey on his back.
Angel-
was looking at your blog today as i like to do from time to time. it is quite entertaining. :)
then i saw this article on yahoo and thought you might want to share it.
i would agree with it's basic premise--focus on highest interest debt first and concentrate on paying that off first with all excess money.
i knocked off a total of $47k of private loans in 18 months. now i am focusing on the fed loans, and in just 12 months (since the layoff last year) have gone from $62k down to $29k this past week. I should be done with ALL law loans by this time next year.
granted i still don't have cable tv or internet service at home, and drive a '92 honda hatchback, but i won't be paying when i'm 60 years old, for what may be perceived as a huge mistake i made when i was 25. :)
Good for you, BIDER reader! I hope that BIDER readers learn from your example. Unless, they up and move overseas and avoid repaying it all together. That's probably a better option!
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Congratulations to this BIDER reader. I love to hear graduates conquering their loan debt. It should give all of us in a similar boat some motivation to pay off these loans as quickly as possible.
ReplyDeleteHmm, I'll integrate this into my win the lottery/find a rich girl to marry plans.
ReplyDeletePay off the highest interest loans first? Durrrr. This is news to some people?
ReplyDeleteOkay, actually, yeah, I did have to explain this to one of my coworkers.
But really, the best advice this person has for paying off your loans is to have an extra $32k lying around at the end of the year.
Or you could move to Costa Rica.
ReplyDeleteBetter to be poor and free in Costa Rica than poor and debt-enslaved in America.
The advice of this person is 2 part. First, pay off private high interest loans first (derf derf). Second, drive a P.O.S. car and don't waste money on cable and internet (and other things that aren't absolutely necessary) at home when you have interest piling up.
ReplyDeleteSeriously, if you hunt around and move to the right area and can stand to live with a roommate, you can rent an apartment for ~$400/month. Sometimes less. Be savvy buying an old used car for ~$1200. You can get your 2000 calories/day for about 5 dollars. All told, if you are very frugal and careful, you can live on 700 dollars a month. If you make 50k a year, that's $41600 leftover each year. You may live like a pauper for a few years after school, but once you're clear of that debt you can buy a modest home and car and life is pretty good financially (you may hate your job though). This is assuming you have a "normal" amount of debt, around 100k, not some obscene 300k. The more debt you're going to take on the more you need to make when you grad, obviously. So if you take out loans to go to ivy UG and T5 law, you better be making that 160! Because, even living like a pauper, it'll take you 3 years to pay all that off.
Finally, if you don't want to live like a pauper for a few years after getting a "royal" education then plan to live like a peasant for decades. If you don't want to do that either, don't take out a bunch of loans!
Yawn. I guess shit never happens after that magic payoff date.Things like major illness, natural disasters and so on that can dwarf student loan debt. I hear you and
Deleteeven feel your pain. through a hail Mary I got out from under 115 of debt I paid on for a decade. my point? Things happen in life and any control you believe you have is a delusion in your own mind.
Currently, the rate is about 6.8% for federal loans. I can imagine that private loans are quite a bit higher. It is a goddamn disgrace that so many members of our generation are stuck in this muck. The other night, my wife was watching some game show. Two young people were on, and they both mentioned that they would use the money to put a big-ass dent in their student loans.
ReplyDeleteThe schools get paid up front, in full. Their "responsibility" ends at that point, as far as they are concerned. You are stuck with the debt for decades. This takes a big chunk out of your monthly/yearly income. And THIS is why I continue to take a cinderblock and smash the law school industry over the head. These pigs are living VERY well off of this scam.
Don't pay the loan. Default. When enough default change will happen.
ReplyDeleteI actually followed this strategy and paid off my debt (law school, undergrad) in 2008. I also drove a crap ass car, have no cable, cell, nada. I never went to a wedding, or traveled. My family/friends think I'm a technology hating, Neanderthal - but I kept explaining about the debt to no avail. Now I'm saving that same money to leave the country.
ReplyDeleteGood for you, anon @ 1:00PM! Paying off your debt and leaving the country? That's a win-win in my opinion.
ReplyDelete