Interest

Happy Easter/Zombie Jesus Day.  My husband has duty today and I haven’t “celebrated” since I was a kid. Maybe I’ll have more chocolate than usual?  Feeling kind of glum after doing some Sallie Mae math today.

In the entire year of 2012, Sallie Mae reported they received about $10,336 in interest (according to my 1098-e form).

In 2012, I paid a total of $5541 towards my private student loans.  Of that $5541, nearly 84% of the payments, or $4634, went towards interest.  A whopping $907 went towards the principal.  I have a long road ahead of me!

If Sallie Mae received $10,335, that means the gov’t paid $5702 in interest last year.  Under the Income Based Repayment Plan, if my monthly payments do not cover the interest, the gov’t will cover interest on subsidized loans for the first three years.  I believe this will be the last year that the gov’t will cover my interest.  Under IBR, interest won’t capitalize, but it’s still a significant increase in the amount I owe, and the amount that would be forgiven in another 22 years…of which I’ll probably owe taxes on.

It’s moments like these that remind me just how royally screwed I am.  I can’t lose focus though.  I need to let this information fuel motivation to pay it all off quicker!  No way Sallie Mae is getting the 235%+ interest they expect from me!

For all the college-bound folks reading this…If there’s ever a time you learn from someone else’s mistakes, let it be now!  Borrow wisely!  Pay as you go!  Or save until you can really afford to go!  Student loans are not good debt!  Avoid it like the plague!

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6 thoughts on “Interest

  1. Hey Kasey
    Hang in there! You’re definitely headed in the right direction! Student loans is what did me in, too. I’ve been paying on them since 2003 and I still have another few (hundred) to go. Cheers and happy Jesus Zombie day to you. 🙂

    • How long did it take to pay it off? I can’t even imagine the utter joy I’d feel sending in my last Sallie Mae payment! It’s still so far off but I look forward to that day!

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