Gone! Loan B – Girl Child sophomore year
$15,741.03 original loan amount
$2,343.18 capitalized interest (boo – stupid!)
7.9% interest rate (ouch)
$18,459.48 principal paid (with capitalized interest)
$5,568.68 interest paid (without capitalized interest)
$24,028.16 Grand Total paid
$495.36 average payment
Target payoff date: 03/2018 <– Two months early!
This loan has been on my payroll since my daughter started her sophomore year of college in September 2011 – 6.5 years ago. This was also one of the loans with the highest interest rate of 7.9%.
The entire time my daughter was in college, I was completely ignorant about how Parent Plus loans worked. During the first 2 years I only paid $1,443.95 on this loan – total. Then for the next year, I didn’t pay anything at all. Why should I pay if I didn’t have a payment due? Even after she graduated in May of 2014, they told me I didn’t have to start making payments for over a year due to payments made during the 120 day rule (accidentally on my part at the time), so I didn’t.
Meanwhile, almost 8% interest kept building and building.
Finally, in 2015, they started sending me a bill, so I couldn’t avoid making payments any longer. I started paying my minimum payments…and getting educated.
From that point on, I started throwing every dime I could find at these loans. I decided to use Dave Ramsey’s snowball method, which means I started with the one with the smallest balance. That also meant this one wasn’t at the top of the list. So, throughout 2015 and 2016 only minimum payments were made on this loan of $1,412.95 and $2,935.74, respectively.
2017 changed everything. I cracked down and paid off the first two loans on my list, which made this loan next in line. And since October 31st, I have paid over $16,000 to eliminate this debt.
Four years of college paid for, 4 to go.
And I have EVEN BIGGER NEWS.
The total I owe now for Parent Plus loans is $98,933.48 – FINALLY UNDER $100,000. Five digits – yay!
So, why do I feel like crying??? Wow, I didn’t really expect to feel this way when I saw the numbers. Is it relief that I’ve come so far? Is it frustration at how far I have yet to go? Is it because today is my last day in my 40’s?
Next up: Loan C – Girl Child junior year (which is the next smallest outstanding loan I have)
$17,481.69 original loan amount
$2,385.79 capitalized interest (boo – stupid!)
7.9% interest rate (ouch)
$15,085.98 current balance
Target payoff date: 12/2018
This one is going to take me all year to pay off, since I don’t anticipate any large extra payments until September (if I’m lucky enough to get a bonus at work again this year) or December. Then again, I didn’t expect many of the large payments I was able to make last year, either.