Today is an amazing day for me – I paid off my very first Parent Plus loan! For someone who, up until a couple of years ago, was completely ignorant about finances and swimming in consumer debt, this is an incredible feat.
Gone! Loan G – Boy Child, junior year
$19,494 original loan amount
6.84% interest rate
$0 capitalized interest (paid off while still in deferment – yay!)
$19,494 total principal paid
$1,632.78 total interest paid
Like many Americans, I wanted to give my children the best opportunities possible in life, at any cost. We hadn’t saved a dime toward college expenses, and since I didn’t know how else to pay for it, I took out a total of 7 Parent Plus loans: 4 for my daughter’s college tuition, and 3 for my son’s. (Senior year was paid completely with grants and scholarships, my son’s student loans of $7,500, and one $2,752 payment by me, so I didn’t have any Parent Plus loans for senior year.)
Part of the process of digging my way out of my first marriage was to educate myself about personal finance and budgeting, take ownership of the mess I was in, and develop a strategy to tackle the mountain of debt I now owned. All of this is really difficult stuff for someone who had never been exposed to techniques to manage personal finance and who had spent the last 25 years with her head buried in the sand. I was astounded to learn how much financial trouble I was in. I had a huge mortgage, car payments, RV payments, tons of credit card debt, and three times as much in college tuition bills. It became my mission to get myself out of this mess.
When I was married with a two-income household, it was impossible for me to scrape together $200 in a month to pay for anything extra. We had a serious spending problem. I knew it. It was obvious. But I couldn’t get any cooperation on taking control of our finances. I was swimming upstream. It was controlling us. Now, I’ve managed to eliminate my consumer debt, trim my expenses, and increase my income enough that I’m able to throw 10x that amount at these loans.
Day-to-day, it doesn’t seem like I’m making any progress; it’s just so incredibly tedious working all the time and paying and paying and paying. But lately, I’ve been able to compare my progress to where I was a year ago, or two years ago, and it’s honestly astounding.
Imagine what I could save if I didn’t have these loans to pay? Yes, it sucks that I have to throw that money away every month instead of saving and investing it. Yes, it puts a dagger in my heart when my friends are taking wonderful vacations, renovating their homes, and even retiring early because they saved for their children’s educations from before they conceived. Yes, it sucks that people shake their heads and tell me how stupid I am to finance my kids’ tuition.
But you know what? None of that matters to me. What matters is that my children have college educations. And I helped make that happen. And the sense of satisfaction knowing how far I’ve come educating myself about AND EXECUTING a financial plan is priceless.
Have I stumbled along the way? Absolutely. Could I have done better? Of course. Am I going to succeed anyway? You bet.
Two years of college loans paid for, 6 to go.
Next up: Loan A – Girl Child freshman year (which is the next smallest outstanding loan I have)
$14,662 original loan amount
$2,362.78 capitalized interest (boo – stupid!)
7.9% interest rate (ouch)
$15,937.57 current balance
Target payoff date: 12/2017