# My \$2000 Christmas Gift to the US Dept of Education

Nov 22, 2018 · 3 min read

As we approach Christmas 2018 I have the opportunity of answering the question:

What am I thankful for?

This year, i’m thankful that I continue to have the ability to pay down my massive \$170,000 student loan debt. On 11/19/18, a payment of \$2002 was posted to my loan servicer — EdFinancial which reduced my total payoff balance to \$165,549.15

# Let’s break it down

My student loans are currently in grace period until Feb 2019 but i’m still making targeted payments using the ‘snowball method’: paying my smallest loans first. In my last post , loan group C and loan group E were paid in full — each with an original balance of \$3,352.11 and \$4,148.07.

Note the last column is my ‘payoff rank’, this is how i’ve implemented my student loan debt snowball method. With 1 and 2 PIF (paid in full), group A is next! Here’s how the \$2002 November 2018 payment was split:

# Group A Paid in Full

First, I executed a manual payment of \$1,156.44 to group A. Group A loans originated from wayyyy back in 2005, with interest payments already applied, over 99% of the payment went to principal and like magic, group A is gone!

# Group B All Interest Payment

If group A paid in full was the good news, group B was the bad news and serves a reminder to potential student loan borrowers the risk of DEBT!

Group B is a single loan of \$18,170 with an outstanding balance of \$19,387.99. It has an interest rate of 6.319% which accrues from the day of disbursement. This loans accrues approximately \$31.46 of interest per day ((.6319/365) * 18,170).

This is also my first loan payment to group B ..ever! So what happens when you make an \$845 payment towards an \$18,170 loan that has \$1217 of interest accruing at a rate of \$31 day?

Answer: the entire payment is applied to interest!

Painful right?

# Recap and What’s Next

With 8 payments and 3 student loan groups paid off (see below), the small loans are all closed.

March 2020 is still the goal to be 100% student loan debt free. What about you? How’s your debt journey? Are you the master of your destiny? Clap and let me know!

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