My $2000 Christmas Gift to the US Dept of Education

John Cook
John Cook
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

Image for post
Image for post

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.

October 2018 Loan groups C & E paid in full!

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!

Image for post
Image for post
Holla group A paid in full!

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!

This loan costs me $31 a day!

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!

Image for post
Image for post
Where did the money go!?

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.

Image for post
Image for post
Payment History as of November 2018

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!

Image for post
Image for post
My debt free journey

This story is published in Educated but Broke — a publication dedicated to helping you fight student loan and consumer debt by providing real-life, practical advice.

Subscribe to receive our top stories here.

Educated and Broke

Eliminate student loans, escape the debt trap and create wealth

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store