Monday, February 3, 2014

On Student Loans.

So, there you are, just swimming along, being awesome, minding your own business, patting yourself on the back for making it halfway through your first year of teaching without any major catastrophes….

And then one day you check the mail. It would appear that someone named Sallie Mae has sent you three notices inquiring about your intent to pay back the money you frivolously borrowed early in your college career so that you could buy Ramen Noodles and gas for your Dodge Neon. “Nothin’ but a thang” you said, as you signed documents of unknown origin in the financial aid office “I’ll be making big dollars with my fancy Bachelor’s degree in four six years from now…” 


Your younger self obviously didn’t plan for car payments, insurance, medical bills, phone bills, and the credit card bill you ran up the summer after you graduated when the aforementioned student loan money stopped showing up in your bank account (what’s that all about…?!)

Anyways, now all of a sudden you’re delinquent to the tune of $327.18 and currently have -$496.00 in your checking (that’s another story…). Also, you’re still eating Ramen Noodles, except now they’re the Kroger brand (not even the real thing!) You panic. You cry. You gorge yourself on Hershey's chocolate and Tudor's biscuits. Then, you put on your big girl panties and call this Sallie character.  

Fortunately, there are no late fees where student loan repayments are concerned, so technically upon realizing I was delinquent, I wasn’t really in as much trouble as I originally thought. The amount due ($327.18) was actually two months worth of payments, which meant that my monthly payment was roughly $182 (still more than I could afford). While I’m still no expert on the complication of loans... Here’s the good news: 

Sallie Mae seems to be a nice lady. You have options.

Deferment (aka: don’t do this if you ever plan on buying anything bigger than a flat screen TV).

Forbearance (aka: also don’t do this...although it’s a better choice than deferment).

Graduated Payment Plans (this nifty option allows you to pay a set amount each month, which increases every two years).

Income Based Payment Plans (this is when you pay what is determined by Sallie as an ‘affordable’ payment...based on your current income. It’s usually very cheap but usually the entire payment goes towards’s like running in circles).

Teacher Loan Forgiveness (this option is only valid after teaching for five years — you can apply to have $5,000 worth of your loan forgiven [or $20,000 if you have a math or science degree].

In my infinite wisdom  After I consulted with my mom, I opted for a graduated payment plan, where $15 monthly goes towards the principle of my loan (and the other $75 would cover accrued interest). Which means that I can continue to feed my EOS and nail polish habit.

In all seriousness, I'm proud to say that for the last two months I've done what I thought was impossible: created and followed a budget. While it really hurts to pass by Sephora and not purchase a single thing, I'm excited to know that I can have Sallie off my back in a little less than 36 months. I never thought I'd say that financial responsibility feels really good. 

I’m expecting to receive a letter in the mail any day that says “welcome to adult hood”… 

Happy Monday (and happy student loan paying!),