Making My Final Student Loan Payment

Matthew Gates 11m 2,698

The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.

The Last Payment of My Student Loans

When I graduated high school, I thought high school would be it. I finished and I would end up getting a great job, love it, and live happily ever after—meeting the girl of my dreams, falling in love, having children, and making it on $8 an hour with the potential for raises. That never happened. And although it took me 4 years to realize it, I was stuck in a dead end job with no where to go, no room for advancement, and just a number in a company located in 5 different states with hundreds of employees. The only thing that seemed secure was my paycheck; if I worked 40 hours a week, I would get paid for 40 hours a week.

The realization that this would be the rest of my life was not very appealing to me. Although the 40 hours of work is probably inevitable, the way you work that 40 hours could probably be changed. You could either spend 40 hours doing something you love or 40 hours doing something you have to do just to get through it to make a paycheck. What is the best way to get there? While there are many factors in choosing why I went to college, this was certainly one of them. College gives you more hope and dreams in knowing that you are aiming for something better. It provides the means by which you can gain an accredited education that is seen universally as a valuable asset to who you are, who you become, and what you do.

While I really had no fond memories of high school and just wanted out — which also contributed to my decision in even delaying going to college, I absolutely loved college. I went there with an open mind, a friendly heart, and a curiosity of what my life would be for the next two to four years. One thing I will say about college is: It is all about the experience and what you make of it. It could be the worst experience of your life or the most amazing years that will teach you a lot about yourself as an adult.

My classes were great. I joined several clubs that only motivated me to want to do more and be successful. I did all this while working my security job full-time. I aimed only for a two-year Associate degree in order to set myself up with short-term goals. During this time, I managed to pay off my tuition in full, which was not very expensive at the time, since it was a local college.

After I graduated with an Associate degree, I decided I wanted to move out of state, see something different, experience a change, and I made it happen. My decision for finally moving to the city of Chicago was because I had family living there and I wanted to live in a city. I applied to several universities in the area and was accepted by my first choice, who also gave me a reasonable scholarship that helped pay for some of my tuition. The university was around $30,000 a year and was well worth it. Of course, I could not afford to pay my tuition in full or even half of it. The most I was able to do was pay for a summer of tuition.

When you are studying in college, the student loan companies and banks are very helpful in making the whole transition very easy, as long as you filled out your FAFSA. They make you sign a contract, often with a cosigner, and then they transfer money directly to your school. As long as you attend the normal school year at part time or full time, you will never have to worry about money for classes or schooling. While in college, you feel as if you are in a bubble, protected from most of the dangers of the world, including the politics of living in the United States.

Once everything is complete and the student loan companies and banks receive your graduation date, they are immediately informing you that you owe them money. Usually, the amount you owe feels like a huge burden on your soul. At the point you figure out how much you actually owe, which is almost always an astronomical figure, you are thinking it might be better to trade your soul with the devil. At least the devil waits until your life is over to have your soul. The student loan company comes after you while you’re still alive.

You cannot escape student loan debt. You cannot declare bankruptcy and escape student loan debt. The only chance you may have of escaping it is that after 10 years of working in an impoverish area, specifically as a teacher, your student loans may be forgiven. Other than that, the only other escape is permanent disability or death. It has been reported that some people have attempted to fake their own deaths or disappear to other countries. So once you realize you have to leave your friends and family, never speak to them again, and act like you died, it is probably easier to just get a job, go to work, and pay off your student loans in order to continue living your fairly normal life.

So now you’ve graduated and you’ve gotten your first job out of college. How do you negotiate a salary to even help you afford to pay off your bills and student loans at the same time? Unless you’re a really skilled, charismatic, and talented individual, no company you approach is going to pay you what you want and what you need to pay off those student loans. While no one ever really thinks about it, you should be reasonable in asking for a salary. By doing a few estimated calculations of your bills and your student loans, you should be able to come up with a reasonable salary that suits you enough to be comfortable in your accepted decision.

With $40,000 in student loan debt at 6.8% interest, getting my student loans paid off was a top priority. I managed to land my first job out of college as a computer programmer, making $10 an hour. At that rate, with the benefit of living back home almost rent free, I would be able to pay off my student loans in about 5 years. I did manage to get a $2 raise after 6 months of hard work, but it still was not enough. Even with the raise, it only reduced the amount I’d be paying back my student loans by a few months.

I had always been looking for another job, knowing that with my college degree and technological savviness and knowledge, I could probably earn a few more dollars. And that is what ended up happening.. I ended up getting lucky and landing two jobs at once: One during the day and one in the evening. For the evening job, the salary was set in stone, but for the day shift, I negotiated a slightly lower pay than what the average worker got paid there, but it was enough to keep me comfortable, and still more than my former job.

My days ran long from 8 AM to 2 AM Monday through Friday, but all the while, I was gaining experience and making great money. So much money that by calculations, my student loans would be paid off in about a year and a half. I managed to send around $2,000 a month towards my student loan debt in addition to paying rent, car insurance, and other bills. I was also able to buy a new car, as my old one just died out of no where one day. While it hardly left anything in my savings, the amount owed was certainly dwindling at an exceptional rate each month. Towards the end of December 2013, I had one final payment left and I paid it off — an awesome Birthday-Hanukkah-Christmas gift to myself.

I graduated in August of 2010, deferred for about 6 months, started paying in February of 2011, and completely paid off my student loans by December of 2013. According to the student loan company though — who forgot to calculate the remaining interest into my final bill — I still owe them 9 cents. I called them about this issue and said, “Listen, I’ve paid you over $25,000 in student loans. Do you think you can forgive the 9 cents? It would either cost me more time and money just to mail it to you – because I’ve got to purchase the envelope, the stamp, the piece of paper I have to print it on, and then the Post Office has to pay their workers to process it, fly it across the country to you, and deliver it. Can’t we both just save the country some time and money by forgetting about the 9 cents? Even if you want me to process it through the bank – you will have to pay the bank processing fees on 9 cents, and it will cost you more money in the long run – can you forgive the 9 cents?”

The answer? NOPE. “Please send that 9 cents our way so you can be fully paid off with your student loans.” Now I know I shouldn’t be complaining about 9 cents, but if someone owed me 9 cents, I would just forget about it. I don’t think there is anything you can actually buy with 9 cents today. It might pay the sales tax on something, but that is about it. So I know it’s not much and that I should probably pay that last remaining 9 cents, but again: It’s 9 cents. I already paid $40,000+ to all the student loan companies I owed.

But that’s right, you guessed it: They want every penny of their interest. So if I do end up sending them 9 cents, I will probably find 9 of the dirtiest pennies I’ve ever seen in my life — and I’ve worked in a liquor store before with a guy that came in and gave and dropped off a handful of wet pennies soaked in piss. So call me an asshole for doing that, but someone who is after me for 9 cents is the bigger asshole.

Some photos from my journey along the way:

Towards the end of my student loan payments, my day job laid me off and I was unable to continue making monthly payments of $2000 a month. I dropped down to $1000 a month which sufficed, as I knew I only had a good 4 or 5 months left before I had everything paid off.

To have it mostly or all paid off though — is an amazing feeling. The fact that – and I do appreciate them loaning me money – but at that interest rate, I think it is safe to say that I am just happy to no longer owe the greedy bank and student loan company. Many people struggle and continue to struggle for years paying off their student loans. With everything thrown at you all at once —rent, cell phone bill, car insurance, health insurance, mortgage, and even kids—it is almost impossible to do what I did and pay so much a month. So how can you figure out how much to pay a month and pay enough to make sure you aren’t just paying off the interest?

The secret is: Set realistic goals for what you can actually afford to pay each month and make sure you pay more than what they ask you to pay, even if it is $20 or $50 more than what they are asking. They calculate those numbers based on how much they expect to make off  of you and they estimate your value based on how much you pay each month.  You are their bank account and their money maker.  They provided you the money when you needed it and you agreed when you signed the contract to pay back the money with added interest.  That is the business and the service they provide – that is their profession.

In order to pay down your student loan, figure out what you’re wasting money on and put those vices aside. If you’re cable-internet bill is more than $50 or $60 a month, than call them up and find out if you can get a reduced price, especially if you are paying for maximum bandwidth. Do you really need Internet speed that fast? Okay, just kidding. That’s like asking if you need air to breathe. Next… car insurance, call them up and see if you are eligible for any discounts. After you’ve done that, call your electric company and water company and see if you can be placed on a budget. They will charge you the same amount no matter how much you use.

Finally, your major culprit: If you are spending over a hundred dollars in groceries a week or going out a few nights a week, figure out how to reduce that bill. Make a list of items you really need before you go to the supermarket. Cut coupons out of the Circular each week for the best deals. Shop around and don’t be afraid to go to different stores for cheaper items, especially if the stores aren’t far from each other, or happen to be on your way home. Surely, there is something you can cut that will give you an edge to pay off those student loans.

My whole intention was to pay the bank as little interest as possible and when I owed a lot of money, my interest rate at 6.8% was over $400 a month. As you pay down your student loans, those numbers gradually begin to decrease, so you will want to do that as soon as you can. I originally had three student loan companies I was paying off, but was able to consolidate two of them —one company purchased the loans from the other, so I was only paying two companies. I began paying the student loan company that held only one student loan. The other company held four of my student loans. After I paid off my first student loan, I had the option of just paying it to the “group” which would spread the amount equally to pay off the student loans.

My major goal was to be debt free within X amount of years. I consciously gave myself three years. I really wanted to be debt free. It took me —2 years, 9 months, 21 days—146 weeks—1,025 days. While there was no rainbow or magic that happened in the end, the magic was when I received an email from the student loan company that my student loans were paid off. That is a magical feeling!

So if you are still paying student loans… hang in there, set short-term or long-term goals. It is debt you cannot escape and you must pay back. Accept that fact. Accept that your student loans are bills you have to pay, and most of all: If you can get a job you love, you won’t even care about paying back your student loans because you’ll realize after everything is all said and done — and paid off — the college experience – the student debt – it was all completely worth it.

Ironically, I would say that the last letter telling you that your student loan is paid off is probably worth just as much as your degree, or more. You do not receive that paper until your student loans are actually paid off. Whether you owe $20,000, $40,000, $60,000, or $100,000 or more. You only receive statements every month telling you what you owe with interest, so to receive something that tells you you have paid in full and the satisfaction of no longer having to make payments is wonderful. That is, until you decide to get a mortgage, but that is for another confession.

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