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 Post subject: Fixing old mistakes, student neck deep in $100k of debt
PostPosted: Fri Jan 23, 2009 5:29 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
Hi there! To many of you reading this, you may be thinking, "What on earth did this kid do to get himself so deep in debt?!". Indeed, what *did* I do to put myself into this situation? I will be the first to admit that it was because of my own poor decisions, lack of self-control and lack of personal finance skills. Lately I have realized what a terrible mess I'm in and I have been devouring every bit of knowledge I can glean from personal finance websites and books, much like this one. It is time. It is finally time for me to realize my mistakes and learn from them. I wish I didn't have to start my life with this much debt but I guess I had to to realize the seriousness of debt.

A little background on me: I'm a college senior graduating from a very well known private art college with a degree in Computer Animation. In addition to the 4 years of loans that I needed to get to go here, I have 3 years of federal loans from my previous college. It was a period of time where I wasn't sure what I wanted to do with my life(something I'm still really trying to figure out). But the bad thing about it was, I didn't need those loans. I had enough federal grant money to put me through those 3 years without paying a cent. But I took the loans anyway because I thought it was free money. At the very least it was money that felt like it was free. I had spent that money on things like textbooks, a new computer and summer classes, but I had also spent that money on other things that I didn't need. I spent it on toys, a new digital SLR camera, games, and a slew of other things that I can't remember.

It's frightening for me to graduate during a time of recession. My school's career services department is assuring us that job opportunities are abundant. It's hard to believe that when major companies in my field are shutting their doors or leaving positions unfilled. I just need to weather this storm and hopefully in the end I will have paid off my debts and will be able to pursue my life goals.

After reading this blog and many others like it, I have realized that I need to take control of my finances. Even though I don't have a job yet, I figure I should set some goals for myself.

Here are my loans currently:

Federal loans:
$34,500 (includes Staffords, and Perkins loans) - will be consolidated at the end of the grace period to take full advantage of the time until I need to start paying it back. Will have around a 5.6% interest rate when consolidated.

Private loans:
$6,000 at 7.92% fixed
$18,000 at 6.25% variable
$37,500 at 5% variable

Family loan:
$923 at 0% interest :P

The good thing is, I have no credit card debt! Yay for that!

Here's my plan for paying back the loans. I had read all about Dave Ramsey's snowball and I think it'll work for me. Funny enough, if I go with either Dave Ramsey's plan or the highest interest first plan, I'd still be paying them off in the same order! Works for me! :D. I'm planning to extend the federal loan consolidation to at least 20 years so I can lower the monthly payment while I attack the private loans. My first goal however is to pay down all the interest accrued up to this current point so it won't be capitalized at the end of the grace period(which will amount to about $9k by the time I graduate).

Until I graduate though, the only thing I can do is manage my money as well as I can and hopefully sell a few of my things to help pay down my loans. (Goodbye Wii...I barely knew ye). I just hope that in the coming months, I can get a job and start living my life.

Cheers, and here's to the future. Thanks for reading :)


Last edited by sula_nebouxi on Mon Feb 01, 2010 10:39 pm, edited 1 time in total.

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 Post subject: Great start!
PostPosted: Fri Jan 23, 2009 10:00 pm 

Joined: Mon Oct 15, 2007 7:52 pm
Posts: 26
You might not feel like you've really "started" yet, but just having this plan and awareness are awesome!

One thing to look into may be to NOT consolidate your Perkins loans in with your other federal loans. They are the best loans you can have, and you would lose all the benefits if you consolidated them. Here's info from finaid.org:

"The Perkins Loan is the best student loan available. It is a subsidized loan, with the interest being paid by the federal government during the in-school and 9-month grace periods. There are no origination or default fees, and the interest rate is 5%. There is a 10-year repayment period... The Perkins Loan also offers better cancellation provisions than the Stafford or PLUS loans"

In your personal situation it may be better to consolidate everything together, but make sure to do your research on the Perkins loan! Good luck!


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PostPosted: Sat Jan 24, 2009 12:44 am 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
Thanks CHB! I actually didn't know about the 9 month grace period! I'll have to think about leaving that out of the consolidation. A little extra time without having to worry about a loan sounds good to me :). The perkins loan is a relatively small amount too, only $1250. That can be paid off quite quickly anyway, so I may want to just knock it off early. Hmm...I still want to keep that private loan interest from getting capitalized though. That's my main priority. Thanks for your advice :)

In the meantime, I canvassed my dorm room and set aside everything I'm willing to sell. I figure I should get around $300 from it all, and when I get back home, I should be able to sell my Wii and a few games for around $320. Plus I have a pretty rare Foster's Home for Imaginary Friends t-shirt that I'm planning on ebaying. I've actually seen that thing go for around $70 which astounds me.

I'm still debating whether or not I should sell my animation table. I barely use it and it would be a hassle to lug back home. I would miss having it though :(. But on the other hand, I could easily sell it for $150 or even more(It would retail for something like $300 or even more since it's such a specialty item). Sigh...I guess I'll have to cross that bridge when I come to it.


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PostPosted: Mon Apr 27, 2009 10:58 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
Wow it's been quite a while since my last post. I figure this is overdue for an update.

Well...I'm almost graduating! There's only a week left and then...freedom! But with that freedom comes the harsh reality of fewer job opportunities, even though I'm going into the entertainment industry(historically recession-proof). It seems every company is seeing cutbacks. I guess it's only prudent for them but it sure does suck for the slew of new graduates. I'm just hoping for something...anything right now. Anything to pay the bills that will be coming in November since that's when my grace periods end on most of my loans. So far, every recruiter that has come to visit our school has said there's only a few openings if any at all.

Seeing as how I've got a huge student loan debt, I've been looking into economic hardship deferments to see if I qualify. Apparently only my federal loans count towards the deferment requirement. To qualify for it, I'd have to make about $1900 a month. And with over $1000 of monthly loan payments that's just...Yuck. There goes that idea :(. I couldn't make it on my own on that sort of pay. Well...maybe I could but I'd be living a pretty spartan lifestyle. I've been doing alright with food expenditures so far. I average about $150-200 per month on groceries so it's definitely possible.

The good thing is that I'll be living with the parental units until I can find a job. And I have some savings stocked away so I have at least something to my name. Looking back I probably should have put all that money into a savings account or something instead of letting it sit in a sock drawer but oh wells. I've learned :). I'd like to get that money into an online savings account now. Or maybe a high yield checking account. But since most of it is in cash, I'd probably have to open an account at a brick and mortar bank. Oddly enough, all this learning about money and personal finance was kind of exciting. Maybe it's a sign I'm getting old...hah! I kid :P But really, I've learned so much these past few months and hopefully it'll carry into my later years.

Right now, I'm thinking that a federal loan consolidation is a really good idea right now. I know there may be some downsides to it but there's something to be said for having 9 of my loans all wrapped up into one. Mainly though, I just need some sort of relief from having to pay such a huge amount back each month. I'm hoping I have the financial discipline to pay off more than the minimum.

Sorry if this was pretty scatterbrained. I tend to have ideas pop out randomly throughout whatever I write. I figure this point in time is a real turning point for me. One stage of my life is coming to an end and a new one is just on the horizon. I think it's a pretty appropriate time to make this post. Wish me luck on this new adventure. I'll need it.


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PostPosted: Wed Apr 29, 2009 9:16 pm 

Joined: Tue Dec 02, 2008 5:16 pm
Posts: 6
Location: Washington, DC
Yeah the job market is pretty tough out there these days...keep looking though, you're bound to find something. And although $90k+ in debt sounds like an awful lot, it should be pretty manageable once you get that job. I'm looking at $100k+ in debt (law school) once I graduate in 2010!

Best of Luck

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PostPosted: Sun Jun 07, 2009 1:50 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
Thanks Lots! I'm sure you'll be fine with that Law degree! I'm still looking for some work. At this point I may have to look for some part time work. My grace period ends in November of this year so, I'll need some kind of cash to work with. Plus if I get a full time job in another state, I may need some savings to help with a move. Although I wonder if moving stipends are common for employers.

Wow it's been quite a while since my last post. I figure it could use an update :D. I've recently come upon some cash that I had stored away and forgotten about and surprisingly I was actually able to start a small emergency fund! It's been my goal for a while to sock away $1000 just for now while I take care of these loans. Now I just need to find a good online savings account to put it in. I'm looking into ING Direct since I've gotten some nice customer service from them in the past. I know Ally bank/GMAC is offering much higher interest rates but on an amount as small as $1000, I don't think a .5% increase is really worth it. Plus I liked the whole subaccount feature. Although if there's another bank that anyone can suggest, I'd be happy to hear about it :).

My next goal is to consolidate my federal loans. I still have some variable interest rate loans from way back when and I plan to consolidate after the rate drops after July 1st. So it'll probably drop from 3.61 to around 2%. Sweet! I'm still also planning to group all of my fixed rate federal loans in there too just for convenience excluding my perkins loan maybe(I would have to deal with 3 lenders otherwise). I'm hoping that after the consolidation the final interest rate will end up around 4-5%. It'll make my life so much easier. I've also thought of extending my repayment term to 15 or 20 years. I'll have to see if the interest rate will be low enough to warrant it.

After that, my next goal is to get rid of my highest interest rate loan. It's with this company called HESAA and it's pretty insidious compared to my other loans. It's fixed at 7.92% right now but will increase to 8.2 or 8.3 soon. The 7.92% was part of an introductory rate :(. Luckily it's a small loan compared to the others. It's sitting at about $6100 right now and I'm hoping that I can pay that off as soon as I can just so I won't have to deal with it again.

After that I guess it's just paying as much as I can every month. Ahh well...off I go then!


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PostPosted: Sun Jun 07, 2009 6:29 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
This probably shouldn't go here but I figure it's a part of this new life I'm undertaking. If I'm going to make my wallet a little more fit, why not my body? Last time I checked I was about 160lbs and I'm about 5'4" or 5'5". I don't feel comfortable with my body anymore and I'm going to dedicate some time everyday to a bit of exercise. My goal is to lose at least 5 lbs in a month. If I can do that, I think I'll feel a bit better about myself :). And to hopefully keep me in check, I'm splurging for a bathroom scale to track my progress. Hopefully it'll keep me motivated!

Like many others have said, it pays to invest in yourself :)


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 Post subject: Goals for 2009
PostPosted: Tue Jun 09, 2009 1:29 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
I think this is a good time to come up with some concrete goals for this year. I've just noticed that I had overall goals but I need something a little more focused and attainable within the short term.

Here's what I'm planning for the remainder of 2009:

- Find a stable full time job..haha nothing else matters if I don't have this :(
- Start up individual online savings account with ING and fund it with $1000 to serve as emergency fund.
- Start up a personal checking account(probably gonna go with Schwab here). I have a joint account right now but I'd rather have my very own in the near future.
- Pay off the accrued interest on my heinous HESAA student loan before it gets capitalized at the end of the year.
- Start contributing to a 401(k) plan, and hopefully I'll have an employer that has one and matches.
- Start paying down debt
- Sell or donate some old/used stuff
- Read the Intelligent Investor (was curious about this book for a while)

Overall, I think I just want a life that's a little less dependent. I'm 24 and I live at home. I share a checking account with my brother and I don't have much to call my own. I want a fresh, new life where I'm in command and I have no one to fault but myself.


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PostPosted: Sun Jun 21, 2009 5:56 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
I may be getting a substantial windfall in the upcoming weeks :D. It should be enough to cover my horrible student loan with HESAA, which is sitting at around $6100 right now I'm guessing. I plan on putting it all towards that loan so I can be rid of it. The monthly payment works out to about $57 a month but even so, I'd rather not keep it around. I have never done business with such a terrible company. They refuse to answer any calls or emails and I'm left in the dark over how much is actually owed, when my repayment period starts among other things. What makes it worse is that there is no way to find out how much you owe online and their phone system is so borked that the automated system doesn't recognize my account with them. If I can't reach customer service again, I'll have to look around for an executive email address or phone number. I'm planning an executive email carpet bomb...or EECB, something consumerist.com recommends when customer service is giving you the runaround. You contact the man at the top to get things done.

I'll be so glad to be rid of that loan...it'll save me over $6000 in interest over the life of the loan. And I won't have to deal with their crap anymore. That's gotta be worth something.

Oh and I'm down to 158 lbs :D Yaaaaay~!


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PostPosted: Sat Aug 01, 2009 10:38 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
Thank you interest rate drop! I couldn't believe that 4 of my loans were at 1.88%. Incredible! I just sent off my loan consolidation application to the Dept of Education. It doesn't look like there's any sort of approval process. They just basically took all the loans I asked them to consolidate and they're going to give me a new one around November or so this year. Yay! $34,000 Direct Consolidation Loan at fixed rate of 4.5 or 4.6%. Not too shabby. I decided to just lump all of my federal loans together for simplicity's sake. It also looks like the repayment term is set at 30 years(couldn't be changed and to be honest, with that kind of interest rate I'd rather funnel my money towards my other loans anyways). It's funny too cause the Extended payment plan was 5 years shorter than the Standard haha, and it was more expensive o.O. So I just opted for the Standard plan...which should be about $170 a month or so. Not bad at all. At least this is starting to look a little more manageable.

So now my loans look a little like this:

Direct consolidation: $34,000 at 4.5% fixed, 30 year term, in grace until 11/09
HESAA: $5950 at 7.92% fixed, 20 year term, in repayment (those evil heathens...)
AES: $23,000 at 3.8% variable, 10 year term, in grace until 11/09
Citibank: $38,000 at 4.25% variable, 10 year term, in grace until 11/09

The windfall I mentioned in the last post wasn't as large as I had thought. It will cut down on my highest rate loan but right now, I would much rather use it to make minimum payments and save until I can find a job. No sense throwing $2000 at a loan and still have it breathing down my neck. That money would be better spent helping me ride out this unemployment.

In other news, my emergency fund is sitting pretty at $1000. I had all of that saved up in cash over the years and finally got around to putting it all into a bank. And I'm down to 156 lbs! I figure I should start some strength training seeing as how I can just convert the fat in my body straight into muscle. Onward and upward :D


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PostPosted: Thu Aug 06, 2009 6:28 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
Following up on a lead with a possible job opportunity. Things are still up in the air right now so, I'm not sure if I'll even get an offer. But if I do, and I hope I do, I'll start with a salary of about 35,000. A bit low but nothing else seems to have surfaced. I think I may snatch it while I have the chance. A bird in the hand is worth two in the bush right? They offer medical insurance too but no 401(k) plan yet. No prob I guess...I won't have too much money to save anyways :(. I definitely would start up a Roth IRA in the meantime though. The good thing is, the job is in Florida which has really cheap housing. I can probably find a decent apartment that's around $500-550 a month. I've even seen listings for houses that are around that price too(although there's way more costs associated with a house). Florida also has no state income tax! Yay! So, I'm guessing my after-tax income will be somewhere around 32-33k. I can work with that. I've lived like a college student for 4 years of my life. This won't be too different :D.

I'm crossing my fingers and hoping I get an offer. The great thing too is that it's close to some friends from school! At least I won't be all alone out there :D. At this point I'll be happy and grateful to get anything. Even if the job does pay only 35k. The experience will be worth it and everyone's gotta start somewhere, right?


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PostPosted: Fri Aug 07, 2009 5:09 am 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1148
Location: Maryland
Good luck with the job prospect. A job is better than no job, so I would take it if offered.
It's cool that your friends will be nearby too.


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PostPosted: Fri Aug 07, 2009 7:45 pm 

Joined: Wed Jul 08, 2009 3:28 pm
Posts: 119
Good luck with this opportunity, and if you do get in, take advantage of it and learn everything you can! Good luck!


Last edited by pdxrocks on Thu Nov 19, 2009 9:58 am, edited 1 time in total.

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PostPosted: Sat Aug 08, 2009 8:37 am 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
peachy- Thanks :D. I definitely will take it if offered. It'll be nice to finally be able to start paying down my debt and be on my own for once. The company still hasn't responded to me, so things are still up in the air. We'll see what happens. I hope they contact me soon cause I'm feeling very anxious about not getting a reply yet. But I suppose these things take a while.

pdxrocks- Alright! Animators unite! Thanks man, I won't look at a job like this as a waste or anything like that. I'd be extremely grateful if I got it. I actually have a classmate that works there right now and she really enjoys the place. Good enough for me! I do have goals beyond this though. I'd love to eventually move into lighting for games or feature film someday(This company actually does flight sims used for training pilots and stuff). But unfortunately, opportunities for us lighters are few and far between right now and this job will give me the time I need to improve. But right, now I want to concentrate on getting that job! Baby steps now haha :P


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PostPosted: Mon Aug 10, 2009 2:33 pm 

Joined: Fri Jan 23, 2009 4:28 pm
Posts: 140
Location: Cali
I've finally opened up an individual Electric Orange checking account with ING. Goodness that took all but 30 seconds to do. Another baby step on the way to independence and self-reliance! Woohoo! I'm still keeping my old USAA checking account since I still might need to use paper checks in the near future. But that's all I'd use it for. Down the road I'll probably close it down and find a traditional bank for checking since I might need the extra services of a brick and mortar bank, like depositing loose change, cashier's checks and probably many other things I can't think of right now. The only problem I see with a traditional bank is fees...lots and lots of fees. Hopefully I can find one that doesn't have any kind of service fee and I'm good. I'd only need a simple account to pay bills and deposit cash and coins.

I know I was supposed to open up a Schwab checking account but I've had very good customer service experiences with ING so I'm going to stick with them for now. Plus, it was just unbelievably easy to open up a checking account after I made the savings account. Down the road I'll probably open up a Sharebuilder account too! 3 for 3! Mostly for an IRA, but first...need an income ;). Speaking of which, I'm still waiting on a response from the prospective employer. I guess these things just take a while. So we'll see what happens. Although to be honest, I'm on the edge of my seat here waiting for that fateful response :P.


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