Law School Student Loan Payoff Progress Report #5: -120,819

Debt Repayment

Law School Student Loan Payoff Progress Report -120,819

Month 5: -$120,819.

You guys!!! We are down to $120,000! We skipped $121k entirely! Wahoo! I think part of this is because I wrote last month’s report late, so there are 8 days of interest that aren’t reflected here, but I’m still stoked.

Last month I told you I was looking into ways to simplify this report. I hope that this new format will be easier for you to follow along with and will save people who have read prior reports from scrolling through repetitive information. Thankfully, some awesome friends helped give me feedback on how to make it easier from a reader’s perspective, and another friend is creating a new excel spreadsheet for me that will make the charts even better. Yay! If you want more detailed information, check out last month’s payoff report.

Remember, calling this “Month 5” is a misnomer. This is year 5 & Month 5 of payoff. And guess what? For the first 5 years of my student loan payoff I paid NONE of the principal balance on the Subsidized and Unsubsidized student loans, which makes up almost all of that balance. The remainder is my private bar exam loan.

The great news is that now that I’m credit card and car debt free, I can take this debt by the horns and show it who’s boss!

Law School Student Loan Payoff Progress Report

Extra Income This Month

Amazon Affiliate: $14.24

SiteGround Affiliate: $100.00

Instagram: $20.00

Sponsored Posts: $00.00 – I was too busy at my lawyer job to write any sponsored posts last month, but there are some coming up next month.

Side Hustles: None. The season for my normal work in this area is over, and I actually took the Winter off from Bar Exam grading. I’m hoping that I can come back up for air, catch up personally and at work, and go back to grading this summer.

Expected/Unexpected Reimbursements: Christmas Bonus

Where My Payments Went

In previous posts I put in parentheses when something was a snowball payment. One of my friends who is also a lawyer, pointed out that people may not know what “snowball” means. That did not even occur to me because I have been using the snowball method for two years now. I am changing the designations from snowball payments to where they came from in my budget so that it’s more clear.

Bar Exam Loan: $800 (Christmas Bonus) + $400 (Paycheck #2) + $430 (Paycheck #1) = $1,630

Unsubsidized Loan: $236.00 (minimum) = $236

Subsidized Loan: $604.58 (minimum) = $604.58

Extra Blogging Expenses: $0

Discover Card at 0% Interest from Bathroom Remodel: $100

Christmas Presents: WAYYYY too much money. This was my first Christmas without credit cards and I went kind of crazy, but it was totally worth it.

Car Registration: $151.00 – I love living in Washington. It’s so much cheaper than Nevada to register my car!

Total Payments: $2,721.58

Law School Student Loan Payoff Progress Report

Current Law School Student Loans Balances

I’ve created some new charts to track the progress here. My friend Brandon is creating a new one for me, but for now, I’m excited about these bar graphs

chart of payments made on law school student loans over four months.

The interest rates on these loans are what make my payments look almost meaningless on the subsidized and unsubsidized loans.

Bar Exam Student Loan: 7.75% Interest +.25%

Subsidized Student Loan: 7.125% Interest, Accruing $5.71 Per Day

Unsubsidized Student Loan: 7.125% Interest, Accruing $14.63 Per Day

I received an e-mail from Wells Fargo last month claiming that my Bar Exam Loan is a variable interest rate loan. One thing I’ve heard from my family my entire life is to never get a variable interest rate loan. I do not believe I would have intentionally done that, so I’m furious. I asked to see a copy of my original loan documents that show I agreed to a variable interest rate. There’s a 10 day wait to get those. I’m also looking into whether it would save me money to transfer the balance to my Discover Card with 0% interest, refinancing it, or just throwing every single extra penny to it. Just when I think I’m getting less angry about my student loans, something like that happens.

Stacked column chart showing progress on student loan payoff.

What is a Bar Exam Loan?

The bar exam loan was to pay for the cost of BarBri, the only bar exam preparation course in Nevada in 2010 (roughly $4,000), the video iPod I had to buy to take my classes remotely because I took a clerkship in the middle of nowhere and back then there wasn’t reliable online streaming (roughly $200 I think?), the cost of applying for the bar exam (roughly $1,000), the cost of moving to a different state in the middle of nowhere (roughly $1,000), my apartment deposit and first month’s rent (roughly $1,200), oh and my two best law school friends got married during bar prep/the week after the bar exam and I flew to both their weddings/stayed in hotels/etc (roughly $800 – totally worth it), and then the cost of living for 2.5 months while I studied for the exam.

I worked part time while I took the bar exam. I don’t recommend this, but remember, the economy sucked and I had to take the job I was offered. That job required me to start three days after graduation. At the end of the exam period, I had a little bit of money left over, and I used it to pay a super high interest rate credit card I’d gotten to buy furniture in my 1L year. Thankfully, I have made some progress on this loan and it’s at a decent balance now to feel like I can conquer it!

 

Graph Showing progress made on paying off bar exam loan

I took most of my Christmas bonus and put it toward the bar exam loan almost immediately. I knew if I didn’t do that, I would spend it on something else. I can’t believe what a difference it made! Seeing that huge drop is super inspiring to me. Taking extra income and throwing it toward debt has become a super exciting habit for me now. I don’t miss the money because I didn’t budget for it anyway, and now for the first time the stacked column looks like it’s actually moving! yay!

My Debt Repayment Goals

1) Pay off my car.

2) Pay off my credit cards.

3) Pay off the Bar Exam Student Loan.

I’m sticking with the snowball method, to pay off my loans.

4) Re-evaluate my savings and retirement plan.

I already had a phone call with my financial planner about my plans and will have a more in depth conversation with her once I send over some information she needs from me.

5) Tackle the accrued interest from my income based repayment plan.

Because I have been on an income based repayment plan, without making a ton of income, my monthly payments did not cover all of the interest on my student loans. I cannot make principal payments on the loans until I pay the accrued interest. The balance of the accrued interest is incorporated in the balances you see above.

6) Attack those Federal Student Loans!!

I’m coming for you, law school student loans!

Thanks for coming alongside me during this journey. I’d love to hear your story too. You can leave it in the comments, or tell me about it on Facebook or Twitter!

Common Questions:

I’ve written a few posts about finances and being a lawyer already. Here are the links if you’re interested:

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10 Comments

  • Reply
    Bailey
    January 11, 2017 at 10:50 am

    Wow! It’s definitely exciting to see how it dropped about $5,000 from September to January! Way to go!
    Bailey recently posted…Winter Jam 2017

    • Reply
      Brittany
      January 19, 2017 at 7:57 am

      Thanks, Bailey! I got some extra, unexpected money this month and already updated the chart just to look at haha. That progress inspired me to throw 99.9% of the extra money to the loan instead of fun!

  • Reply
    Jess T
    January 11, 2017 at 10:33 pm

    I consolidated all my loans and so when I make a payment it is divided between my subsidized and my unsubsidized loan as the company views it as one loan. However, if I send detailed instructions on a large payment I can direct it be applied to my subsidized loan only. I’ve paid off nearly 15K on the principal that way. My subsidized loan accrues much less interest than my unsubsidized so I was actually able to get to the principal. This has reduced my accrued interest each month by about $100. I still have a lot of accrued interest to tackle on my unsubsidized but I figured better to get the principal down on one instead! At least in the IBR the interest isn’t added to the principal each month. You could really start getting that 31K down quickly if you target payments to apply just to that loan. I had to give my loan company very specific language to make this work and I talked to three people before getting the right answer on how to do it but it can be done!

    • Reply
      Brittany
      January 19, 2017 at 7:55 am

      Thank you so much for this, Jess! I sent a letter to the loan company and it seemed like it worked, until the minimum came out and they just adjusted the percentage of it that went to the unsubsidized loan and left the subsidized loan stagnant. I’ll have to keep contacting them to try to get it right. My idea was exactly what you’ve said, target the 31k loan and at least make progress on that (the accrued interest is only about $2,000). You’ve given me renewed vigor to get that strategy to work for me!

      • Reply
        Jess T
        January 19, 2017 at 2:18 pm

        It definitely takes some persistance but keep trying because it can be done. I had three calls to my student loan company regarding this and with each person I got a different answer. It’s true in general that you can’t apply a payment to the principal until the interest is paid off. It also seems true that any considolidated loan they view as one loan, however, they can be seperated into what my company calls “Sequence 1” and “Sequence 2”. Finally I called and said okay here is the deal and I need a straight answer! So finally they told me it could be done. I’ve since submitted three payments this way and they have all been applied just to the subsidized loan. However, each time when I submitted instructions with my payment, they did not process it correctly. I had to send in a follow up letter to them and ask for the request to be expedited. All three times they then correctly applied it. Since I have so much less in accured interest on my subsidized loan, I was finally able to get some principal down. Keep trying! I’d love to hear if it gets figured out. I had to send in very detailed instructions with the language they gave me including which Sequence loan to apply it to and for the loan not to be placed in pay ahead status. Good luck!

  • Reply
    valerie
    January 12, 2017 at 2:07 pm

    Wow this amazing you did this, I will have to show this to my son. He has deferred his college loans for a year until he gets a permanent job, He really needs to see this! Student loan debt can be so horrendous!

    Thanks for sharing!

    Valerie
    Fashion and travel

    • Reply
      Brittany
      January 19, 2017 at 7:53 am

      Ohh I hope it helps him, Valerie! Student loans can be so overwhelming and the interest can quickly get out of control, since the rates are based on a federal number and not an individual’s credit score.

  • Reply
    Kusum
    January 15, 2017 at 7:34 pm

    You go girl! You are totally knocking your payments out of the park haha. I think its great you are keeping such a close tab on your earnings and debt repayments. Every student should sure read this!

    xx, Kusum | http://www.sveeteskapes.com
    Kusum recently posted…Travel Timeline | Our Top Ten Travel Mantras

    • Reply
      Brittany
      January 19, 2017 at 7:52 am

      Thanks, Kusum! I’m surprised by how motivating it’s been for me! It’s hard to see progress when you just look at last month compared to this month. But seeing the progress over time makes me want to keep going!

  • Reply
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