Law School Student Loan Payoff Progress Report: Month 7 -$116,353

Debt Repayment

Tackling law school student loans, one month at a time. Month 7 Progress Report!

Month 7: -$116,353.

I didn’t expect to have extra money this month or make major progress on these loans, but I did! I’m so excited! I can’t believe it. I truly believe that tracking these numbers, and having to tell you guys about it, has made a massive difference. I have been really super tempted to buy the (affiliate link) lilac and rose gold fitbit. But as nice as it would feel, it would be even more exciting to see my bar loan go down that extra $190 (after tax). Plus, how could I tell you guys that I’m paying a 7.75% interest loan and also buying a $200 watch, even if you didn’t know I already own the older fitbit Charge HR model?!

Yay for accountability! :) 

Remember, calling this “Month 7” is a misnomer. This is year 5 & Month 7 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! This is a simplified report with just the most updated information. If you want more detailed information, check out November’s payoff report.

Extra Income This Month

Amazon Affiliate: $13.21

Sponsored Posts: $60.00

Expected/Unexpected Reimbursements: Tax Return $825.00

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.

I was really worried I would owe taxes because last year I made more money on my blog than the year before, and I had renters in my house. As it turned out, I still got almost $900! I put $825 immediately toward my bar exam loan.

Bar Exam Loan: $825 (Taxes) + $400 (Paycheck #2) + $530 (Paycheck #1) = $1,755.00

Unsubsidized Loan: $236.00 (minimum) = $236.00

Subsidized Loan: $604.58 (minimum) = $604.58

Extra Blogging Expenses: $0

Discover Card at 0% Interest from Bathroom Remodel: $100.00

Total Payments: $2,695.58

I also set up my 401k contributions this month. It feels a little weird to be saving more money when I’m so close to paying off debt, but I know I needed to do it now instead of later. Future me will be thankful to be debt free and also able to retire, even though it might take a little longer for the debt free part so that I can benefit from some of that compounding interest that the government has been getting from me for years now.

Oh yea, and I bought these suitcases, which were definitely a need not a want with my goal to fly 10 times this year, but they’re also SO STINKIN’ CUTE!!!

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Current Law School Student Loans Balances

If I hadn’t made a chart for these loans, I wouldn’t feel like I’d done much at all. Even though I’d see how low the bar exam loan balance was becoming, I wouldn’t feel like I was making overall progress. It’s easy to see how HUGE my federal loans are, and not recognize the fact that every dollar of reduction makes a big difference.

The snowball method works exactly like Dave Ramsey said it would. Look at those payments growing!! I know the payment difference won’t be as exciting when I’m paying off the bigger loans and dealing with a lot of accrued interest, but hopefully this feeling of excitement will continue!

Tackling law school student loans, one month at a time. Month 7 Progress Report!

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 – Went up .25% in December

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

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

I am thinking about refinancing them. It feels risky because refinancing to a private company doesn’t come with the same protections as the federal Subsidized and Unsubsidized loans. Have any of you tried it? I’ve heard amazing things about a couple of companies, but haven’t gotten official quotes from any company because I still haven’t decided whether it’s the right choice for me. I’d love to hear more people’s insights on their experiences.

Tackling law school student loans, one month at a time. Month 7 Progress Report!

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.

Tackling law school student loans, one month at a time. Month 7 Progress Report!

I want to see a zero dollar balance so badly!!!!!! I don’t even know how I’ll feel to not have this loan anymore. To have conquered a student loan, not just the tiny $500 summer school one I decided to pay off rather than consolidate right after graduation, it will be the first time I’ve declared victory over the cost of law school! I think I’ll have to celebrate somehow, but I don’t know how. Any ideas?!

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 have started doing the math on how to increase my retirement contributions without harming my ability to live my life now and still pay off debt.

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. Once I start tackling this goal, I’ll list out the accrued interest separately.

6) Attack those Federal Student Loans!!

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

Thanks for coming alongside me during this journey. I’ve loved hearing your stories 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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14 Comments

  • Reply
    Sabrina Quairoli
    March 10, 2017 at 6:57 am

    Great job on bringing down your debt. It can be overwhelming but you look like you are making it happen.

    • Reply
      Brittany
      March 10, 2017 at 7:04 am

      Thanks, Sabrina! It’s definitely a journey! I appreciate your encouragement :)

  • Reply
    Bailey
    March 10, 2017 at 10:47 am

    That’s great! You are so close to paying off the bar exam loan!!
    Bailey recently posted…How I Spent My 168 Hours in a Week

  • Reply
    Sarah
    March 10, 2017 at 9:35 pm

    You’ve GOT to refinance. I’ve commented about this before, but Earnest is great. It makes such a huge difference to consolidate at a lower rate, and Earnest is very flexible. You can set up bimonthly payments, shift around the time of month your payment is due, and they have this neat (and motivating!) calculator tool that shows you the effect of whatever change you’re making on your ultimate payoff. I love Earnest. I should probably work for them :). I was hesitant when I first refinanced several years ago but it’s been a great decision and I’m now on track to finish off my student loans this year!

    • Reply
      Brittany
      March 10, 2017 at 9:36 pm

      Gahhhh you’re such a good advocate for them!!! Every time you mention them, I’m swayed a little more!

  • Reply
    Jax
    March 11, 2017 at 8:54 am

    Man, you are so close to paying off the bar exam loan! That must feel great!

    I haven’t ever consolidated student loans, but I have heard a lot of good things about Sofi.

    • Reply
      Brittany
      March 11, 2017 at 9:00 am

      Ahh it does! It’s very surreal. I’ve been paying it since 2010 so it will be like ending a really serious relationship .

      I have also heard about sofi and that they’re increasing their debtor protections. I definitely need to do more research into their options. Thanks! :)

  • Reply
    Ashley @ Life on the Parsons Farm
    March 13, 2017 at 6:29 am

    You’re making some great progress!! It’s going to be so awesome when you get it all paid
    Ashley @ Life on the Parsons Farm recently posted…The Wednesday Weekly – Week 47

    • Reply
      Brittany
      March 19, 2017 at 9:48 am

      Thanks, Ashley! I can’t even imagine how it will feel. Such a relief!

  • Reply
    candy
    March 13, 2017 at 8:24 am

    Wow the cost of student loans is sad. I know several people who have tons of student debt. So happy my kids were able to go to college and pay everything off as the went. Big relief for them.

    • Reply
      Brittany
      March 13, 2017 at 8:30 am

      That’s so great, Candy! I was able to do that with undergrad and am so thankful as well. I can’t tell you enough how impressed I am by my classmates who are paying off law school AND undergraduate student loans.

  • Reply
    P2P
    March 22, 2017 at 9:28 am

    Dude, look at that bar exam loan balance shrinking to almost nothing. You are so close!!!

    I refinanced with SoFi and have had no regrets. I’d get a rate quote on the refinance and then run the annuity calculations so that you can see the precise amount of money you’ll save. Those numbers will likely be a strong motivator to move the process forward, so long as you don’t expect to need to rely on loan forgiveness programs or other protections in the future.
    P2P recently posted…My 2 Years as an AirBNB Host

    • Reply
      Brittany
      March 22, 2017 at 6:47 pm

      I think I’ll get a quote from a couple places. The type of law I do is for a non-profit, but it’s still exempt from the 10 year loan forgiveness, and I hope to have them paid off well before the 25 year forgiveness mark. I have income based repayment right now, but realistically, I could pay more once all of my other debt is paid off (except for my house).

      Spoiler alert: My last payment took my bar loan to $1,000.23, so I made a $3.00 payment to see the balance under $1,000 LOL. I can’t wait to pay this off!!

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