It’s time for another student loan update! Let’s look at the cycle between March and April because there are some good news that happened throughout. We’ll go over my loan accounts and a student loan news that I believe everyone knows about already.
EdFinancial
In my last update, I resumed my student loan payments, and I was tackling EdFinancial’s Group C, which had a balance of $1,554.13. Since my last payment, I had paid $600 to Group C.
But as you can see on my screenshot, I made a $1000 payment on April 6th. The excess money from my tax savings we’re ready to be allocated, so I made that extra payment to finally pay off one account. $954.13 was allocated to Group C, and $45.87 to Group A.
As you can already see, Group C is finally off of my plate, and I can finally move on to Group A. It took me 16 weeks to pay off Group C, which is 2 weeks earlier than my estimate back in Student Loan Update #28.
Group A
So it’s time to move to Group A. Here’s a quick glance of this account. I got Group A back in 2017, and it didn’t start in repayment until 3 months after I graduated in 2019. This was the very first loan I’ve ever received.
It started with a balance of $5,500, with an interest rate of 4.45%. And like my other federal loans, Group A is on a Graduated Repayment Plan.
After my $45.87 leftover, the balance now sits at $5,298.91. If you’re very keen, my balance today is not that far from this loan’s starting balance of $5,500. Sad to say that I’ve only made 6 payments to this account ever since I got it.
I paid $262.20 in total to Group A, with $155.22 of that going towards the principal. While the rest went to paying the interest. That’s $106.98 paid in interest alone. That’s close to half of what I’ve been paying!
This is how bad having bad debt can be. Never again will this happen because I’m learning how to be a better handler of my money now.
Anyway, with my sights set on a new loan target, I will be paying $225 weekly on this account. That is $25 more than my previous, so that’s a monthly payment of $900 to $1,125. Very big amount for me, but $5,300 is the goal to crush.
Weeks Left to Payoff
Based on this calculation, I have 24 weeks left to pay off Group A. And 24 weeks is roughly 6 months, which falls on September 27. This timeline is within my goal of becoming student loan free before the end of this year. So I’m very excited with this calculation.
Payment Pause Extended to August 31
Speaking of timelines, the payment pause timeline just got extended again last week. I made a video a month ago talking about the possibility of the pause being extended due to some signals throughout the space, and here we go. It’s a reality.
It was predicted that they would make an announcement of the extension sometime around March 22, but it was 2 weeks off. But that doesn’t matter since it’s here, and it’s good news for those who really need this extension.
According to the announcement released by the White House,
In January 2021, on my first day in office, I directed the Department of Education to pause federal student loan repayments through September of that year. At the time, our economy was barely growing. Fewer than 1 percent of Americans were fully vaccinated. Millions of Americans were struggling to stay afloat. Because of that pause in repayments, 41 million Americans were able to breathe a little easier during some of the toughest days of the COVID-19 pandemic. […] Accordingly, to enable Americans to continue to get back on their feet after two of the hardest years this nation has ever faced, my Administration is extending the pause on federal student loan repayments through August 31st, 2022. That additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs. As part of this transition, the Department of Education will offer additional flexibilities and support for all borrowers.
What that basically means is that payments will restart on September 1, 2022. And if you think about it too, I believe one of the reasons they’ve pushed this — political agendas aside — is because the ED is just not ready to restart those payments.
The student loan system is broken, and they’re in the process of overhauling it. They want to find out and fix what’s broken. Doing that while also processing people’s payments, sending support and other backend things are not easy to do. Their system could get overwhelmed, and we could just end up with more problems with student loans.
Final Thoughts
The balance as of April 12, 2022 for my entire student loan is $5,298.91!
It’s just the balance of Group A now, so there’s no point in me thinking that there is an “entire” student loan balance here. Moving forward, I’ll just call it my student loan balance.
So I’m here now on the final loan. It’s the final stretch before the finish line. It’s scary and exciting at the same time. I’ll be paying more than I ever did every month, but the prospect that all this will be gone before the end of year makes it worth it.
At the end of this entire series, I will share everything that I did — all the steps, the side hustles, the research and tips. If I’m able to do it, I believe everyone can do pay their student loans off and be close to becoming financially free.