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Home > Big debt payment; met goal and then some! Pondering possibilities

Big debt payment; met goal and then some! Pondering possibilities

March 23rd, 2012 at 01:28 am

My $2000 payment to NT's student loan hit; $1965 went to principal, so that's $3876 paid this month! Way over our $1998 goal (of course we had no idea the lawyer costs would be this low).

By my calculations, that loan is now at $15,742. The account says it's still over $17K, because they still have not posted three payments but have posted a payment that I never made. (I call them about once a month and they always say they've received the payments and will process them eventually, and credit us for the interest we've been overcharged.) But I think my calculation is pretty close.

With a bit of luck, we might be able to put nearly $1800 toward it in April, which would take it down to about $14K. May through July we'll only be able to put about $1000, which would take it to $13K. Starting in August, we should be able to put about $1000 per month toward it, so it could conceivably be paid off in Sept. 2013.

Of course, NT will be going back to school this summer, so I guess we have to choose either A) try to cashflow his tuition or B) keep taking out loans but paying as much as we can on them.

Given my recent frustration with student loan companies, I'm wondering if I should slow down repayment and focus on cashflowing tuition instead.

This would still have a positive effect on our debt totals. Some of you may remember that, when I started our debt journey, I didn't want to see our debt go up, even though we'd already committed to NT getting his degree.

So I added $40,000 of phantom education debt to our bottom line. Whenever he took out a student loan, I'd subtract it from the phantom debt and add a line item for the actual debt, so that our debt didn't go up when he took out loans.

He's still got $12,839 of phantom debt. So if I cashflowed tuition, I'd reduce the phantom debt by the same amount, since it would be debt we didn't have to take out after all.

I don't have to decide right now, because if I decide to cashflow, I could use money from the EF to pay tuition outright and then replenish it with the $1000 per month that would ordinarily go to student loan debt. So it's not like I really have to plan ahead if we change course and stop taking out new loans.

Posted in Uncategorized | 3 Comments »

3 Responses to “Big debt payment; met goal and then some! Pondering possibilities”

  1. frugaltexan75 Says:
    March 23rd, 2012 at 01:53 am 1332467627
    1332467627

    Personally, I would vote for cashflowing the tuition. Even if it slows down your repayment of actual debt, not adding to the actual debt amount seems like it would be just as big a boon. (I hope I'm making sense ... long day ...brain is a bit fried.)

  2. creditcardfree Says:
    March 23rd, 2012 at 12:49 pm 1332506981
    1332506981

    I too like the idea of cashflowing tuition if possible. No additional interest accumulation to try to keep up with.

  3. Jerry Says:
    March 26th, 2012 at 02:00 pm 1332770416
    1332770416

    I can't stand the student loan companies... most of them are absolutely horrible and they just lead to even more stress. If it is at all possible to cash-flow tuition (or find some insurance of another option), I would choose that in a heartbeat. I have accrued a load of student debt from undergrad and grad school, and while I think that I will be able to pay it off, it is still an absolute pain in the kiester. Good luck!
    Jerry

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