The Beginning
Going into college, I was not very financially literate at all. I didn’t think much about the how school was being paid for really. I knew that my parents contributed to a college savings program, which I am very thankful for. Without my parents, I would not be here, physically, or here… where I am in life. If your a high school student, just beginning to think about college, make sure you understand the financial basics. Understand financial aid, scholarships, unsubsidized and subsidized loans. Much of this information can be found in the link below.
https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized
How I Got Here
I graduated from college in May of 2019. For any of you still in college, that moment you walk across the stage is amazing… just want to get you even more excited about reaching that milestone, don’t worry, you’ve got it. So, if you’ve got some potential student loan debt hanging around, waiting for you to graduate like I had/ have; this is what I’m doing to finish it off in a year.
My Plan
So, I began paying on my loans on September. The first payment felt grate but, its like throwing a penny in the ocean…. Only made a small ripple. My loans were under forbearance at the time, the definition of forbearance is shown below.
While you’re in school, the loans default to forbearance, interest accrues and waits for you to graduate. Once you graduate, you get a six-month grace period that allows you to figure out your financial situation and determine which payment plan you want to enter. But your still accumulating interest unfortunately.
So after I paid down all the interest, which took me about 2 months, I began to knock down the principle. I adopted Dave Ramsey’s emergency fund amount recommendation which was $2,000 in order to start contributing to my student loan debt as fast as possible. Each and every week I paid a minimum of $450. I chose to pay every week to make sure I keep the interest amount very charged to each loan very small.
The corona virus unfortunately threw a wrench in my plan. Before February I had my loans down to about $15,000 but, I had to stop payments due to all of the uncertainty that came along with the virus. Instead, I began to use the payments I was making for my student loans and contributed that money to my emergency fund, just in case something happened, and I needed extra money. Gotta prepare for the unknown.
The great thing about this situation is that im not accruing any interest at the time because the government halted all interest being applied to student loans until September 30th, 2020.
Conclusion
Thankfully, I am still employed and able to pay my bills throughout the corona virus pandemic. Once September 30th arrives, my plan is to apply the money I saved up to the rest of my loans. That way, I can do my best to be as safe as possible during these uncertain times while paying off debt. With everything going as planned, ill be done with my $21,000 in debt by mid-October.
I was able to put that amount of money towards my loans due to budgeting and solely off my income from my 9 to 5. The key, as you probably already know, is to either decrease your monthly expenses, increase your income, or both. So far, I was only able to decrease my monthly income. Though, I have been looking and working to obtain side hustle income, it unfortunately hasn’t happened yet.
My advice to you, if I may, no matter how much money you make, take your time and make sure you have your emergency fund. The most important thing is to make sure your secured if something happens. The student loans debt will be paid off, you got this.