by Ashley
It’s been a while since my last debt update (July 2022), so I thought it was a good time to write an update on recent happenings and progress.
Student Loans
Advantage services my student loans. Thanks to comments from readers here, I applied for Public Service Loan Forgiveness back in August.
The program allows for student loan debt to be forgiven after 120 qualifying payments for folks who work in eligible public service positions. I’ve been working in an eligible position since August 2015, so I would only have 2.5 years left until the remainder of my loan balance is forgiven. But I didn’t apply for the program back in 2015. Thanks to readers, I was made aware that federal regulations for a period of time (now expired) allowed for a request to have past payments count toward the 120 minimum qualifying payments.
Updates from Mohela
It’s taken 6 months, but I finally heard from Mohela that the department of ed has transferred customer service for my federal loans to Mohela. I’m officially enrolled in the program!
That said, I was disappointed to see that I still have 44 qualifying payments to go (roughly 3.5 years instead of 2.5, as I’d thought/expected). When I clicked to view my loan payment details, I saw that there are months in 2017, 2018, and 2019 when I was in a period of deferment or forbearance. They amount to 9 months in total across the 3-year period.
Any advice on this? I thought non-payments during deferment or forbearance also counted now? Or maybe that was a separate application that I didn’t get in on time because I did not remember/realize I had periods of deferment or forbearance??
Either way, I was excited to officially be enrolled in the program, and then bummed to realize I have a whole extra year that I didn’t realize would be tacked onto my acceptance.
Student Loan Debt Update
Since my last debt update in July 2022, I haven’t made any payments toward my student loans. I mentioned in my 2023 Financial goals post how I’d had to dive into my EF to fund lawyer fees for ongoing child custody issues. The legal fees were ongoing from August until the present, though we came to an agreement earlier this month and I am hoping that I’ll get a break from the legal fees in the months ahead (though…who knows?).
In my last debt update, I had $26,561 in student loan debt. I have the exact same amount now. No more, no less. Womp wooooooomp. I do have some money in savings to put toward student loan debt. I’ll post about this in the next couple of weeks, as I plan to do a financial goals update post.
Carmax Auto Financing
My only debt right now other than student loans is for my car financing through CarMax. And while my student loan update may have been a little anticlimactic, I’m happy to say I’ve been making good progress on my car debt.
In July 2022, I reported owing $16,084 on my car (originally purchased in 10/2021 for $20,539). In just the past 7 months since writing that update, I now owe $11,804. That’s a difference of $4280 (plus the interest paid during that time). I’m pretty pleased with that progress. It amounts to an average of over $600/month paid toward the car. The minimum payment is $374, and I’ve been consistently paying extra to try to whittle down that balance.
In an ideal world, I’d love to have the remaining balance paid off by the end of the year. That would be a very lofty goal, as it would require payments of over $1,000/month (which is higher than I’m currently doing), but it’s not impossible. Who knows – maybe at the end of the year, I’ll re-appropriate the student loan debt savings to throw at the car just to be done with it. I’ll revisit this down the road.
So there you have it. I’ve put it into a chart, too, for those who prefer a succinct display of information.
February 2023 Debt Update
| Debt | Current Balance | Original Balance | APR | Minimum Payment | February Payment |
|---|---|---|---|---|---|
| Carmax | $11,804 | $20,539 (10/2021) | 3.45% | $374 | $500 |
| Aidvantage | $26,561 | $96,020 (2014) | 0% currently | $0 currently | $0 paid; $350 saved |
| Total | $38,365 | $116,559 | $374 | $850 |
I’d love reader input if anyone knows more about having periods of student loan deferment “count” toward PSLF. Am I too late for requesting that?
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
It sounds like you have a monthly challenge to throw $1000 at your car payment. Maybe there are a few expenses worth taking a fresh look at, kid’s clothes to send to a consignment sale, etc. Once your balance drops to the amount sitting in savings, it would be really appealing to pay it off in bulk.
I like the idea of making this into a challenge!
I had also never applied for PSLF until RIGHT before the deadline. I had loans with two providers and one of them was transferred quickly and forgiven almost immediately. I had some loans with the other provider that said they didn’t qualify, so I needed to do a consolidation loan. I did that process, and then that amount transferred to MOHELA and was forgiven almost immediately. The final balance was still in the original provider for months. It only recently transferred, but has information similar to yours in that it says several months do not qualify. I’m not sure why, as everything did. The others have already been forgiven. I’m interested whether anyone here knows why or how to circumvent that message.
So strange! I hope others in-the-know can chime in! I have no idea!
I called and sat on hold with MOHELA for quite a while that day after writing this comment. As it turns out, that anything that’s considered an ‘in school deferment’ or anything that is less than 12 consecutive months doesn’t count. That seems to be the case with mine. I got all of that information from the information they give while you’re on hold. So you can call their help line and get additional details without actually having to wait long enough to talk to a human.
well that’s very disappointing. Because I wasn’t in deferment long enough, I still have to make those payments. Whereas, if I’d been in deferment an extra 3 months, those non-payments would have “counted” as payments. Ugh…… Thanks for the info though! I appreciate it!
Is there any benefit to paying your car loan early (other than paying it off?). If not, you might want to consider putting extra payoff money in savings/retirement/investment/college accounts. I do understand the appeal of paying it off early, but it might not be the best move long term.
Yay for being accepted into Mohela! Do your non-payments now count? Just curious. I’ve heard there are LOTS of errors with this program so you might inquire about deferred payments counting.
Yes, the current non-payments count, but I guess the current period of non-payment is not a “deferment/forbearance.” IDK – I find the whole process to be quite confusing and convoluted.
RE the car – the main benefit to paying off the car is just to have the loan gone and pay less toward interest. I do, also, put money toward savings/retirements/college accounts. For retirement, I invest 8% (my employer matches the first 7%, so its a total of 15% retirement contribution). The savings vary based on life circumstances (e.g., paused short-term savings while paying legal fees), and the college account savings are super minimal – $50/kid/month. But I do work at a state university, so my kids will have steeply discounted education if they go to a state school.