Do you ever feel like, ‘damn this is a grind’? My December 2018 student loan payment just posted, and it’s definitely how I feel right now. My balance is now at **$164,137.35 **— ouch.

My loans are currently in deferment until January 2019 and February 2019, but i’m on a quest to pay off my $170,000 of debt by the end of 2019. My payments will ratchet up to a point where, in aggregate, about 70% of my post-tax income will go directly to student loans. Let’s break down this month’s payment.

**Focused on a single loan group**

I’m following the debt snowball method for paying down debt. Listing each loan group smallest to largest, and paying it off in that order. Starting in January 2019 I will have minimum payments required, at which point I will make the minimum payment as defined by the US Department of Education. I will then make additional **principal only payments to the loan group with the smallest loan balance.** Right now, this is loan group B, which has an outstanding balance of $17,453.51 at an interest rate of 6.310%.

**Breakdown of the $2,000 payment**

This month’s payment had a principal/interest ratio of ~36/63. This means 36% of the $2,000 payment went to principal, 63% went to interest. For every $10 I give to the US Department of Education, $6 goes into their pockets as interest. Yeah, this sucks — this is the grind I feel right now.

The reason over 60% of this month’s payment went to interest is because the original loan amount was $18,170 which accrued interest at a rate of 6.3% since it’s first date of disbursement in 8/2016. A 6.3% annual interest rate is a daily interest of 0.000172877% (.063/365), which is around $3.14 of interest accrued PER day. There have been a little over 2.5 years or ~900 days since the loan was first disbursed, which represents 900 days x $3.14 ~ $2,866 of interest accrued, and capitalized to principal.

This interest needs to paid down before principal is reduced. The reduced principal (currently $17,444.53) is the new balance through which interest is applied. This is a long way of saying that interest does not stop accruing until I reach a very low principal balance where the daily interest rate is negligible ***sigh*.**

**Where are we now?**

The table below represents my loan payments to date. In aggregate $11,916.69.

The good news is that with this renewed sense of intenionality and focus I have been able to pay off 3 of the 9 loan groups — following the debt snowball method of smallest to largest. The loans identified as ‘PIF by borrower’ (paid in full) represent a $0 balance.

Beyond ratcheting up my payment to 70% of my take home pay in the coming months, i’m also getting a second job to earn extra $$ to throw at the debt. It will be in a sales or commission based capacity — I am a fan of sales and think if you can do it right, there’s unlimited potential. Also, i’ve got a roommate! This will offset about $800 a month in rent, a big deal in the San Francisco Bay area. I’ll have a post dedicated to ‘money hacks and roommates’ coming soon. Onward to being debt free by the end of 2019!

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