Student Loan Hell

by Kelly · 7 comments

in Money & Spending

I’ll be the first to admit that, as in control of my day to day finances as I am, I’m really clueless when it comes to my student loan debt. In my head, I owe $60,000 for three years tuition at a private university. I think it’s a bit less than that, but I’m not really sure. I know I have loans with two different companies or organizations, but why? Again, not quite sure. I’m only paying on one of them at the moment because the other is in… deferment? forbearance? You guessed it: don’t really know.

All that is going to change this week. Yesterday I received two letters; one from EDFinancial and the other from National Collegiate Trust. It seems as though my student loan from one is being transfered to the other. That’s ok- I just have to call and make sure, but the real shock? The payment schedule. 24 payments beginning in August 2008, 333 payments beginning in August 2010 and 1 payment in May 2038.

That’s right, I’ll finish repaying my student loan, according to this schedule, in thirty years.

Thirty years. Gulp. So my project for this coming week is to understand as completely my student loans as I do the rest of my finances.

I’ll begin by going to each of these organizations’ websites and then contacting their customer service department. I’ll make sure to ask how much I can overpay every month and especially how much of the extra payments will go to interest and how much will go to principal. I’ll also ask about other payment schedules, as the payments they have me making are about 1/2 of what I’m currently paying. Unless this isn’t actually my student loan being transfered from one company to the other, but the other student loan entering repayment status. But again. I don’t really know!

What do you think? Is there anything else I should ask? Any other advice?


1 ashe May 23, 2008

You may want to look into consolidating your loans, as well. Happy learning!

2 Mrs. Micah May 23, 2008

Good luck with that! One of the toughest things we’ve had to figure out with debt repayment is how to make sure extra goes to principal, so that we pay less overall. Good luck with that!

3 Rachel W May 23, 2008

you should make sure there aren’t any prepayment penalties, too.

4 May 24, 2008

I’m not familiar with the specifics of student loans, but with the loans that I’ve had (credit card, mortgage, HELOC, and business loans), we’ve always been able to pay as much extra as we like, with all of the extra going towards principal (assuming no prepayment penalty). The company might make you write a separate check with “principal payment only” in the memo line, but hopefully they won’t be applying extra payments towards interest. Good luck!!

5 Frugal Trenches May 25, 2008

Wow, student loans are tough – particularly US and Canadian ones. I’m not sure but I know some people consolidate them?
This is one reason why a lot of US families I know stay here in the UK – the cost of College!
Good Luck!

6 Anonymous May 26, 2008

Hi, I am an American in Paris (married to a Frenbchie..). I also moved here with around $50k of US student loan debt. I tried for many years to transfer euros into my US checking account, paying transfer fees, etc. but my loan balance never went down…even with paying extra. It was endless! Finally in Decemeber 2007, I visited my French bank for a loan, allowing me to take advantage of the weak dollar. I erased 43% of my American debt, just on the exchange rate, and will be finished paying off my loan here in 2.5 years. Besides reducing my US loan significantly, the greatest things is having a SET time frame for the loan. Now I know how much I will pay and how long I will pay, clearly. Bon courage!

7 Ken Clark, CFP May 28, 2008

Let me know if I can help you track down any answers!

Ken Clark, CFP
Guide to Saving for College at

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