Knocking Down the Student Loan Debt – June 2013

If you’re new to Money Manifesto, in December 2012 we decided it was time to open up to you, my readers, and shared our very first debt update.

Student Loan Debt Update – June 2013

June was another interesting month for us. Tori, my fiancee, is still using her short term disability insurance  since she can’t even walk at this point. As you may remember, our ex future tenant backed out of renting our townhouse, too. Between Tori not being able to walk (or work) and the extra expense and time involved to fix up the townhouse, it has been a busy and expensive month for us.

Luckily, we’re still in pretty good financial shape even with everything that is going on. Tori was able to make an extra payment this month, which is pretty awesome in my book. Of course, once things do finally settle down, the townhouse gets rented out and we’re married, we plan to kick things up a notch. We’re considering getting a 0% balance transfer credit card to try to save some money on interest. I think we’d be able to save at least a few hundred dollars that way. It is a tricky move, but we would make sure we don’t transfer more than we can handle.

We’ll also be combining finances, which means we can use some of my surplus and business income toward paying down her loans. At that point, things should really start taking off! We can’t wait until the loans are gone for good!

Private Student Loan 1 – 8.0% Variable

The current balance on this student loan is $3,997.22. This is a decrease of $685.10 since the last debt update. We are paying this loan off first because it has the highest interest rate and is also a variable rate. It originally was well over $20,000 when my fiancee began paying this down after college in 2011.

Federal Student Loan 1 – 6.55% Fixed

The current balance on this student loan is $7,606.05. This is a decrease of $117.06 since the last debt update. This will likely be the 4th student loan we pay off.

Federal Student Loan 2 – 6.55% Fixed

The current balance on this student loan is $7,146.80. This is a decrease of $50.22 since the last debt update. This will probably be the 3rd student loan we pay off.

Federal Student Loan 3 – 6.8% Fixed

The current balance on this student loan is $3,898.53. This is a decrease of $29.47 since the last debt update. This will be the second student loan we pay off because it has the second highest interest rate AND the lowest balance. On top of that, we hate the bank this loan is through so it gives us even more reason to pay it off.

Private Student Loan 2 – 5.75% Variable

The current balance on this student loan is $22,337.65… ouch! This is a decrease of $95.78 since the last debt update. This is the highest balance loan but it has a lower interest rate for now. Unless interest rates start rising we’ll wait to pay this loan off until the federal loans are paid off.

Private Student Loan 3 – 4.75% Variable

The current balance on this student loan is $8,211.53. This is a decrease of $25.73 since the last debt update. This is the lowest interest rate loan and, unless interest rates rise, this will likely be the last loan to be paid off.

Total Balance – $53,237.78 (-$1,003.36)

Our realistic goal is to have the student loans completely dead by the end of 2016. However, if things continue to go well with my side business and Tori doesn’t have to continue having more foot surgeries, we may be able to get this debt paid off much sooner than anticipated… more news on that in the coming months.

Do you have any debt you’re trying to pay off? Do you have a goal for when you want it paid off by?

Like What You See?

Join the other readers who have signed up for our email newsletter! No spam, just periodic updates to help improve your finances!

About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Fat free personal finance says:

    If someone has $278k in student loan debt, I don’t want them teaching my children anything.

    I’m interested to follow the progress of the townhouse. As you probably know, I don’t like the idea of owning rental properties and/or owning real estate as an investment. I hope Tori gets better and the cash start flowing in. Best of luck –

    • I don’t think I would either now that you mention it. Not teaching money at least!

      Our rental property cash flows extremely well and should turn out pretty good for us. Thanks for the good luck and I think things will be fine once everything calms down 🙂

  2. Wow, it has been a tough month for you guys. Congrats on being able to keep chipping away!

  3. 0% transfer huh? Your student loans will let you pay with a CC? Mine won’t. I wish they would because that would be a nice way to earn some extra points. I guess they might give you those “checks” but you have to be careful, some have a fee of up to 3% with no cap!

    • Nope, we’d have to pay with those checks. There is one card I’m aware of right now, the Chase Slate card, that has 0 fees on balance transfers. Other than that most of the better cards have 3% fees, which can still save you a good amount of money if you have higher interest rate student loans.

  4. Kyle @ Debt Free Diaries says:

    Wow, $278,000 in student loan debt? For a degree making you eligible for a job that pays $30,000/year on average? Terrible investment, in my opinion, and I’d rather not have that type of influence around my future kids.

    Great job at keeping things under control despite all the craziness that’s happening to your income.

    Leslie and I are working on paying off a bunch of debts, as we’re just starting our on our journey. Our plan is to have them paid off by the end of 2017 at the latest.

  5. So she gets engaged to you and then can’t walk? Hmmm….nothing suspicious there, dude. Nothing at all. 😉

  6. I’m sorry to hear about Tori’s walking and inability to work. That must be difficult on both of you, not just financially but emotionally as well. 2016 is a great payoff date for that much debt!

  7. I don’t know if you’ve looked at this before or not, but I thought I would mention it to you. While the majority of the private student loans have lower interest rates than the federal loans and your goal is to get out of debt as quickly as possible, I am gong to suggest looking at the full terms of the loans (not just the interest rate) in deciding what to pay off first. The federal loans have huge flexibility in worse case scenarios (like deferment and forbearance). While if used irresponsibly, these can get you in trouble (my 16k in undergrad loans turned into over 20k), they can also be budget savers if something untoward really does happen.
    Also, check to see if you have ways to lower the interest rates on the federal loans. All of mine had ways to lower the interest either through signing up for automatic payment, or making x number of payments on time. For one (graduate) loan, it was 1% off the top at the very beginning for auto payments and that was it. For another, nothing at the start, but down 1% after one year of on time payments and down another 1% after another year of on time payments.
    Private student loans often don’t have the flexibility or the ability to lower the interest rate. So while they may seem more friendly now, that might not be the case.

Share Your Thoughts