If you’ve been with us since the start of this Our Progress series, you’ve seen where we began in terms of loans and income, as well as how our loan payments have looked in the past. We went into some detail on the hows and whys when it came to income and repayment amounts changing. Today we’re going to rehash the numbers and try to paint a clear picture of how everything has gone for us, but in fewer words.
I’ve put together this handy table to summarize the numbers we’ve talked about in the last several posts:
|Year||Adjusted Gross Income % Increase||Loan Payment % Increase||Student Loan Payments||Payments towards Interest|
What do I notice when I look at all of those numbers together? A few things:
1. Income has increased every year.
This is for a variety of reasons (which I spoke of in the earlier posts), but one thing is undeniable: Our incomes went up each year in large part because we took active steps that made the increases possible. Changing jobs, moving to a less-saturated area, and picking up a commuting part-time job were all big decisions that took sacrifices on our part. We’re happy we made them.
2. Student loan payments have (mostly) increased.
Aside from the little blip that was 2014, for the most part our student loan payments increased with our income, as they should have.
3. Student loan payments have (mostly) increased at a higher percentage than income has increased.
Again, aside from 2014, our payments as a percentage of our income increased. As an aside, it’s probably also worth noting that although I didn’t show specific income numbers, our loan payments were typically between 30-50% of our AGI. I’m not sure if those are good numbers or not, but for a couple who is trying to get rid of their debt ASAP, the higher the better.
Overall, looking at the table, it’s hard not to feel a mix of emotions. We feel good because we see the numbers increasing and realize we’ve made a ton of progress. On the other hand, it can also be depressing to see just how much money we’ve spent paying back the loans (the interest alone is unbelievable!) and realize we still have so much farther to go.
What gets really depressing is realizing this: If you remember from our first post, we ended up with a grand total of about $465k of loans at graduation. Even after paying off almost $285,000 of that amount, we still have nearly $270,000 of payments to make before we are free-and-clear! So, after almost 6 years of paying back the loans with payment amounts that went far above and beyond our minimums due, we’re still in the hole for about the same amount we’ve paid off. If that doesn’t take the wind out of your debt-paying sails, nothing will.
What do you think of our loan payoff numbers? My hope is that, to the majority of you, those numbers are right in line with or even behind where you are in your own repayment. I would guess that it’s highly likely most readers of this blog who are healthcare professionals had starting salaries that were much higher than we did, so matching our payments probably shouldn’t be an issue. The good news is, even if you’re not where you want to be yet, as far as your repayment goes, it’s never too late to reset your goals and increase your loan payments.
Did you notice what I snuck in there, a couple paragraphs up? From the get-go, we’ve made a point to differentiate this site from other personal finance blogs by focusing on the fact that we are still in debt. We are going through this in real-time, monitoring our progress on a regular basis in hopes that we can encourage others to get rid of their student loan debt as fast as they can. Until now, we haven’t revealed just how much debt we’re still in
$270,000. That’s what we still owe after 6 years of making payments. That number in itself is a scary one (it’s a great house in most parts of the country!) but it looks a lot better than where we started. The goal is to get it paid off much quicker than the first $270,000 we paid down.
And that’s another thing we haven’t talked about: Our payoff strategy moving forward. Really, we haven’t described our strategy in the past either, other than the fact that we were paying just as much as we could as fast as we could.
The truth is, in mid-2015, we finally sat down and wrote out a goal for when we wanted those loans to be gone. We’ll get into the details of why we set that goal in a future post. For now, we’ve described what the loans were when we started, how our incomes have grown, how our payments have grown, and what that process looks like in summary.
Let us know in the comments how each aspect of your Student Loan Story compares, and then head back over to the Homepage to see the latest and featured posts.
Hopefully you’re enjoying what you’ve read so far; we appreciate you being here!