Student Loans

If you have been reading this blog or even glancing at it, you already know that I have Student Loans that amount to $80,000.00. I have a reasonable interest rate and a manageable monthly payment.

I say the above statements because I am gainfully employed.

I say the above statements because I am capable of repaying my student loan, monthly, and understand that I responsible for this loan. That I responsible for the money that I borrowed years ago to obtain my education. The education that allows me to earn the income I earn today, and live the lifestyle I live today. However, I am not happy that as a single individual my Adjust Gross Income (AGI) next year will prevent me from taking my STUDENT LOAN INTEREST as a deduction. I am not happy, that over the last three years I pay more in INTEREST than the allowable DEDUCTION.

So to reduce the amount of interest (%) I pay, yearly. I decided to start automatic withdrawal from my checking account. I prefer to pay my bills directly. I don't like companies to reach their grubby little hands into my account and take their money. I like to "release" my money to those grubby little companies, on my own terms. LIKE WHEN I FEEL LIKE PAYING...before the due date or on the due date.

I digress. With automatic withdrawal I should be able to obtain an interest rate reduction, immediately. And then an additional one after so many months of them TAKING my money. Well, I could not confirm this information on the website. So I call Customer Service and below is my interaction with the girl who I could barely understand:

"I am calling for additional inforamtion on Checkmate. I would like to know if I enroll do I receive an interest reduction now, and another after a duration of time?"

"Well. You do qualify. However your interest rate is already low. So. Your interest rate would not be reduced if you enrolled." said the Customer Service Girl.

I was puzzled!? "You said I do qualify."

"Yes."

"Yet, because my interest rate is already low, 3.5%, I will not receive another reduction?"

"That's right."

I was really not puzzled anymore, I realized I was talking to miss underwhelmed with her job. "Why don't you put me on hold, and ask your manager if what you are telling me correct. I owe $80K, and true 3.5% is low however it's not low enough...when your talking about $80,000.00. Moreover, establishing automatic withdrawal requires some advanced planning on my part, and I want the efforts to be rewarding in an interest rate reduction."

She put me on hold, returned several long moments later. "You do qualify for interest rate reduction of .25% when you enroll and then there will be another reduction of 1%."

"When will the 1% reduction be effective? 24 months, later?"

She mumbled something I could not understand, and then said, "36 months, is there anything else?"

"No, that will be it."

So I am working on enrolling myself in the automatic withdrawal program for my student loans. I will have an immediate interest rate reduction of of .25%, that will reduce my 3.50% to 3.25% (not much but enough to make it worth the time and energy). Aside from this interest rate reduction, I will also receive another rate reduction at some point of at least 1%. Taking me to 2.25%.

Now the other issue that I am CONFUSED ABOUT in capialized interest.

I am getting hit with more capitalized interest, that what I pay yearly. FRUSTRATING! How is that possible? Time for research!