It seemed impossible. Paying off over $55,000 in student loan debt $409 a month at a time. But then something happened. My student loans got tossed around from CFS to Chase and then back to ACS, my original loan company.
I realized then that I could either suffer and stress out over the next twenty years, or I could go on a crash financial diet and lose the weight of my ACS student loan off my shoulders once and for all.
I started this crash financial diet a little over three years ago. Here’s what I did:
- Closed my credit cards down, except for my AMEX.
- Extreme couponing. I got my binder, clipped my coupons, and studied blogs like hip2save.com, southernsavers.com, and wesusecoupons.com I got so good, I was getting tons of stuff for free or making money from buying certain items and I grew my own stockpile.
- I stopped buying clothes for almost a year. And I stopped going to malls.
- I cancelled our Costco membership.
- I worked my ass off. I networked on LinkedIn and made sure my profile was updated regularly. I’m a freelance copywriter, so I took every gig I was offered and worked hard. I put 100% into every job. And agencies kept calling me back. I worked morning, afternoon, and late into the night. Sometimes well past midnight.
- I socked away 30% for taxes. And then I saved and saved and saved. Two years ago, I slapped down $27,000 in a single payment to ACS. The instant I did that, the coolest thing happened. The amount towards my principal changed. Before when I sent a $409 payment, $300 would go towards interest. Now $300 for every payment was going towards principal. Every time I made additional money, I sent additional payments. Sometimes, it was just an extra $100. And sometimes, it was an extra $2,000. I basically let go of the money before I had the chance to enjoy it. I knew it was meant to do more than buy the latest purse.
- I continued to work like crazy. And just sent my final payment 10 minutes ago!
Doing this crash financial diet was hard. You have no idea how hard it was not to go buy a car or go on a fancy trip or go shopping for purses and new pretty shoes. But the end result is worth all of it. I saved about $60,000 in interest and shaved off 15 years off of my student loans.
So what next? I figured if I could conquer my student loans, why not conquer my house? My goal: pay my house off in less than 10 years. We’ll see.
euphoria meets holy crap meets badass 
Congrats. Great job. I also did a lot of re-inventing after our layoffs. Hard work, saving and smart decisions make a huge difference. Enjoy your new freedom.
Thanks Nancy! I can’t believe it’s finally done. And I don’t have to worry about ACS ever again. 🙂
YAY!! Excellent!!! Well done!
— Lauren
http://www.thelvds.com
O Mai….seriously? Congratulations! Its sure is hard! And I have future student loan to pay off one day, and your survival story make me ‘cry in relief’. You make me believe I can avoid any bad debt. Huhu ^^
Congrats!! I have a little over 2K to pay them off. They are the worst company EVER!
Hi there!
I’ve been reading over your nightmare with ACS because my loans got sold to them years ago and it’s been horrible, as you know. I’m even scared to try to bump up the monthly payments in feat they will see it as a chance to screw me over more. What I really want to do is apply ADDITIONAL funds to my principal, but I have had them tell me I cannot do that, and it just gets applied to future monthly payments.
In an earlier post you made, you said you had a trick to getting most of an additional payment applied to principal, by payingthe day after your due date. Does this still work? Could you clarify exactly how to do that through the website? Or do you have to call in a payment?
Congrats on getting free of them and thank you for any advice. I have around $14500 to go and I want it OUT OF MY LIFE!
Hey Katrina,
While ACS doesn’t permit additional principal payments per say, there are a couple of ways (assuming you have a fully amortized loan) you can get rid of your loan early/for less than the full interest amount.
*Future Monthly Payments and moving ahead your due date: You are reducing the amount of principal that interest will accrue on. Assuming you keep ahead of your due date, you will reduce the interest amount and time on your loan saving you money. While there will almost always be some interest component to your payment, if you are paying frequently you will see smaller interest amounts. For a larger sum, what you should see is the amount going to interest is the same regardless if it is your normal monthly payment or more. If you keep ahead of your payments, you reduce your overall cost. If you pay ahead then simply quit paying until the next due date, you would end up in the same place you would have been making the normal monthly payments. Personally, my little game is to keep pushing the due date further and further out.
*Changing prepaid status. I have never used this personally, but what it appears is going on here is you reset your due date that was pushed out paying extra on your loan. In that situation, some of us may see that date four/five months out and be more likely to take a month or two off of payments losing some of that progress that was made. As noted above, if you push your due date ahead but then quit paying until that due date comes back up, you are not doing yourself any favors. If you manage to due dates, changing the due date on a prepay forces you to keep that extra progress you made. Unless you really need the motivation of that impending due date, I don’t believe changing the due date is the best method because it does increase risk of if you move your due date up than miss/late pay it, I would suspect ACS has all kind of fun fees, again wiping out the extra progress you made. But then again, some people need that pressure to keep on it.
My wife has a huge loan with ACS: $134,000, and it’s an extended 30 year loan, so a ton goes to interest, and very little to principle. I have some extra $, and want to pay down a bunch of the principle, but they at ACS have told me I cannot do this. Are these people crooks or what?
My wife has her student loans with ACS. It was better then her previous option of default status and 15% being taken out of her paycheck. ACS was the only option they gave. That totaled about $550 a month, now its $305 a month but mostly interest. She has about 41K to pay it off. Now she out of default and in good standing and we are repaying. We just cannot figure out how they calculate the principal and interest, she can pay the same day each month and it varies greatly. We made an extra payment of $200 to test the waters and they still charged $16 in interest. We don’t understand. Do we make huge extra payments or save for the full amount? What happened when you made the smaller extra payments?
Thanks for your comment. What I learned is that interest accrues daily. The only way to make the biggest impact is to know the exact day the monthly payments are made and then the same day or next day, add your additional payment.
By doing so, maybe only $10 has been accrued in interest versus $200 if you wait 3 weeks to do the same.
My strategy was this.
1) Make regular monthly payments
2) Every time I made extra money ( I am a freelancer), I made the extra payment in large sums the day after the monthly payment hit.
3) After I got my total to half ($60,000 to $30,000) that is when the interest and principal portions started to flip. Like instead of $250 going to interest, $250 started going to principal. At that time, I started to send regular extra payments every month the day after the monthly payment was made.
4) I also did extreme couponing, so I was able to save an extra $500 a month from that and use that money.
Long story short, I made a goal. I lived very meagerly and paid of the last $55,000 in three years.
(Mind year, I graduated from grad school in 2001, so I had been paying $409/month for 12 year = $58,896 + the extra $45,000 in additional payments I made over three years).
Had I not done this, I would have paid an estimated $70,000 in additional interest.
Hope this helps and good luck.
I don’t know if AES, ACS, or Salliemae is the worst, but they are all terrible. Thanks for the advice and for letting me know that it’s ACTUALLY POSSIBLE to pay these monstrous loans off.
And most of all, CONGRATULATIONS!!!!!