Category Archives: Debt Destruction

Student Loan Forgiveness for Non-Profit Employees

student-loan-forgivenessAs I sat at the head of the conference table for our weekly team meeting in our non-profit office to talk about fundraising—we got off topic. The topic was ways to save money and student loan forgiveness because pretty much four out of six of us are frugal, money-minded folks. The youngest, just out of college, says “Because my life’s work will be in non-profits, I’m going to make sure and pay my next 120 student loan payments on time so I can get my loan forgiven.”

I say, “What? Tell me more about this!” Especially since I’ve spent my career in non-profit work (minus the two years I owned a catering company).

So he sends me this link.

And this became my understanding of how it works.

“If you’ve worked in public service or non-profit organizations you can get your loan forgiven.”

  • The loan has to be a direct loan and you have to have made 120 payments…but they don’t have to be consecutive.
  • This rule began in 2007 and student loan borrowers can begin applying for forgiveness in October of 2017. If this is you, you can start collecting and filing paperwork now and it send it in…they’ll hold on to it for you for when you hit the 120th payment.
  • There are some other rules on what types of loans apply (direct loan) and if you’ve consolidated or not. Check out the link if you’re not sure.
  • You have to make qualifying full monthly payments after Oct. 1, 2007 and be under a qualifying repayment plan. You can’t be past-due and the payments have to be while made you are employed full-time by a qualifying employer.

So I got REALLY excited. All of this seems to apply to me.

I have my own student loan forgiveness plan. I’ve worked in non-profit, minus the two years catering…and I make all of my payments on time. So I’ve outlined my game plan below and when I think I may have my $22,000ish in loans forgiven.

Step One: Begin compiling my work history and get it verified.

  • October 2007-August 2008: Worked full-time at an institute of higher education. (11 mos).
  • August 2008-October 2009: Worked part-time at an art center (14 mos). This may not qualify because I was considered part-time. Plus, I lost my job at the institute of higher education and my loan was in deferment some of this time…I think.
  • May 2011-September 2014: Worked full-time at a museum (40 mos).
  • September 2014-present: Working full-time with a performing arts group (25 months at present Nov. 2016)

Total months: 76 months. Still need 44 months (3 years, 8 months) July of 2020 maybe?

Step Two: Make sure my student loan qualifies
It’s unclear by looking at my student loan paperwork if it’s a direct student loan or not. By reading all of the information about student loan forgiveness, it looks like it probably is, but it’s not clearly marked. Also, I’m not sure when I went into deferment. I’m hoping it was in the gap period where I wasn’t working full-time with a not-for-profit.

Step three: Let them tell me if I qualify.
I’m really hoping that once my paperwork is turned in, that they will tell me if I qualify or not. People can start taking advantage of this opportunity as early as Oct. 1, 2017. I also hope that this opportunity doesn’t go away.

Check out these other resources like this fact sheet and these Q&As

Tell me…are you planning on doing this too?

How I paid off my Lexus in 22 months

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This Wifes Life Lexus PayoffI almost feel like I need a quick disclaimer on why someone who is frugal would a) finance a car and b) buy a luxury car like a Lexus. Here’s the story.

Twenty-three months ago I was driving a Volvo XC90 and with was a huge POS. I purchased it from a friend for $8,000 and soon realized there were a plethora of things wrong with it–most notably, the odometer didn’t even work so I didn’t even know how many miles it had! Plus, every time something broke down on it (and this was often) it cost at least $2,000 to repair.

So 22 months ago, my husband and I had our eye on a Toyota 4Runner at a Lexus dealership. I will admit, I had always wanted a Lexus and sort planned this out to look at the used Toyota at the Lexus dealer. We drove the 4Runner and hated it. The car salesman suggested we try a Lexus RX350. We did, and the rest was history.

And as to why? The Lexus was actually $10,000 less than the 4Runner. It is a 2010 and had 70k miles, but, come-on, it’s a Japanese car that will run virtually for 300,000 miles. Because of the high miles and with my trade-in for the POS, I financed $20,000 with a car payment of $405.80. If I would have paid the minimum for the 60 mos. the total would have been $24,348. Overall, the Lexus is a safe, excellent quality car that will last me many more years.

Emotionally, I justified the purchase as a 40 year birthday present to myself and I had just passed a major accreditation in my field of work…time to celebrate. I financed the car because I didn’t want to wipe out my savings account to buy it and I was worried the Volvo would break down and keep costing me money in repairs. I also knew I would pay it off quickly.

How I did it?
1. Paid more than the minimum payment–always.
2. Paid toward the principal balance (although Lexus Financial doesn’t make this easy…I had to mail the payment in)
3. Every penny of my side-hustle went toward paying extra to the car loan
4. Made this part of my debt snowball and got after it. This is done by paying the minimum to other debt then taking as much as possible from my budget to pay extra.
5. Enjoyed watching the balance dwindle.

I’m so happy to have purchased this car. It will last me for years to come. Getting it paid off early and being able to move on to the next debt (my credit card) is one more step closer to becoming debt free, financially independent and retiring early.