For the month of March, I did not make any payments at all. I had a couple of setbacks in life. My contract position ended earlier than expected due to lack of business needs which led me back to my part-time job.

So at the end of March, I am currently in higher debt than I was last month. I accrued $340.53 in interest.

The good news is those accrued interests are not being capitalized and I have 50% subsidy on them since I was approved for REPAYE program last month. I discussed extensively on how I came to my decision to go with the REPAYE program on my Private Loan vs Federal Loan: to Refinance or Not? post.

The 50% interest subsidy essentially cut my accrued interest by half compared to before I entered the REPAYE program where each month ~$600 of interest was accruing and being capitalized.

I care about capitalization because the interest I pay each month is calculated based on a percentage of my principal balance (not listed on my statement). If my interest is capitalized, this means the interest I accrued this month (in my case $340.53) will be added to my principal balance leading me to pay more interest next month.

However, with REPAYE, while I still accrue interest, since it is not capitalized, my principal balance stays the same month to month. So if I make no payments next month, the interest that will accrue will stay at $340.53.

Goals Moving Forward

The REPAYE program allowed me to make $0 monthly payment until next year which definitely puts my mind at ease in times of financial instability. Can you already tell how much I really like the REPAYE program?

I just accepted a new job offer this week and should be starting in the next two weeks so I do plan on making more payments next month where I plan to put my focus on paying off the remaining $7,662 balance on my highest interest rate loan.

My goal overall has not changed. I am still planning on tackling my debt aggressively until I have lowered my debt to $100,000 at which point I will reassess my priorities as I do plan on buying a home in the next 3 years as well.