I had been a legal adult for about five minutes when I got a stack of paperwork from my college. Words like "subsidized" and "forbearance" and "default" floated on the pages that I 100% did not read. I was brand-new to college and I knew that this paperwork was what I had to fill out to get the financial aid, including student loans I needed as a low-income college student. I filled out those forms every semester until I graduated and never paid too much attention to how much debt I was incurring.
When I graduated four years later, I owed $30,000. Given that I made a whopping $25,500 a year in my first job, I signed up for the income-based repayment plan and dutifully sent in about $70 a month. This helped build my credit score (because I was diligent about never missing a payment) but I barely touched the principal on the loans, so when I put the loans in forbearance a few years later to start grad school, I still owed … about $30,000.
I eventually finished both a master's and doctorate degree, which was exciting, but I now owed $65,000, which was a number that honestly didn’t quite seem real at first. When I got my notification about my payment plan options, I did the math and figured out that if I followed the suggested payment plan, I would make my last student loan payment during the spring of my son's senior year of college.
Given that my son was in second grade at the time, I couldn't shake the feeling that it would feel like these loans were hanging over my head for his whole childhood. I didn’t want that, so my husband and I decided we were going to get aggressive about paying off these loans, with the goal of getting the loans paid off in 10 years or less.
Six years later, I made my final student loan payment.
I'm a huge believer in breaking down taboos around talking about money, so I'm all about sharing how we actually did it. That said, I want to be upfront about two things. First, this is not one of those stories where I'll casually drop in that I got a bunch of money or a super well-paying job from my family. There was no family support on paying off this debt, just me and my husband. Second, although the debt was a lot to deal with, I don't regret getting student loans. Student loans were one of the tools I used to get an education that has led to a life that I'm really proud of, and I'd take out loans again if I had to do it over again (maybe not as many, though!).
Getting out of that much loan debt took a combination of big and small choices and a little bit of luck along the way.
I should also note that I'm a fan of the prospect of loan forgiveness programs for other borrowers. I want everyone to have a life free of loan debt, however that has to happen!
First things first: We had to get out of credit card debt.
When I finished my first college degree, I had student loan debt and a lot of credit card debt. The interest rates on the credit cards were way higher than the interest rates on the student loans, so when I was in grad school the first time, I put my student loans into forbearance and focused on getting out of credit card debt first.
By the time I finished grad school, I'd paid off the credit cards and started an emergency fund so I wouldn’t have to go into credit card debt again. When it was time to start paying back the student loans, I was able to be more aggressive because I didn’t have any consumer debt to tackle as well.
It also turns out that figuring out how to pay off credit card debt was really good training for building the habits I needed to pay off my student loans, so when it came time to get aggressive on loans, I already knew what to do.
We started with making some controversial choices.
When I started creating our "suck it student loans" budget, there were a few things that were nonnegotiable. First, I would continue to contribute to my retirement accounts so I could get my employer match and build toward a stable future when I'm older. Second, we would not start college savings accounts for our two kids until my student loans were paid off. Although some people were shocked by this, I reminded them there are loans available for my kids if they need them, but there aren't any loans for retirement! It also just didn't feel right to be putting money toward my kid's college funds while I was still paying off my own education.
The other choice we made was to not go on a strict "rice and beans" budget. We would be aggressive about paying off the loans, but we’d still do some family vacations along the way and I'd say "yes" to signing the kids up for activities like soccer and swim lessons. We opted for less expensive vacations (such as a beach trip in the off-season or renting a cabin four hours away instead of flying places) and parks-and-rec soccer instead of the expensive travel teams, but I knew that staying motivated to get after debt is easier when life isn't all about deprivation.
I embraced the side hustle and increased my earning potential.
I'm not totally sure what it would be like to only have one job at a time, to be honest. I've worked full time since I graduated from college (including during grad school) and I was the queen of the side hustle before we even knew what a side hustle was! One of the best ways to pay down debt was to bring in more income and have all that income go straight to making extra loan payments. I took on more freelance writing, tutored, did consulting work, and even took on house-sitting jobs from time to time.
During this time, we also made the decision to move to take a primary job that paid better. This was a pragmatic choice because not only did the job pay better but it also was in an area with more options in my field, so it seemed likely that my future career options would be better too. This is also where a little luck came in.
First, and most importantly, we fell in love with our new state and are happy to be here for the long-term. Second, after about two years, I moved to a new job that offered both a higher salary and student loan repayment assistance. Every year I worked there, I got an extra $2,500 to put toward my student loans, which was awesome.
Every windfall had a plan.
One of the other choices we made early on was to determine that every financial windfall we got would go 60% to student loans, 20% to savings, and 20% to a travel fund. Over the years we were paying off the loans, our windfalls included tax refunds, COVID relief payments, and back pay from a work situation involving a raise that was overdue. All of those things really helped, especially because they went directly to the principal of the loan.
As I got cost of living adjustments or pay increases, I tried to put those extra funds toward paying the loans instead of redoing our budget. Because I wasn't used to having that money, I didn't miss it when it went to the loans instead.
I made frugal choices.
Managing money and getting out of debt is just about math. I figured out that we would need to average paying about $1,000 a month to pay off the loans on the timeline I set. (My goal was to pay off the loans before my son started high school.) Part of that would come from making more money and part of that would come from keeping other expenses lower to free up cash to pay the loans. For us, that meant things like driving our cars for as long as we can to avoid a car payment. I'm driving a Subaru with 137,000 miles on it that we bought 13 years ago. My husband's car is 12 years old. We haven’t had a car payment in nine years, and that is super helpful.
During the time I was paying off the loans, we also bought a house. The standard advice is to spend no more than 30% of a person’s gross income on housing. We chose to be conservative and bought a house where our mortgage payment would be about 28% of our net income instead. Sometimes I wish we had a little more square footage, but not feeling house poor is pretty damn great.
Side note: An unexpected benefit of being diligent with the loan payments was that we got a great interest rate on our mortgage because my credit score was awesome.
We kept up the momentum.
For me, one of the biggest keys to paying off debt (credit cards or student loans) is to stay on track and to keep the momentum going, even when I’d sometimes get a little jealous of the fancy trips or kitchen remodels friends were doing. Being able to see progress was highly motivating, so I kept a chart and updated it every month with the new balance on the loan. Being able to see that number drop month after month kept me going.
I want to be honest: Sometimes it was tiring. Sometimes it was boring. Sometimes I just wanted to go crazy and do a big shopping binge. That was usually a sign that I needed to take a side hustle break and give myself a little more downtime.
We finally got my loan balance down to about $5,000 in 2021 and dipped into our savings to make one last big payment. The moment I hit "submit" on that payment was so satisfying! It was for sure a moment I bragged about on social media.
Since then, we’ve kept right on driving our old cars and living in our slightly too small house. But now the extra money goes toward 529 plans for the kids and our first really big vacation since the pandemic started. That trip later this month will be epic, especially knowing that we’re not going into debt to make it happen!
