Feb 18

My Secret For Paying off $30K in Student Loan Debt

student debt survivorWhen I finished graduate school I owed $30,304.87 in student loan debt. Curious about how I got myself into that mess? I wrote about it here: Student Debt Denial and here: My $30,000 Student Loan Mistake.

Before I started graduate school I had accumulated $20,000 in undergraduate student loan debt. Fortunately I had some sense (you were starting to wonder right?) and was able to pay for most of my graduate school education with part-time jobs and money I’d saved working before graduate school. I’d also paid off about $5,000 of the principle on my undergraduate loans in the two years between undergrad and grad school.

Frustrated with the $350 a month loan statements that kept popping up in my mailbox, and the realization that I’d be paying $11.5K in interest if I paid the loans back over their, “normal” term (10 years!), I buckled down and paid off the remaining $25,000 in student debt in just under 2 years.

Often, peers who are still in student loan debt, ask me how I did it? Well… here’s the secret: There is no secret, shhh! I lived frugally, worked hard, and sacrificed doing, the, “fun” things that my friends were doing (going on vacation, buying new cars, buying new clothes) for 2 years, so I could aggressively pay off my debt. Here’s what that looked like:

  1. I took my first post-masters job ($42,500) then worked really hard and got promoted into management (= a better salary). **Yes I made more with the promotion, but I still would have been able to pay off the loans in 2 years, had I not.
  2. I made a strict budget and stuck to it. If it wasn’t in the budget I didn’t buy it-Simple, right?

    Screen Shot 2013-02-17 at 11.03.21 AM

  3. I broke down my debt so it was manageable. $25K is terrifying,  $12,500 per year for 2 years or $1041.67 per month felt more, “do-able”.
  4. I moved in with a roommate (the bf) so we could share rent and expenses. As you see above, my portion of the rent was $900. Bf was kind enough to pay the electric and Internet bills. I paid for grocery and household items.
  5. I started cooking our meals at home to save money and I started couponing to buy our toiletry products and paper goods, you’ll notice my grocery budget was pretty minimal thanks to my couponing. I swear we ate real meals and not just pringles and granola bars. “Real” food is actually cheaper then processed junk food, is better for you and lasts a lot longer-you can eat a whole chicken for at least 3-4 meals.
  6. I didn’t buy a car. Don’t you know when you finish your degree you’re supposed to buy a new car? Side note: I had a car before grad school but sold it because I didn’t need it and didn’t want the hassle (Parking in NYC is a nightmare and really expensive). Plus an added bonus, I used the money from the sale of the car to pay for my rent and living expenses one semester.
  7. I worked extra jobs (any work I could find! Beggars can’t be choosers-babysitting, dog walking, freelance writing, online surveys, beer rebates, you name it, I did it) That income was not accounted for or included in my monthly budget/expenses above.

That’s really it, I didn’t sell my soul to the devil, or sell drugs to children, or become an escort-not that I’m judging! I just worked really hard and made, “good” financial decisions. There’s no secret or magic bullet. Believe me if there was I’d bottle it and become a millionaire.

Have you paid off a substantial amount of debt? What was your “secret”?

Image: StockMonkeys.com

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  1. Our secret is just to be conscious of our spending and to honestly evaluate each purchase as a want or a need.
    We threw out the wants and the debt started to fall away real quick

    1. Good strategy! Once you figure out the whole needs/wants things, it’s much easier to plug away at the debt.

  2. I use any unexpected money that comes my way to pay debt or bump savings. A store refund, tax refund, bday, christmas money… it really ads up.

    1. Absolutely. This year’s tax refund will be going directly to savings. Ditto for the money I made cat sitting this weekend.

  3. We are throwing almost all of my extra income at my student loans. I can’t wait until they are gone!

    1. If I remember correctly, you’re really close. Goodluck with the last stretch!

  4. Big congrats to you for paying off such a huge amount in such a short amount of time!!! 🙂 That’s awesome!

    1. Thanks Mackenzie. I won’t say it was easy, but once I got in the swing of things, it just felt normal to pay them down aggressively.

  5. I had the same secret…watching my expenses, being frugal and throwing anything extra I could earn at the debt. It did take some hard work, but was so worth it in the end.

  6. Congrats! I buckled down, but at the same time didnt if that makes any sense. I did live at home after college for a bit saved enough but due to having to move out I bought a condo (paying someone elses mortgage in the current market didnt make sense to me). I now am working to build my income streams to put more towards debt every month!

    1. Everybody has a different plan or strategy. As long as you’re doing what works for you and you have a plan to pay down the debt that’s all that matters. Glad to be following your debt free journey 🙂

  7. Those are some great ways to kick debt to the curb! Great post!

    1. Thanks 🙂

  8. I think your real secret is dedication. Your tips aren’t really secrets, but your motivation is more of the secret. Nice work on dealing with it.

    1. Yup, I wish there was a secret, but dedication is really the name of the game. There’s nothing really unique or special about what I did, anybody can do it, they just have to be motivated and dedicated.

    2. Agreed! Congrats on doing it and sticking it through to the end! I did $10k in school related debt one time in sixth months and thought I was so dang special. You rocked it.

      1. You’re special too! 10k in six months is amazing. Well done!

  9. I agree with Grayson! You’re real “secret” was your dedication and motivation! I wish my income was higher so that I can pay off my student loans as fast as you did, but I know I’m currently doing the best I can while still enjoying life (frugally) 😉

    1. Gotta still have some fun or life isn’t worth it. You’re just living to pay debt and that’s no fun. You’ll get there!

  10. Major congrats to you for being so aggressive with the debt payoff. Your story is really inspiring

    1. Thanks 🙂

  11. I’ve paid off 13k of 68k, so still have a lot to go. I am trying to manage it by years and not think of the 55k because it gets overwhelming. I am doing the same thing as you, but making a lot less money currently….I know this won’t last forever and as soon as I get a better paying job I will put even more money towards my debt! It’s nice to hear stories of survival….sometimes I get so sad and frustrated reading all the new stories about people defaulting, suffering and can’t pay their debt back. I made 20k last year, but getting out of debt is still my number 1 priority so I am trying to make it work

    Congrats on accomplishing such an awesome goal!

    1. 13k is a significant amount of debt! I know it can be overwhelming and scary, but don’t let it take control of you. And don’t think of the bigger number. When I thought of 30K it seemed impossible. Hang in there. The whole purpose of me starting a blog was to share my story and tell others that it can be done. There’s nothing special about my story or what I did. Anybody can do it if they’re dedicated.

  12. I’ve been paying mine off very gradually, all $35,000. I currently have $4,000 left five years after graduation. I “played the spread”, a possibly risky strategy that is essentially investing money I could have paid the loans down with because I believed I could earn more in gains annually than the interest I would pay on the loans. Overall this has been a success. $25K in two years is incredible! Can you talk to my fiance about “just doing it”?

    1. Nice, sounds a little too risky for me, but I’m pretty financially conservative (usually because I wouldn’t know how to do the risky things-or I’d lose my “farm”). Definitely sounds like it worked out for you and that’s all that matters. As for the fiance, I’m sure she’d be thrilled to get financial advice from a no name nerdy personal finance blogger 😉

  13. KK, thanks for the inpiring post! I think it’s amazing that you paid everything down so quickly. It shows true strength and commitment, you know? We’re learning too that it’s all about choices. Saying no to spending $5 here or $10 there really does make the difference!

    1. You bet, I’m glad you found it inspiring. I’ve been following your blog and I know you’re saying no to the small purchases. It all adds up, so the more you can so “no” the better.

  14. Congrats on tackling that debt. I am finally finishing mine up (after having graduated college 15 years ago!). Way to adopt some great behaviors toward debt! You did all the right things. Wonderful!

    1. Thanks Tony. It took me a couple years to figure it out, but once I saw the interest I’d be paying that pissed me off enough to get my butt in gear.

  15. Impressive numbers. We’re in the middle of paying off CF’s student loans which started about the same level add yours. We are going to pay it off in two years, but conservatively budgeting for 3-4. All the extra income goes towards it, but we aren’t gin to sacrifice or next trip to pay it off a couple months faster.

    1. Thanks Brian. I’m a firm believer you have have some fun while you’re paying off debt. Otherwise life would be pretty miserable. I figured I had enough fun in college that I needed to sacrifice for a couple of years to get my mess straightened out 😉

  16. This is fantastic. Thanks for the inspiration. I’m currently at $37,000 down from $39,000. I’m trying to make much bigger payments. It’s really, really tough, but it helps me to know others have done it before me!

    1. Thanks Cat. It definitely can be done. I never thought I’d be one to be talking about it (and definitely not blogging about it), but I figured if I could do it anybody could. Congrats on your $2k paydown, that’s awesome! And exactly how I paid off my loans, a little bit at a time. Every little bit you can pay helps. Looking forward to your, “How I paid off $39k” post 🙂

  17. Awesome post and very inspiring! Goes to show what hard work and dedication can do. Some of your peers I’m sure scoffed at the idea of cooking meals every night and thought they deserved a car after spending so much time in school. I know it was tough while you were on that strict budget but I know you’re glad you stuck with it. Now you can look back and smile. Great job!

    1. Yeah, most thought I was little nuts. I don’t have crazy spender friends, but basically here everyone eats out all the time, so I definitely was declining a lot of dinner date outings. Luckily all my friends stuck with me and now I can treat so it all evens out.

  18. Awesome job! My secret is lots and lots of side jobs. Period. I just paid the last of my debt (had $20,000 and paid it off, then racked it back up), with selling things, jobs, jobs and more jobs. I took whatever someone gave me while Mr. FBS sold things and tried to work as much OT as possible. I also shhhh dropped some classes in order to pay it off quicker. Hey, if I don’t have the money for classes I can’t just keep going, and it wasn’t like I was quitting school completely or something.

    • Alex on April 18, 2013 at 1:31 pm
    • Reply

    This article was awesome!! Thank you. Being fairly new to the student loan debt arena I am constantly trying to gather as much information as possible to try and keep myself headed in the right general direction. Spending some time on this post has actually given me a lot of great points to think about. In my recent research I have also been able to find some pretty useful information related to this topic when I Googled the credit locker university. This was helpful as well. Thanks again!

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