In June of 2012 my student loan debt balance stood at $158,716.50. I’d graduated from a top MBA program a few years before, only to struggle to find steady full-time employment during the recession. Once I landed a job that felt stable, I finally gathered the courage to add everything up and see where I stood. And it was scary.
I had seven loans, with interest rates ranging from 3%, for a small undergrad loan, through 6.8%, for some of the grad school loans. The total amount owed was overwhelming and I was so scared I had ruined my life and set our family up for failure. How did I begin to dig myself out?
First, I got a side hustle. My day job paid well, but I knew it was just a stepping stone to something else and I wanted to make faster progress. I started hosting home parties for a jewelry brand I loved and used the income to make extra payments on the loans. Second, my husband and I lived off of one salary, so we could put the other towards my loans. Third, we held most of our costs steady by not upgrading our lifestyle as we increased our salaries.
Student Loan Debt: The Early Years
In those early days it felt like paying off my student loan debt would be a never-ending process. It was this huge, insurmountable hurdle that had only grown during the months in deferment. Ultimately, I had to find the courage to just start putting one foot in front of the other and send in payments as often as I could, while having faith that progress would happen. But it was scary and I was petrified of another round of layoffs.
While it felt like slow going at first, by June of 2013 the balance was down to $132k. And we had fully paid off one loan, which brought my monthly minimum payment down by almost $200. (Side note: yes, we considered consolidation. But we ultimately chose not to consolidate in order to free up cash flow faster by knocking out individual loans. This felt like a safer move in our particular circumstances, because the monthly minimums would have still been high in both scenarios.)
I wasn’t great at tracking totals every month, but by July of 2014 my outstanding student loan debt balance was $118k. And by June of 2015 the total was at $102k and I’d paid off another loan, bringing the monthly minimum payment down by another $200.
Student Loan Debt: We’re Below Six Figures!
Around this time, I accepted a new job offer, which came with a major pay increase. The boost was a huge help and in August of 2015 we finally fell below the six-figure mark. In hindsight, I wish we did more to celebrate these major milestones. While we were momentarily ecstatic, progress still felt so slow and the balance was this huge mental weight we had to carry. Our financial situation was much better with my new income, but everything still felt so precarious.
Ironically, it was around this time that the large payments we were making started to really pick up steam, as more of each payment went towards principal than interest. By July of 2016 my total student loan debt balance was down to $80k. And by June of 2017 my student loan debt had shrunk to $61k. We’d fully paid off another loan and monthly minimums dropped by $300. While we hadn’t decreased our payments, knowing our minimum had dropped by $700 since those early days was a mental boost.
In retrospect, we were clearly making great progress, but the middle stretch is hard! We were five years into our student loan debt payoff journey and we were exhausted. We’d loosened up our budget a bit, but we really didn’t feel it since that extra cash went towards daycare payments. Still, I am so thankful I had a job where we could continue attacking my student loan debt aggressively while adding another major expense to our budget.
Student Loan Debt: The Final Stretch
In February of 2018, the outstanding balance dropped to $48k. Getting under that $50k marker was a huge milestone. For the first time in years, while I still had student loan debt, I finally felt like I could breathe. I don’t know if it’s the same for everyone, but that’s one thing they don’t tell you about student loan debt – the mental weight of carrying it around is brutal.
We could finally see a light at the end of the tunnel, and even with doubling our daycare expense with the addition of a second child to our family, we believed we’d be able to complete the loan payoff in two more years.
Thoughts and Takeaways
Ultimately, my loans are on track to be paid off within about 10 years of graduation. In retrospect, the opportunity costs of the debt and interest payments are mind blowing. My 27-year-old self had absolutely no idea what she was getting into when she signed up for those loans. And I was smart and attending one of the top programs in the country.
Whenever I hear people talk about the student loan crisis in our country, I think of the amount of privilege and support I had. Sometimes you just don’t know what you don’t know. And to discount the struggles of those less fortunate because you believe they should have known better does us all a huge disservice. (Note: I don’t mean me. I mean the thousands of students who are told college is their ticket out of poverty and then saddled with high debts, many of whom drop out before achieving a degree. Those challenges can be truly overwhelming.)
Mistakes are Still Growth Opportunities
In retrospect, I chose to get an MBA based on faulty logic. I loved my former career, but it paid very little. And I knew (or thought I knew) that starting a family would be expensive for us. Both adoption and IVF/surrogacy can be huge expenses. I wanted to be a mother more than anything in the world and getting an MBA looked like a practical way to quickly earn the money needed to achieve that goal.
My thinking? The average starting salary post MBA seemed crazy high and at that time your choice of jobs afterward was almost guaranteed when graduating from a top program. I figured I’d continue living my old low-cost lifestyle and pay the loans off in 1-2 years. Not considered? A major recession could make those job choices dry up really quickly, especially for non-traditional students. And I had absolutely no idea what I wanted to do next career wise, other than make enough money to expand our family.
But there are worse choices than to invest in yourself. While student debt payoff hasn’t been as simple a journey as I anticipated, I learned so much from my graduate program. Both about business and about myself and what I am capable of. I’ve since gained experience in roles and industries I didn’t even know existed in my twenties and I know my degree opened some of those doors. Would I do it all again? Absolutely.
I look forward to sharing the end of our student loan debt payoff story shortly.
Interested in learning more? Join me on my journey by signing up for my email list for continued tips, advice and motivation. Or check out one of these articles:
- New Beginnings: Navigating Job Loss and Exploring Entrepreneurship
- 5 Easy Ways to Kickstart Your Journey to Financial Freedom
- How to Pay Off Student Loans Fast: 13 Actionable Tips
What have you learned from tackling student loan debt? Looking back, would you have made the same decisions to take it on?
Amanda | Pinwheels and Piggybanks
Congratulations! I recently paid off my undergrad loans and while that was a great feeling, I’m kicking myself for wasting so much time in doing it. We opted to build our savings instead of paying down debt, which certainly wasn’t a waste. But I feel like we would have been further ahead had we tackled our debt aggressively first and then really started saving. Live and learn, I guess!
Thanks Amanda! It’s so hard not to second guess. I’ve done the same many times; we were also contributing some to retirement accounts while focusing on the loans and I definitely thought things like if we didn’t take this vacation or if we cut back on savings we could reach our debt repayment goals faster. It’s huge that you built your savings and paid off your undergrad loans!
This is so inspiring! We are on a debt reduction journey too. I love hearing success stories!!
Thanks LaTisha! I found reading other’s stories so helpful for keeping up motivation at times when progress felt so slow.
Great journey! I look forward to reading the rest. Student loans are incredibly expensive but it sounds like you have a great plan in motion and are doing well to knock them out!
Hey, first time commenting on the blog here! I love this story; it’s impressive that you paid down all of that debt so quickly. You made an awesome leap in progress after breaking the six-figure threshold. After a big jump like that, it’s interesting to see how the servicers adjust your minimum payments. I noticed they reduce them, but I still think it’s a good idea to pay as much as (if not more) than before.
It’s surprising when you take a step back afterwards. All of a sudden your monthly payments seem much lower. I’ve been paying my loans for about 3 years, and it feels normal. When I think back to before college though, the idea of paying these loans back would have terrified me – if I thought about it at all of course!
Thanks Andrew! I should probably go back and clarify. I never consolidated the grad school loans, so my total monthly minimum payment dropped considerably as I completely paid off some of those loans. I then directed the extra cash flow towards whichever loan I was working on paying off next. But I had some piece of mind in that I could choose to pay less if needed, which I did once I had the added expense of two kids in daycare.
dates and avocados
I love it whenever people get together and share thoughts.
Great blog, stick with it!