How I Paid Off $68,000 in Student Loans in Less Than 5 Years

Originally published Jan. 12, 2016

After making the very last payment on my student loans, I was hit with a flood of emotions — relief, joy and disbelief. It had been a long haul.

My journey into student loan debt started innocently enough at age 17 when I headed to college. Loans were my only option to pay for school, so I signed up without flinching, not truly knowing what I was getting into.

I graduated with my bachelor’s degree — and $23,000 in education debt. Then I took on an additional $58,000 to attend my dream graduate school. There was $68,000 left to repay before I really got serious about becoming debt-free.

If you have a similar number hanging over your head, here’s how to pay off your student loans in five years or less.

How to pay off student loans in 5 years

In December 2015, I made my very last payment. Here’s how I did it.

Moving to a cheaper location
Starting a side hustle… or three
Live like a college student
Earning a better income

Moving to a cheaper location

I went to graduate school in New York City and absolutely loved it. But when I graduated, I couldn’t find consistent work. After six months of giving it my all, I realized I couldn’t afford my rent in the city and make sufficient payments on my student loans.

I could have opted for an income-driven plan, but I considered it a last resort since I knew interest would keep accruing. At the time, my loans were already generating $11 in interest per day — and it made me sick. I had begun to realize that New York City is one of the worst places to repay debt.

So I ended up moving to Portland, Ore., to reunite with my partner (after having done long distance for nearly two years, which also isn’t cheap) and lower my rent. In fact, I cut my rent in half.

Starting a side hustle… or three

Portland proved to be more affordable in a lot of ways, but it wasn’t great for my employment situation. I continued to struggle, making $10 to $12 per hour for a year and a half.

I could pay my bills, but was dipping into my savings to continue to put more towards my debt. I knew I didn’t want to completely wipe out my savings, so I began to side hustle every chance I got.

Over the past four and a half years, I have:

Sold water at a rave
Participated in a medical study
Served as a coat-checker for a party
Worked as a brand ambassador (which increased my income by $5,000 per year with a few gigs per month)
Was a house cleaner, pet sitter and registration assistant for a race

Since I didn’t have full-time work, I made it my job to find work. Weekends and holidays were especially lucrative, and Craigslist and TaskRabbit were my best friends.

I would venture to say that I’ve worked the majority of weekends and holidays for the past four years. At certain points, I was so tired and sick of working, but the dream of being free of my debt kept me going.

I knew I didn’t want to spend one more day than I had to with the burden of student loans. To me, student loans felt like a ball and chain, holding me back from everything I wanted to accomplish.

Although it seemed never-ending at the time, I can now say that working so hard was worth it. It wasn’t always glamorous and it wasn’t always fun, but it helped me pay off student loans faster.

Live like a college student

I’m 31 years old; many people my age are “settling down” with houses, new cars and little ones on the way. There’s absolutely nothing wrong with that, and it seems like a natural progression in life. However, I knew if I wanted to make debt repayment my priority, I had to continue to live like a college student.

I focused on the big three expenses first: housing, food and transportation:

My partner and I live in a small studio apartment together (it’s romantic!).
I don’t have a car and mostly bike or walk everywhere.
I limit my food expenses by buying fewer packaged foods and cooking instead.

In addition to the big three expenses, I also said no to having pets, cable, clothes, makeup, a gym membership and most other luxuries.

That’s not to say I had no fun — I still budgeted for some travel and restaurant outings, as I believe it’s important to have some fun and rewards while paying off debt, or else debt fatigue will set in.

Earning a better income

Now, this is not a standard tactic I would recommend for most people. But quitting my job and starting my own business was one of the best financial decisions I made.

After a year and a half in Portland, I eventually found a full-time job paying $31,000. I was ecstatic about a nearly-$10,000 raise over the year before, plus benefits. At the same time, my side hustles became more specialized. I started freelance writing on the side, managing social media accounts and more.

Though there was a huge learning curve for managing my own business, I started to see that it could potentially be more lucrative than my full-time job at a nonprofit. And having been a longtime nonprofit employee, I knew the probability of me making much more was small.

So after I built up my client base and was making at least what I made at my day job, I quit my job and went out on my own. It felt like a huge risk at the time, quitting my steady job when I had so much debt.

But a funny thing happened when I quit my job: My mindset shifted, and I was determined to make it work. I would not fail and I would make sure that I was consistently making more than I had at my day job so I could pay off student loans.

It didn’t happen immediately, but after six months of trial and error, I started making more money than I ever had. After a year, I more than doubled my income.

I had always put roughly 50% of my income towards debt. When you’re making $31,000 before taxes, that’s not a lot. After quitting my job and doubling my income, I was able to put $30,000 toward debt this year alone.

Many people in personal finance extol the virtues of cutting your expenses. I think that’s one important part of personal finance, but there’s only so much you can cut back on. You’ll always have some expenses. I found that earning more — even if it required more “work” — was far more fruitful for my debt payoff efforts and helped land me a new career.

Now that I’m debt-free, I plan on replenishing my savings, some of which I used to help make the last payment and get laser-focused on investing. I also plan to enjoy more travel.

Yes, paying off $60,000-plus of student loans is possible

I’m proud to say that paying off $60,000 in student loans is no easy feat. I’ve been through it. And now that I’m on the other side, I can honestly say it’s all worth it.

To get there yourself, you might try similar tactics:

Cutting living expenses: Moving to Portland and living like a college student worked for me. For you, you might consider the drastic step of moving back in with your parents or, perhaps less painfully, finding a roommate.
Increasing income: Carving out time for side hustles and even changing careers helped my situation. If you like your full-time job, on the other hand, you might work toward a promotion and raise instead.

Pulling those two levers — expenses and income — should be the most impactful during your debt repayment. After all, more cash coming in and less going out means that you can increase your monthly payments, whittling down your debt at a more rapid clip.

If you’ve read other debt payoff success stories, you know that adopting a repayment method, asking for support and considering student loan refinancing are also common cures.

Just remember that you won’t get there overnight. Start by setting your goal and adjusting your lifestyle to match it. It took me less than five years — how long will it take you?

Andrew Pentis contributed to this article.

Interested in refinancing student loans?
Here are the top 8 lenders of 2020!

LenderVariable APREligible Degrees 
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1 Important Disclosures for Earnest.
Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 2.89% APR (with Auto Pay) to 5.88% APR (with Auto Pay). Variable rate loan rates range from 1.89% APR (with Auto Pay) to 5.88% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 6, 2020, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 3/06/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for SoFi.
SoFi Disclosures
Student loan Refinance: Fixed rates from 3.20% APR to 5.98% APR (with AutoPay). Variable rates from 2.31% APR to 5.98% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 1.62% plus 0.94% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

3 Important Disclosures for Laurel Road.
Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

ANNUAL PERCENTAGE RATE (“APR”)
This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

FEE INFORMATION

There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.

LOAN AMOUNT

For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for more information about refinancing ParentPlus loans.

ELIGIBILITY & ELIGIBLE LOANS

Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.

INTEREST RATES

The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.

DISBURSEMENT OPTIONS

The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.

POSTPONING OR REDUCING PAYMENTS

After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of March 4, 2020 and is subject to change.

4 Important Disclosures for Splash Financial.
Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.

5 Important Disclosures for College Ave.
College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 1/1/2020. Variable interest rates may increase after consummation.

6 Important Disclosures for CommonBond.
CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.67% effective February 10, 2020.

7 Important Disclosures for LendKey.
LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 12/019/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

1.89% – 5.88%1 Undergrad & Graduate

Visit Earnest

2.31% – 5.98%2 Undergrad & Graduate

Visit SoFi

1.99% – 6.65%3 Undergrad & Graduate

Visit Laurel Road

1.99% – 7.06%4 Undergrad & Graduate

Visit Splash

2.62% – 6.12%5 Undergrad & Graduate

Visit College Ave

1.76% – 5.84%6 Undergrad & Graduate

Visit CommonBond

1.90% – 8.59%7 Undergrad & Graduate

Visit Lendkey

2.39% – 6.01% Undergrad & Graduate

Visit Elfi

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

The post How I Paid Off $68,000 in Student Loans in Less Than 5 Years appeared first on Student Loan Hero.

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