Set a Timeline
“A goal without a timeline is simply a dream. Decide on a timeline that you feel comfortable paying off your loans. Remember, the longer you wait, the more expensive it will be in the long run. My goal after graduation was five years. I finished in four. Your life will change from year to year but this goal should be central during that time.”
Pay the Higher Interest Loans First
“My private loan totaled $11,000 at 9.65 percent interest. My federal student loans totaled $36,000 at 6.5 percent interest. I was able to sign up for an income-based repayment plan on my federal loans, which for a part-time bank teller, dropped my required monthly payments to $0. I still made payments on the federal loans, but devoted more toward the other loan. There is so much debate on whether this is the best option for a quick payoff, but it made perfect sense in my situation.”
Be Disciplined
“I compared my journey to other life goals, such as trying to lose weight or learning another language. You’re not going to accomplish anything by contributing 50 percent every now and then. If you want to pay your loans off as quickly as I did, you need to make the changes and give 100 percent every day.”
Refinance!
“In December 2015, my loan balance hovered around $25,000. I found a company online called Lendkey that agreed to refinance my loans. The company partners with local credit unions that agree to fund the loan in exchange for becoming a member of the credit union. My interest rate was lowered from 6.5 percent to 4 percent. Yes it was a variable rate, but in nine months, my interest rate increased to 4.25 percent. However, you do get a discount for setting up monthly automatic payments. Since I was paying off my loans so quickly, I didn’t mind a slight increase in the interest rate.”
Want It, But for a Good Reason
“One day, you will pay off your student loans, I promise. But which day that falls upon depends on you. I wanted this for two specific reasons. The first was to enjoy as much of my life as possible. I can now use that money to enjoy life and indulge in what makes me happy. The other was not having to burden my future spouse with my debt. In 2012, that person didn’t exist. In 2014, she does, and she earned her degree without student debt. I wanted this to be a gift for our future. Having a six-figure income doesn’t matter to us. Student loan independence does.”
Seek Support from Loved Ones
“Nothing in this life that’s worth having comes easy, however no rule says that your journey must be made alone. I sought support from a number of sources. My parents provided an immense amount of support. My girlfriend listened to me every day when I was struggling. My close friends were aware of my mission and congratulated me on every update.”
Reward Yourself!
“Part of my timeline was to reward myself every time I reached a milestone. After I paid off my first loan, I took a vacation to Buenos Aires, Argentina. Every time I reached a $5,000 increment, I would treat myself to dinner or buy some new clothes. My rewards for completing my goal include a seat at the Michigan-Ohio State football game this November and a luxury weekend in Las Vegas.”
To learn more or to talk to Jeff about his journey, email him at jeff@dsp.org.