Paying off my student loans

by Erika Torres

After paying off our car loan and only $700 away from being credit card debt free, my next plan is to tackle my student loans. For some reason, paying off my student loans doesn’t give me that same “Yay I’m paying off debt!” feeling.

On March 9th, we will be completely debt-free except for student loans. We’ve come a long way in our journey to be debt free, and have paid off approximately $15,000 in credit card debt and car loans in the past two years.

But the student loans loom.

With $20,000 left to go, it’s no laughing matter. According to the student loan calculator, it could take up to 16 years to pay off my loans if I continue with just the minimum monthly payments. Sixteen years?!

I have three options to pay off my student loans:

1)   I could go on my merry way and continue to pay the minimum balance every month, pay thousands in interest and not pay them off for another 16 years.

2)   I could go hardcore and pay off my debt within the next two years, putting every penny I have toward debt, forgoing all discretionary spending to lower my debt, and essentially eliminate any social life for the sake of being debt free.

3)   I could find a balance and transfer all the money I’ve been putting toward other debt and now designate it toward paying off my student loans within the next three to four years. This would allow us to almost triple the minimum monthly payment but also allow us to have a life as well and still splurge every now and then and enjoy the years we have to ourselves before we have children and they suck us dry of any fun money.

Hmm—the options are difficult, right?

It’s really hard to get the motivation to pay off student loans because it just feels like eternity. However, I don’t regret my education, which truly opened a lot of doors for this young Latina from the ghettos of Orange County—yes, even white-bred filthy-rich Orange County has ghettos.

When it comes to paying off student loans, you need a plan. And I think we’ve found our plan. We will become much more aggressive in paying off my loans, but we still plan on living our lives. Yes, sacrifices will be made, but it won’t be as bad as say…living in a shack for 1.3 years.

I can also see us needing to buy a car within the next few years, since who knows how much life is left in Eric’s car.

The whole point is paying off debt is a journey. It’s not something that happens overnight, unless you have a filthy rich relative who dies and leaves you an inheritance that makes Warren Buffett jealous. Paying off debt takes time.

I’m willing to make sacrifices to pay off my debts much faster (three to four years as opposed to 16 years), but I’m also not willing to give up things that are important to us, such as traveling, saving for a down payment on a home, and living in a place bigger than a shack.

You need a plan when it comes to paying off debt and student loans. This is our plan.

And considering we’ve paid off $15,000 in debt the past two years, which included living on one income for 5 months AND paying for Eric’s fire academy –heck, I think our plan is going pretty well.

Do you have student loans? How are you working to pay them off?

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Remy @MLISunderstanding March 12, 2012 - 12:03 pm

Good breakdown of the choices. I’ve also chosen option #3 — a balance between careless spending and not having ANY play money at all.

I took out (federal) student loans for grad school, but have kept saving toward the expense because I am working full-time while attending school. (That kept the amount of the loan down and lets me save while the debt is still interest-free.) I’m working toward being able to pay off the whole loan amount before interest kicks in 6 months after graduation.

Zack Jones March 12, 2012 - 9:17 am

We have two debts (other than mortgage) a 0% APR credit card that we consolidated some small cards under and just under $8,000 in student loan. Right now we’re knocking off the credit card even though it has 0% APR. That offer expires in October and we will not miss that deadline. We are currently on track to have the credit card paid off in June and then we’ll roll the money we were paying on it onto the student loan. We are fortunate that we will be able pay around $1500 per month on the student loan and will have both debts paid off this year.

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Jana @ Daily Money Shot March 2, 2012 - 6:45 am

I don’t have student loans but my husband does. Our plan to get rid of them is to use his part-time job income to pay them off over the next 3 years. We have a daughter who’s entering kindergarten in the fall and we want his loans paid off before she starts college.

John | Married (with Debt) February 29, 2012 - 10:13 am

We have $10,000 left on our student loans, then will be debt free (except for house). That will take about 6 more months.

I know how you feel about the way student loans feel. It’s hard to get so angry about them if you have a job. Credit cards are easy to get mad at.

I say chug along – there’s a lot of pressure to relax a bit, but I think the debt free feeling will be worth the wait.

Dave Hilton February 29, 2012 - 4:37 am

Paying off the cards & car is a great accomplishment!

We’re taking our time paying off our student loans. I know, if we put ALL our extra money towards them, the debt would be paid faster…but we’d eventually rebel against the plan not being able to do anything but sit at home all day, every day (except for going to work/school). That’s a miserable existence. We did that for FIVE YEARS during our bankruptcy.

If we were drowning in debt again, I would see the value of doing whatever it takes to escape. But, right now, we have a balanced life…and we like it that way.

Have FUN!

Teacher Girl February 29, 2012 - 3:05 am

I think your plan is great! I am actually going to be meeting with a financial advisor soon because doing it on my own has really not been working out at all. Time to make changes. Like you said, we all need a plan.

Jessica @ Budget for Health February 28, 2012 - 5:55 pm

Yay for being debt free! That’s awesome you’re so close to knocking out that credit card debt. We were planning on having our student loans paid off by May, but with my new job and extra cash from our tax refund, we’ll be COMPLETELY DEBT FREE by March (possibly this Friday!!!!) woo woo!

Six Figure Investor February 28, 2012 - 3:08 pm

Congrats on the credit card debt.

My girlfriend has student loan debt but it’s a small amount that was consolidated at 2% a few years ago. The interest is tax deductible, so she isn’t in any rush to pay it off.

Lisa February 28, 2012 - 11:49 am

Congrats on doing so well with your debt and having a plan!

I graduated college almost 7 years ago and had a MASSIVE amount of student loan debt: somewhere around $90,000 (yeah, it’s crazy). For the first year and a half after I graduated, I lived at home and didn’t have to pay rent, so I was able to throw almost all of my income directly onto my loans. After that, I got my own place and depending on how well I was doing from month to month, I’d either pay the minimum, or a ton extra. Everytime I came into extra money (tax return, bonus at work, etc.) it went directly on the loans. Now I’m down to the last $17,000 and I have a plan to get rid of it entirely by the end of the year, assuming no huge unexpected expenses come up.

When I look back on how much I started with, I really can’t imagine a life without gigantic debt, but I’m really happy that I’m almost done with it!

Young Professional Finances February 28, 2012 - 11:41 am

Congrats on getting rid of all non-student loan debt! That’s a huge step.

I have about 40K in student loan debt but I’m not rushing to pay it off. I’d rather save money now and pay it off later – my interest rates aren’t too bad so it’s ok.

Marissa @ Thirty Six Months February 28, 2012 - 11:26 am

I would go with option 3. I think finding the right balance is key.

CeCe @Frugalista Married February 28, 2012 - 8:26 am

My sister’s plan for paying of her student loans is to die first. I’m not kidding!!! Yeah, student loan debt can be super overwhelming which is partly why I won’t even think about going to grad school. I paid mine off in the fully allotted 10 year period.

SWR February 28, 2012 - 7:26 am

UGH. My student loans will be well over six figures by the time that I finish school. By that point, we hope to have our other debt cleared (car, cc, and my partner’s student loans).

Right now we are thinking that we will ignore my salary for my first full year of work, and put it all on student loans. After that, we’ll probably take a more balanced approach. I figure that if we keep up our student lifestyle for one extra year we’ll really get a jump on paying them down.

Micah February 28, 2012 - 6:50 am

I have about $8K in student loans remaining (I went to a small private university). This is pretty much my only debt since I have gotten better at keeping up with my credit cards (I only have two) in the last year. I don’t count my home mortgage as debt. I’m not too worried about the student loans because when I graduated, interest rates were super low, so it’s really an easy payment each month. That said, I will probably throw a big party when I make that final payment. Whenever that is … 🙂

Daisy February 28, 2012 - 6:49 am

For some reason, I don’t get that feeling with student loans either. Maybe it’s because mine are such a low interest that don’t accrue until I’m out of school and have a job.

Hank February 28, 2012 - 6:05 am

Keep going! Pay off the student loan as fast as you can and never look back.

Laura @ No More Spending February 28, 2012 - 5:56 am

You’re doing great so far – Like Jackie I would do a mixture of 2 and 3. Good luck!

Jackie February 28, 2012 - 5:53 am

We go back and forth about this all the time. To pay them off with our savings, or build our savings? I’m sure there is a happy medium. Our friends used all of their money to pay off debt, then her husband lost his job and they had no cushion. My husband’s school of thought is that he would rather pay over the 10 years and have a more comfortable life along the way. Way to go for you though, for tackling this!!

Megg February 27, 2012 - 8:51 pm

Ugh, I don’t even want to think about how long it will take us to pay off student loans! We’re currently working on the last of our CC debt and plugging away on the student loans as they come. I suggest trying to make at least a double payment every month (but sometimes you have to tell them to put it to principal so check on that) and saving for other things like a new car 🙂

Michelle February 27, 2012 - 8:50 pm

We plan on paying our student loan debt fast. I’d rather them be gone.

Dani February 27, 2012 - 7:54 pm

I am so with you on the student loans! I made a big mistake when I graduated college… I ran away from my student debt. Now it’s finally caught up with me. First I worked hard to get them in good standing, and now I’ve found a program that will help consolidate so I have a lower monthly payment. Even with the lower set payment though, I am going to try to at least double the payments monthly. But I know what you mean about not wanting to give up some little things… I fought myself all afternoon about buying a pair of pants that were only $15 today! In the end, I decided to get them, because I haven’t bought myself any clothes in about 3 months!

Great post! Love your blog!

Jackie February 27, 2012 - 7:35 pm

You’re so right that you need a plan 🙂

I did have a student loan, and I got rid of it by chucking every extra penny at it that I could find. But, that wasn’t really a sacrifice, since I’d just come off 4 years of unemployment at the time.

If it were me now, I would do a mix of option 3 & option 2. (Which is pretty much what we’re doing with our mortgage.)

Hannah February 27, 2012 - 7:33 pm

We only have student loans left and we’ve had to go to the minimum while the husband has been underemployed. We are trying to pay them off as soon as possible so we’ll be going back to doubling (maybe tripling?!) our minimums. Our goal is to be at zero debt because we both just hate this feeling of owing money. (plus, our interest rate on subsidized student loans are at 6% – ugh.)

I do hope that you two are planning on a little celebration when you’re at 0 credit card debt!

SB @ One Cent At A Time February 27, 2012 - 7:11 pm

I would suggest not to put off your retirement saving and building up of emergency fund for paying off loan. You are doing good, blog income should increase further. I guess in a year or two you can pay off student loan.

Amanda February 27, 2012 - 6:58 pm

I’m with you. I’m not even tallying my student loans into my bottom line at this point. When the credit cards & car loan is paid off, we will certainly double (maybe triple) the minimum payment on my grad school loans. For now, I just look at it as an investment in my future and try not to think about the numbers!
Good Luck!

Leah @ The Miracle Journal February 27, 2012 - 5:41 pm

I’m so impressed by all that you’ve already done and the fact that you have held steady to a clear plan, even when times were tough. I agree with you – I’m willing to make sacrifices, but I’m no longer willing to sacrifice EVERYTHING in order to pay off debt. Because then I would become miserly and miserable, and I don’t think it’s any more okay to be miserable and debt free than it is to be living the high life and digging a financial hole. There has to be balance or it doesn’t work.

And besides, what you’re proposing is basically the snowball method, isn’t it? You roll the payments you had been making into the rest of the debt and it goes faster. So it’s just the next step in your plan! 🙂

Jai Catalano February 27, 2012 - 5:37 pm

Congrats on the 15k. I think I need to take you guys out for a job well done.



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