Student Loan Payoff Strategies

Cliff Notes: I paid off my student loans in December 2021. 🥳

Unabridged: I’ll start this out by saying I’m incredibly fortunate this was able to be accomplished in a pandemic. I never questioned my job security and was in the right industry to be able to weather the highs and lows of the uncertainty of the past two years that many did not have.
Now, let’s take it back to 2012. Freshly graduated, and freshly into the Peace Corps. I deferred my loans for 2 years while abroad, which also means I didn’t make any income for 2 years. I also decided to go to an expensive grad school program (my advice- just do a grad program – not THE grad program) right at the tail end of PC in 2014 and that took 2 years to finish doing classes nights and weekends. I also got about $9,000 of a very specific loan type canceled thanks to doing PC.
Post grad school, I ended up with 2 sets of loans across 3 providers and an income based repayment plan. Barely ever paying more than the minimum (and that was mostly thanks tax returns on interest paid to make extra lump sum payments) for 4 years, all while watching the interest keep growing. I knew it had to change but I didn’t have much wiggle room.
In 2018 in typical Nora fashion, I planned both a wedding and strategy to get started on making that loan number shrink to ZERO once the wedding expenses were covered. I prepped and planned and tried ALL the budgeting software (and hardware) out there- whiteboards, Mint, YNAB, Excel, etc. The little golden chariot that ended up being the best thing to tell me EXACTLY how much I could pay to max out my accounts while paying my other bills and still tell me how much I would have in my account on any given day was CalendarBudget. This little unsexy online program that became my best friend. 📊
Whew. So that was figured out, but the income was not, until an interview with my Realtors at the end of 2018. Keller Williams has a little interview process called career visioning. Ok – its not little – its involved, and spans multiple types of interviews and multiple days. Part of that process is a Motivational Interview. In 4 areas of your life – job, financial, and 2 categories you self-establish, what are your goals?
I have NEVER had conversations so frank about money and life ever before during an interview. And if you know me well, you know I am pretty frank. I shared my goal to pay off my loans, among other things. And you know what C+A said? That if that was my goal, it was their goal to help me do it. 😭 And honestly, there were a few tears it was so open. I walked out of that interview day being like – did I just screw myself or have the most refreshing clarity of goals and job expectations ever?
Fast forward to mid 2019. Got the job, in happily wedded bliss, and it was go time. I paid what extra I could, but extra was not enough. When it was time to reapply for income based repayment plans with my loan providers, the monthly payment they determined for me was $650! I called them and told them I couldn’t afford that. I knew I had plans to pay it, but wasn’t sure I could hit that number every month and it scared me. I also knew that number, in addition to my loan totals (thanks, interest) would only keep going up and I could keep saying I was going to pay off my loans and have a plan, but that it wouldn’t happen unless I committed to it wholeheartedly.
In planning our team goals for the next year and the next 5 years, I threw in my own personal goals for myself – to pay off my loans in 2 years. Boy was it going to be a stretch, to be tough, but I was determined.
I started 2020 with just over $60,000 to crush, with a goal to put anything I could squeeze from my accounts into my loans. My bare minimum payment per paycheck was just $100 over the $150 I was required to pay from my adjusted income based repayment plan. If I couldn’t do that, I would have to pay out money from my pitiful savings to cover the difference. And I knew that I needed MUCH more than that to hit my goal.
So here’s what I did every paycheck for 2 years:
• I paid myself first- money to my savings to always have at least a pitiful, but helpful $1,000 in there for emergencies (look away financial planners!).
• I paid into our joint expenses. A set amount of my base paycheck which equated to about 40% of our monthly expenses. My husband gets credit on this one for picking up more on his end so I could commit to my goal. 🙏
• I paid off my CC every 2 weeks. Put all my purchases on it to earn points and gift cards so I could still go shopping. Lol.
• If I did go shopping, I had to love what I was buying so much that I was willing to put at least an equal amount to the cost of the item towards my loans at the same time. Eesssh. This curtailed silly spending ALOT and overall was a very good strategy.
So what was left? Extra income from raises, bonuses, a few commissions, tax returns, a few stimulus checks, and a TON of extra penny pinching.
For 2 years I toed the line of $100 left in my checking account. For 2 years I never really got a raise or a bonus- my loan payments did!
Every payday, Calendar Budget and I had a date. I’d wake up early, excited to see that number go down bit by bit. I’d sit with my coffee, enter everything from the past two weeks, track every penny to see if I could put an extra $20 towards my loans, paying down the biggest percent ones first to stop the interest accrual (lots of different opinions about this one, do what works for you). I’d check my projections, to see if I was still on track or if I needed to keep my personal budget in check. 👩‍💻
There were times I thought I wouldn’t make it- that I might have to adjust and go into mid-2022 with my goal instead. Times I said no to things (I still regret you, dear Maldives vacation), and times I almost hit ‘Purchase’ and sat on it for a few days and said nah, loans are a better use of my money.
That being said, I still got to see friends as much as a pandemic would allow, take a few trips, and treat myself to regular haircuts and massages as a way to reward myself for keeping it up.
If you made it this far, I hope you feel a teensy bit inspired to go crush your own goals – big or small. 💪
Here’s to success – however you define it.
For me, success is finally being able to select the ‘Pay Off Balance’ option when submitting a loan payment. Honestly I laugh-cried at that option years ago – who would ever be able to use that!?

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