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After taking way too long to graduate from college (7 years just for my undergrad!) and racking up quite a bit of debt in the process, I finally paid off my student loans in 2010 – almost 3 years after finishing college.
Looking back, I still find it hard to believe that I was able to pay off my student loans of $36,800 in just 11 months. It certainly wasn’t easy but it was also not as difficult and impossible as I had once thought.
How I Ended Up With My Student Loans
What did slightly complicate my student loan situation was that I had gone to 3 different colleges – a city college, a for-profit/vocational college, and a private university.
I started in a city college, which was both reputable and very affordable. Unfortunately, I ended up getting kicked out of that college after missing and failing way too many classes and semesters. At that time, I thought making $10 an hour was a lot of money and was more focused on my full-time job rather than on school. Talk about wasting money!
It wasn’t until I got kicked out of the city college that I realized there was a cap on how much I could earn since I did not have a college degree and could be earning so much more if I had one. Ironically, none of the colleges, I applied to, would accept me given my track record and transcript from the city college. And so, I applied to a for-profit/vocational college, which unsurprisingly accepted me in a heartbeat. I ended up graduating from that school with an Associate degree.
Even with my Associate degree, I was unable to get back into the city college or any of the other city colleges in New York City and ended up having to apply to state and private universities. I was finally accepted to a private university, where their tuition was 3 to 4 times more expensive than the city college. This is also where I got the bulk of my student loans.
Taking On My Student Loans
When I finally decided to not just pay the minimum monthly payments and actually do something about my student loans, I knew I needed to come up with a plan. By this time, I had paid off roughly $4,600 and still had about $36,800 to go.
Here were the steps I took to pay off my student loans:
1. Got Organized
Since I had student loans from 3 different schools, I needed to make sure I understood what I was dealing with so that I can actually come up with a plan.
It took some time, but I was able to gather all of the paperwork and documentation for all of my student loans.
2. Read the Terms and Conditions
Should have definitely done this when I was taking out those student loans, but I foolishly did not.
Fortunately, none of my student loans had any prepayment penalties. In other words, I was allowed to make extra payments that went towards the principal and reduce the balance of the loan without having to pay any penalty fees.
3. Did the Math
Since I had multiple student loans from each school (one for each school year!), I needed to figure out how much I owed and to who.
To make the numbers easier to track, I rounded my remaining balances for each school to the nearest hundred dollars:
- City College: $1,000
- For-Profit/Vocational College: $7,800
- Private University: $28,000
4. Paid Off the Smallest Loan
Rather than just keep making the minimum payments and paying additional interest towards my city college student loan, I made one lump-sum payment and paid off the remaining balance for that loan in one shot.
5. Continued Making Monthly Payments
I made sure to continue making the monthly payments as per the terms and conditions.
The last thing I wanted to do was incur late payment penalty fees and add on to the amount I needed to pay off.
6. Made Extra Payments (Lots of Them)
At the same time, I started to look for different ways to get more money to put towards my student loans.
For 11 straight months, I did whatever I could to save as much money as I could.
I stopped hanging out with friends, did not dine out, brewed my own coffee at home, said no to several vacation invitations, and started bringing lunch to work among other things just to save money.
Whatever dollar I saved went towards my student loans and I saved quite a bit since nothing is exactly cheap in New York City.
On top of my full-time job, I did whatever I could to earn more money such as picking up odd jobs in and around the neighborhood and from Craigslist.
I had side hustles where I was charging people for things like teaching them how to use Microsoft Office products, helping them with their computer problems, and working with small mom-and-pop businesses with their technical needs.
Any extra dollar I made went towards my student loans.
This was the area that made the biggest difference for me. I was able to make significant payments towards my student loans using the extra money I was able to pull in from these side hustles.
Threw Anything and Everything at It
Any dollar that happened to come my way during those 11 months went towards my student loans – from my income tax refund to my bonus to any birthday or holiday money I received.
Whether it was $5 or $100, whatever money came my way went right back out to pay off my student loans.
No More Student Loans
The moment I wrote out that last check to pay off the remaining balance of my student loan is one that I will remember and cherish for a long time. I am still in disbelief how I was able to pay off my entire student loans in such a short amount of time.
My biggest regret in all of this was definitely not graduating from the city college as it would have put me in a better financial situation. However, I am thankful for the lessons I learned from the experience as it was one of the driving forces that pushed me to learn how to better manage my finances, save more money, and make more money.
Have you paid off your student loans or are you still working on it?