How One Savvy College Grad Cut Expenses to Pay Off Her Student Loans
Millions of Americans help pay for the cost of college with student loans. If you’re one of them, you might be thinking about options to help you successfully manage repayment and payoff your loans. The vast majority of borrowers successfully repay their loans, and you can, too.
First, it’s important to focus on repayment as soon as possible. Don’t feel discouraged or get sidetracked. Borrowers who don’t put off making payments are more likely to be successful. Even if you can only make the minimum payment, every little bit will get you one step closer.
If you need help, contact your loan servicer. At Navient, we work closely with borrowers to help them explore repayment options, including options that base payments on their income.
They include customers like Bria. After falling behind on her payments, she shares how she got back on track. Bria offers some great tips and advice to help anyone who might be paying off some sort of debt. While everyone’s situation is different, I think all of us can take something away here:
“I stopped ignoring my student debt. I think a lot of us are so overwhelmed by it that we don’t even want to look at it, hoping it will just go away. You have to face the music before it really becomes a burden in your life. So I collected all my documents and synced my loans to a budget app so I could see them all in one place every day as a reminder of what I had left to pay. It was a great feeling to see them decline over time.
Second, I seriously hacked my lifestyle. I moved across the country to give up my rent so I could live with my Grandma to save money. I did that for 13 months which was really hard, but by the end of it, I’d paid off a significant chunk of my loans, bought a car and managed to build up my savings, too. If you can, get into a situation where you don’t have to pay rent or you pay less.
Next, I made it a habit to get rid of certain behaviors to cut costs. For example, I packed my lunch first thing when I got home from work so it would be ready for the next day and I wouldn’t be tempted to purchase lunch at work. All other meals I prepared for myself, allowing for the occasional dinner date with friends. Also, I didn’t participate in wasteful spending like shopping, getting my nails or hair done, going out often, etc. As for going out, I allowed myself one night a week to go salsa dancing. If I went each week, it would cost $160 per month, so I worked this into my budget. This was my main luxury. It was important for me to still enjoy my life while paying down this debt so this was my little treat to look forward to each week.
Next, I applied for every promotion I could get and over the next two years I doubled my income, my savings, and my loan payments. Then, I paid off two smaller student loans so that mentally, the feeling of accomplishment would inspire me to work towards that next ‘Paid in Full’ letter. Then, I paid off the loans with the highest interest rate first and finished up the remaining federal loans.
My strategy was to trick myself into living off of half of my income and putting the other half of it to savings and loans. Living beneath your means is an important skill to learn for the rest of your life.”
For more customer stories and personal advice, visit our customer tips page.
Nick LaMastra is a media analyst for Navient, a student loan servicer helping more than 12 million customers successfully repay their student loans.