How I paid off more than $70,000 in student loans in 9 months

I’ve been putting off this post for a while now because the lifestyle I created for myself to pay off my student loans has taken hold. Now that the holidays are around, I have a bit more time for self reflection.

After reading how seniors are getting their social security checks garnished today and almost half of borrowers over the age of 65 are in default on their student loans, I felt compelled to share my student loan debt story.

People over the age of 50 are the fastest-growing group with student debt, even outpacing younger generations, according to a report from the Government Accountability Office. As a result, over the last decade student debt loads for Americans ages 50 to 64 have more than quadrupled, soaring from $43 billion to $183 billion.

My original loan amount was $45,000. I went to a state school close to my day job with tuition costs only at $5,000 per year from 2003–2007.

How did my debts balloon to over $100,000 in payments made? Why did I take out more than what my college education cost? How did I lose my scholarships? Why did I not qualify for assistance even though I should have?

And most importantly, how did I finally get so pissed off that it motivated me to pay off this debt in less than a year after paying $800 a month in student loan payments every month and seeing it not even make so much as a dent in my debts?

How Did I Amass such a Large Student Debt?

This would take too long to describe in great detail. A myriad of circumstances — some my own fault and some not — created the nearly 10-year struggle of paying off my student loan debts.

I’ll list them out to set the stage to describe how I ended up paying over $100,000, with $60,000 of it going toward managing interest.

BTW — PARENTS! Set up a 529 today if you have children. Assuming academia and our markets aren’t drastically changing in the next couple of decades and moving toward the MOOC model, the majority of Americans will not be able to afford to send their children to school.
  1. Losing Scholarships. I had the HOPE scholarship that covered my tuition but I lost it because I dropped part time for one semester. My mother got in a life changing car accident while going through a nasty divorce, and I couldn’t attend my classes. I had to withdrawal because I was unable to dedicate time to those classes during that period.
  2. Tuition isn’t just Tuition and Emergencies Happen. You need more than just covering costs of tuition to go to school. You need to spend astronomical amounts on required text books, supplies, and in my case parking tickets because I was always late coming from work. I also had a car accident after working until 3 AM at my bartending job and then driving to school at 6:30 AM to get to an early class. I fell asleep at the wheel and only had liability insurance. I’m happy I survived an 80 mph rollover off an embankment without injuring anyone else. But I took out a guardrail that cost me almost $10,000 to pay off and I didn’t have health insurance so the hospital bills left me freaking out as to how I’d cover them. I also had to get a beater of a car to get me to and from work and school since they were about 45 minutes a part. I had to rob Peter to pay Paul. Luckily or unluckily the private loans helped cover that.
  3. Private Loans. I had to take out private loans through American Education Services because we didn’t qualify for FAFSA loans (cannot go into detail on this but we most definitely qualified financially for these). These private loans prey on young, desperate college kids. Simply taking out the loan had a 10% origination fee. They charged me 10% on literally taking out the loan that factored into my overall amount. My interest rate was also greater than 10% and variable. Looking back, I cannot believe I signed that piece of paper, but I was naive and didn’t see another way to finish my education. At the time, I didn’t think dropping out was an option because I was afraid I’d never go back and become a statistic.
  4. Working Full Time to Cover Living Expenses. I worked full time but 100% of that money also had to cover rent, food, transportation, and general cost of living expenses. Staying with my parents was not an option and hadn’t been for quite some time. Also, more than 40 hours of physical labor a week paired with a 15–19 hour school load in class time and an additional 10–20 hours a week of studying and completing assignments, left little time for looking for alternative methods of staying in school. This also left me with zero additional income to pay the loans while I was in school thus accruing interest over the course of my education.
  5. Entry Level Jobs in the Career Path I Chose. Starting a career in marketing and sales is not lucrative. It took several years of building my career before I could have a reasonable income. I made more bartending through school than I did in my first five years in my professional career. Looking back, I could have chosen a career path in a STEM field but I’ve always wanted to be in marketing since childhood. I was president of the marketing club in high school and loved my chosen career field that allowed me to combine my creative and analytical sides. I lived in my car, a storage unit and friends’ couches for those first few years committing life to the career path I chose.
  6. Deferral of Loan Payments. I graduated in 2007, the start of a very large recession and housing market crisis. Needless to say, jobs were VERY competitive as many much more qualified Americans were losing jobs left and right. I maxed out my time deferring loan payments. For my private loans, you could only defer three times for a short period of time for the life of the loan. I used up all of my deferrals not saving any for future rainy days because I felt like my life was already a hurricane. When you defer, you still incur interest.

There are many more details contributing to the debt, but these were the big ones that left me graduating with more than $55,000 in school loans off the bat with an undergrad degree in journalism (I hear you laughing)— incurring interest and origination fees before I even got to graduation day. Which I didn’t get a cap and gown because I didn’t attend my own graduation. I didn’t have the money to purchase the outfit, and I chose to work that day instead.

Post Graduation

After using up all my deferrals and savings ($2000) making the cross country move to Colorado for a job, I began getting calls every hour of every day for being late on my payments. That doesn’t mean I wasn’t paying the max of what I could afford, but it was not even enough to cover half of my monthly payments.

My heart sank while trying not to cry in his office and wondered if debt collectors could come after you in prison.

This was before you could block numbers on a phone easily sending people directly to voicemail. I would have the numbers saved in my phone from made up names so I wouldn’t have people at work asking “who is calling you all the time?”

I decided I would try to file for bankruptcy not understanding that the Bush administration inserted a clause into the 2005 bankruptcy reform bill making private student loans nondischargeable unless someone could demonstrate they posed an “undue burden” on their finances — a vague standard which the courts have subsequently interpreted as an incredibly high bar.

I was no stranger to bankruptcy growing up so I thought it would be a viable option for me. It’s laughable looking back at it. The attorney I made an appointment with told me about the new legislation after I had pleaded my case. He told me at one time I could have taken out as much cash advances on credit cards to pay the loans and then default on those, but that wasn’t an option anymore and the likelihood of getting caught could result in jail time.

My heart sank while trying not to cry in his office and wondered if debt collectors could come after you in prison.

It was the most embarrassing time of my life. I was always the overachiever and never wanted to admit my failures. I honestly thought I was the only person going through this, watching my debt continue to climb and getting calls from debt collectors from 5 AM to 9 PM every single day.

I never talked to anyone about it because I saw myself as a despicable human being for not being able to pay my debts.

I thought about joining the military, killing myself, becoming a stripper — you name it, I considered it. Those debt collectors have a way of making you feel like your life will and should end if you don’t get them a payment. My credit was ruined, I lived in constant fear I would lose my job if a debt collector called my office, and I didn’t even want to date because I saw my debt as a big unattractive and deterring factor.

That period post graduation was spent getting current on my interest only payments, changing jobs ‘as often as my underwear’, while living with several roommates & SOs to keep my living costs to a minimum. I spent three times the amount on my student loan payments than I did housing, food, clothes, and insurance combined.

Also during that time, my loans kept growing despite paying greater sums every month until I was no longer in default.

Thought You Said You Paid Off Your Loans in Less than a Year?

Well, I covered interest on interest only for about 8 years. After finally getting current on loans and getting used to the $800 a month payment, I tried to put it out of my mind. I never thought I’d pay off this debt so I never really revisited paperwork. It just became a part of who I was. The payment automatically was deducted so I just got used to living this way. I only paid attention once per year when I got to deduct the interest payments off my taxes.

FYI: you cannot deduct student loan interest once you make $80k per year.

Once I no longer worried about affording toilet paper and getting caught for stealing handfuls of tampons whenever I saw a free stash (I still do this — sorry CorePower), I became comfortable. I didn’t feel as guilty for succumbing to capitalism and buying a purse I liked or a meal out. I should have been putting those payments toward the loan but I also felt like I sacrificed so much early on that I wanted to feel comfort.

I wanted to pretend that the $800 a month loan payment was just a part of life, and I needed to accept it as is. I was comfortable and enjoying the less stressful life. I funneled my energies into my career and building a cycling team. I even went on a vacation for the first time in nearly 15 years.

Then I was going to purchase a condo. I had saved up a modest amount for a downpayment (far from the 20% down but enough). I didn’t even think I’d qualify with that amount of debt but surprisingly I did — hope that’s not indicative of another housing crisis.

In gathering all of my paperwork, I noticed that those years of paying $800 a month, I was still only paying about $30 a year on the premium and still owed $70,000.

WHAT THE ACTUAL FUCK! HOW COULD THAT BE!?

Acting as an ostrich is dangerous. Don’t ever bury your head in the sand when there are institutions designed to profit off of those less economically fortunate. I definitely didn’t pay attention because it was uncomfortable to be aware. It only eases the pain for a short while but compounds the misery and saves it for wreacking havoc later.

I was willfully ignorant. I woke up and became enraged.

The Awakening

I started doing the math. I always avoided doing the math because I was afraid of what I would see. That’s the dumbest thing I’ve ever heard or said and cannot believe I was living in this way. In business, I would analyze the numbers every day to the point where you depend on the data to expose what is hiding. Why did I not apply this to my personal life? I was a damn hypocrite, and I despised hypocrites.

In hindsight, avoiding the truth is rooted in evolution and studied by scientists and psychologists around the globe. I didn’t have the control, the coping mechanisms when I was younger, and the information was just too difficult to make sense of.

But once you choose to see, an irreversible switch comes on and you begin to question everything. I no longer saw myself as a victim but as a fighter — not just for myself but for others.

I didn’t want to pay another cent in interest again to pad the pockets of people like Albert Lord.

Overnight I literally became Raymond of Rain Man doing constant math. I dreamed of numbers. I became obsessed with the numbers.

If I skipped lunch 3x this week and stopped eating breakfast, I could save almost $40. Over the year that would be more than $2000.

If I sold my car, I could pay off my debt 206 days sooner.

If I can start a side business, I can sleep 3 hours less a night and pay off my debts 8 months sooner.

If I quit riding my bicycle for pleasure and only ride to and from work (the one thing that kept me sane and also comfortably numb during my student loan crisis), I could save $1,344 in gas and $700 in race fees for the year and devote that time running the cycling team to building a profitable side hustle.

Finally — the How

Once adequately pissed-the-fuck off, I went in full throttle on paying down the loans in as big of chunks as I could muster.

Here’s just a few of the many things I did to not only make more money but change my lifestyle so I could create a mindshift toward knowing that I could crush the debt instead of accepting the debt in my life indefinitely.

  1. Take off the blinders to feel uncomfortable. Confront your loans. Talk with other people who share the same stories. Look at the numbers. Analyze your interest rates. Calculate your interest rates. Look at how much money you are throwing away in interest and become so disgusted you could puke. Read about others’ plights and share your story. The more you put it out there, the more likely you are to accomplish the goals you set for yourself. Also, once you start there really is a snowball effect. I was content (or used to) paying my $800 a month and living a comfortable lifestyle for once. This is also the definition of indentured servitude. Monthly payments even at $800 were not making a difference in my overall debt. It had to be very large chunks of change so as not to incur interest. I had to figure out how to make large payments to affect principal, not just cover the interest for decades until I’m no longer able to work. I’m still angry I didn’t pull my head out of the sand sooner.
  2. Started a side business. After years of dedicating my life to my career, I realized that I had something of value to offer. An opportunity presented itself to be able to start a side business. The one thing that I’ve always had was the ability to make money. I only went to school half a day in high school, had three jobs and a hardship license. I was no stranger to knowing how to work hard. I partnered with a former co-worker and we built a business literally in a day while still working my 50 hour+ a week day job. A lot of it was figuring things out on the fly but now it’s something viable and helps not just myself, but my partner and our clients. It also keeps me fresh and helps all aspects of my career. Since October of 2015, I have worked every single day. My first day completely off where I did not look at a computer was Thanksgiving Day this year, November 24, 2016. I’m not saying that is healthy but I became so determined, I could not not work. Not while someone else was profiting off my and others’ interest payments.
  3. Slept less to work more. I love love love sleep. I didn’t get a lot of it in high school and college and took advantage of making up for lost time early on when starting my career. When I slept, that eased the pain of being awake knowing I owed six figures in student loans. I could sleep 10 hours a night no problem. I’ve read some of the greatest minds could only sleep 4 hours a night and when you are awake those extra 4 hours while others sleep, you can do a lot more work making your dreams a reality in those hours while others literally just dream. I began going to bed later and waking up earlier. I would pick one day a week that I got to sleep in but otherwise, I was working every waking hour or trying to sustain myself to work longer and harder. Once you deny your body of sleep long enough, you really do get used to it. After having done a couple of 24 hour bike races, you realize just how little sleep your body actually needs to perform. Plus, this was only temporary. With an end goal in mind, I knew I would catch up on sleep later in life. Medical students in residency do it. Single moms and dads do it. Immigrants do it. Why couldn’t I? So I did.
  4. Ate less to save more. Because I stopped working out to numb the pain and to focus more on making money, I also didn’t have to eat as much. I started skipping breakfast and eating at work if they offered food. This was not starvation. Americans eat way too much as it is. This was simply changing a habit that has several benefits beyond saving money. Plus, there is truth to the saying ‘eat like a peasant, feel like a king.’ Not eating breakfast, eating a modest lunch and cooking at home three days a week or drinking a liquid dinner (our cycling team got free juices and they are pretty calorically dense so I drank these often for dinner or lunch) not only helped me keep weight off while not exercising as much, it helped me save a considerable amount of dough. My relationship with food became one of luxury instead of necessity.
  5. Gave up things I really cared about. A part of my identity is bicycles. My moniker is literally @missbikesalot. My life revolved around my career and my bicycle. And one of those things wasn’t making me a lot of money and was more a cost center. But bicycles also serve a utilitarian purpose and could actually save a lot of money — but not the way I was using it. So I stopped funneling my time into the cycling team that I co-founded and poured my heart and soul into for 5+ years. It was a hard decision but I knew that what we built could go on without me too by design. I’m still a part of it, but do not manage anything with the team or contribute to its growth in any way today. That was hard. It still is hard. I also stopped being obsessed with trying to be fast and fit. I live in Boulder, Colorado where everyone is pro or an aspiring pro. I am married to a pro. His sister is a pro. Today, I am slow (I never really was that fast anyway). I ride for fun, for transportation purposes and to look good naked. The bike has led me to many of my opportunities I have today and am thankful for it, including my husband, my job and some of my best friends. It will always be a part of my life but no longer my identity. Refocusing the time spent on the cycling team, I instead put that toward work for profit. Instead of training, I shifted to commuting to save money, helping me pay off debt more quickly. I didn’t give up the bike completely, I just shifted my priorities and how I got my exercise. Being out of debt eclipsed being ‘fast.’
  6. Changed jobs and asked for raises more frequently. You don’t get what you don’t ask for. I learned this pretty early on. Last year, I changed jobs 3 times with the intention of getting a raise. I loved my place of business that I worked for and am forever indebted (in a different way) for the chance they took on me during my industry change, but also was presented with an opportunity to make more money. I could not turn that down because getting debt free became my priority. Luckily, I didn’t burn a bridge and was able to come back later. I also learned that I needed to get out of nonprofit and the outdoor industry. Those were great careers while building my brand and experience but not lucrative in the long run. I had to find a booming industry to continue the trajectory to make more money where I also didn’t have to sell my soul. I could always go back once debt free if I felt the calling.
  7. Skipped the wedding and the honeymoon. I was lucky enough to find a supportive partner who works as hard as I do and values that. When we decided to get married, we initially started planning a wedding. Since we both would be paying for it, after I looked at the first expense for a tent or event rental, we both immediately said F that. The amount we would have spent on a wedding would have been enough for a significant portion of the loan. We decided to forgo the wedding and honeymoon. Neither of us really celebrate holidays or have staunch traditions we adhere to. Plus the time spent planning a wedding would distract from paying off the loans. We didn’t need some expensive ceremony to make our marriage legit. We went on a lunch break to the county clerk, got married in under 20 minutes, and then we both went back to work having only spent $25. We didn’t even tell anyone until over a month later.
  8. Sold or traded for cash my high dollar belongings. My car with my bike inside and several precious belongings were stolen this year, and I plan to write an elaborate blog post on that ordeal once the settlement is over. I was going to use the insurance check to put toward my loans and do without a car. But when my car was found minutes before I was to receive a check (funny how that works), I didn’t want to even set foot in it. After getting the repairs done — out of pocket — we listed it immediately. BTW — it is really hard to sell a car that has been stolen. Once we had it listed for about a month, we decided to trade it in on a lease and get a check cut back for the value of the car since I owned it outright. That was a big chunk of change that helped significantly. One would ask, why are you swapping debt for more debt but when you can lease or buy a car with less than 3% interest and you have an education loan that you can never file bankruptcy on at a variable interest rate that can range from 4% to greater than 10%, it is a no brainer. And if you’re a business owner, you can deduct mileage or car expenses depending on the vehicle weight. My three year lease will be paid for in full by mid 2017 as I am doubling payments on it since it’s less than what I was paying monthly for my loans. Also, my mother and grandfather had a Casita travel trailer that they never used. She gifted that to me and though I feel terrible about it, we sold it pretty quickly after. Between our hectic work schedules, we didn’t have time to use it anyway. Those two big sales helped considerably. Though that Casita was really rad.
  9. Stopped hanging out with friends. This was hard. I consider my friends my family. But my time was limited with work and my pocketbook was tight given my new focus. Not to mention I had a husband that I barely got to see as he spends the majority of time in a city 1.5 hours away for his job. I also didn’t want to spend money or be tempted to spend money on going out. I knew this was temporary and good friends will understand. They are always there for you when you can resurface and encourage you during the difficult times. If a friend ever makes you feel guilty for not hanging out with them, they probably aren’t a good friend to begin with.
  10. Lived like I was that broke high school and college kid again. For some reason, I felt a sense of pride with the life I had built. It revolved around being financially sustainable and being able to afford life’s little luxuries meanwhile having this gorilla of debt on my back. It was a manageable payment that was enough to keep me out of defaulting and covering interest but not enough to make a significant dent in my total debt over the life of the loan. That’s how they getchya. I’m not saying that you should live in fear and not enjoy what life has given you or what you rightfully earned, but it can all go away in an instant. Buying yourself something can bring joy but not prolonged happiness. Instead if I were to make a purchase, I evaluated it on how long that item would bring me happiness, contribute to my life, and how much time I am going to have to spend maintaining said item. I prefer to spend my discretionary income on things that provide an experience because that is what resonates with me. Once I got over my pride — which I think was a product of not having money growing up; being made fun of for my grandmother making my clothes; my mom, brother and I living with her and my grandfather throughout my youth; memories of helping my mother search through couch cushions to scrounge up change for food and paying with food stamps; watching her in unhappy marriages to try to support us kids — I started to take pride in having just enough money to make it look like I had money. That is dangerous and embarrassing when I look back on it.
  11. Talk to a financial advisor or read about finances as much as you can. I began talking to people who were more successful or made their careers out of handling other peoples’ money. I learned more about money and money saving/making techniques in the last year than I had in the past 30 years. The more you talk about your situation and put your pride to the side, the more facts you will have about how to use your money wisely. Don’t do it as complaining or venting (though it feels good) but to gain inspiration, knowledge or confidence in what you’re doing is the right thing. I didn’t have anyone teach me about money growing up except that we never had enough of it and Chapter 7 wasn’t referencing a book. I remember reading how to do my taxes at 15 at the library with a paper form and how to apply for college scholarships and loans on my own. I never visited a campus with a parent nor did I learn what a 401k was until I worked at a company that contributed to one. If you have kids, talk about money in beneficial ways NOW. If the thought of learning about money stresses you out, think about how less stressed you are when you go into a situation armed with knowledge. Everything new has a learning curve and induces a form of stress. Embrace it and continue to put yourself in those situations until it no longer induces a stress and move on. This is how you move from a fixed mindset to a growth mindset.

Debt Gone in 9 Months

I originally budgeted the entire year of 2016 to get out of my student loan debt. I did it in just under 9 months. It would have been sooner but because I didn’t click ‘pay off’ on my loan with AES, I incurred $7 in interest since they don’t apply your payments immediately and instead 3 days later, thus paying interest on interest again for my last payment. Ironic. It’s as if they knew I was on a mission to be done with them (they also raised my interest rates 3x in that period after not having touched them for almost 1.5 years).

For those still paying on student loan debt, find a side hustle.

I know teachers who also mechanical turk in spare time.

I know executive assistants who make and sell jewelry on the side.

I know tons of people who teach yoga for some extra cash (it is Boulder) and to get a free membership.

Making side money has never been easier — join Uber, Favor, Drizly, or TaskRabbit before automation takes those jobs, too. Sacrifice time you have today to get your life back tomorrow because you will age out of the workforce. There is no magic pill that will magically wash your debt away and there is certainly not going to be any legislation any time soon to make it easier to rid yourself of student loans, especially if you have private ones like I did. Become so enraged with your debt and those profiting off it you’re able to turn what feels like monumental sacrifices into minuscule abnegations today.

Share your story with others and publicly express your goals. Knowledge is motivation. Fear is unconsciousness. Your reward will be freedom.

I am beyond grateful for having a supportive husband, family and friends to tolerate my manic episodes induced by stress during this time and taking on my challenges as if their own. I realize just how privileged I am to even have an opportunity to get an education as a woman, much less a college education, buy a home, a car, a cat that watches tv, a tv, and other comforts of this American life.

I didn’t struggle more than others around the world and not more than many in my own backyard. I didn’t do this 100% on my own and have had very kind people help in different ways along the way (you know who you are). The sacrifices I speak of are 100% white, Western, first-world privilege sacrifices and I’m acutely aware of that.

But one thing is certain — I’m never losing this mindset that I’ve now gained on my relationship with debt and money; though, I am now having to ‘work’ to undo some of the ways in which I dedicated my life to make the student loans go away and have a healthier relationship with debt.

But life is always a work in progress, no?

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