I Paid off $50,000 of Student Loan Debt in 4 Years

And I was still able to keep living my life

Photo: Gabby K/Pexels

I graduated in 2015 with $50,000 of student loan debt hanging over my head. My loans were divided amongst student loan programs through the government and a line of credit that was near to $10,000 that I had through the bank.

At times, the debt felt crushing. It was more money than I had ever seen in my life, and it seemed unbelievable to think that I would ever be able to pay it all back. I resisted the simultaneous urges to throw every penny I had at my loan, along with the much stronger desire to ignore it entirely and stick my head permanently in the sand.

I’m so happy to say that after four years of staying diligent, I was able to pay off both loans in the full amount. Now, I certainly don’t think that I have all the answers. There were times that I strayed from the path; however, I found ways to get back on track when I did. Detailed below are some of the strategies that I used that helped me pay down my debts.

Secure an income

This is the most crucial step. I am extremely grateful that I was able to attend university for a professional degree, graduate, and enter the workforce with a job offer as soon as I graduated. This is something that was an immense privilege and had the most significant impact on my debt repayment.

During my time in school I was fortunate to be part of a work-placement, which allowed me to make connections and ultimately be hired into a job at the same place after I graduated.

I started working near full-time hours that initially earned me $32/hour, which was life-changing compared to my previous $0/hour that I was making as a full-time student.

I would recommend the best thing to do when you are in school is seek out opportunities in the field that you are interested in. Maybe you don’t have work placements as part of your studies, but sign up to volunteer, apply for an internship, network, or even offer to shadow someone working in your area of study or in a field that you are interested in learning more about. By taking initiative you are not only gaining skills and experience, but you are also getting in your foot in the door which could lead to employment down the line.

Work a part-time job while in school

If I can offer a recommendation, it would be to work a part-time job during school. It’s something that I didn’t do, and I regret it. I know classmates who were able to juggle both full-time school and part-time work, which helped control their debt levels. However, it often came at the expense of something else:

  • Losing time for social engagements.
  • Losing sleep.
  • Not being able to dedicate as much time to family or studies.

On reflection, I think this balance would have been worth the struggle because had I had a part-time job, I would have avoided racking up so much debt.

Continue to live like a student after you graduate

During school, I had been living in an apartment on campus with one, occasionally two other students. When I graduated, I had to find new accommodation since I was no longer a student of the university and didn’t qualify for on-campus housing (understandably).

I settled on renting a room in the basement of a house with three other roommates on the bus line that would take me to work. By doing this, I continued to pay roughly the same amount of rent that I had been while I was a full-time student. This was one of the cheapest housing options that were available to me at the time. While it wasn’t super glamorous (the basement was drafty and damp), it served the purpose of giving me time to get an idea about my new financial situation. This allowed me to get my feet underneath me, adjust to a new job, and get a handle on exactly how much money I owed once the dust of graduation had settled.

Find out your monthly loan amount — and pay more

I was initially given a monthly amount owed by the National Student Loan Service Centre of $402 a month. With interest, this estimated me paying off my government student loan in about nine years. I also had a line of credit to contend with sitting at about $10,000 and with a much higher interest rate.

Regarding my line of credit, I decided on paying $1,000 per month towards all my debts and initially divided it with $402 going to my student loan (as owed) and the remainder going to my line of credit until this was paid off. Once I paid this off, I was able to dedicate the extra $598 (of the $1,000 total I was paying per month towards my debts) to additional payments on my student loan. These extra payments would then be applied to the principle only of my student loan. This ended up equating to about 25–30% of my take-home pay for the month, an amount that I was comfortable with.

Set aside fun-money to avoid debt burnout

Think long and hard about what it is that you love to do. What is it that matters to you the most? If you are paying off a large sum of debt, you will not pay it off overnight. At times paying down debt can feel all-consuming, and it can be hard to think of anything else. To avoid these feelings, it was necessary to put a little money aside each month to be able to do the things that bring me joy.

When I was paying off my loan, I was fortunate to be able to travel, attend weddings and events hosted by friends, and take time to visit with family. Not missing out on those important moments was something that was a huge priority for me.

This involved planning ahead. Even when I didn’t have a trip or event planned, I was diligent about setting aside money, so when occasions did arise, I was ready and could afford them.

It came with a bit of sacrifice. This meant setting aside a certain amount of money each month, or in my case, each paycheque in preparation. To do so often meant having to limit my spending in other areas: housing (previously mentioned above), clothing, car.

By setting aside money to still partake in some of the things that brought me joy, I avoided the loan payment burnout and feeling stretched beyond my means. I was also able to visit some great places, spend time with family and friends and make lasting memories.

Set a loose budget

I found that hardcore budgeting (allocating very specific categories for everything from entertainment, gas, clothing, home goods etc.) was never my cup of tea. I found that often what I was spending my money on would be in a state of flux from month to month. However, I found having a loose budget to be extremely helpful in determining what I could afford to pay on my loan each month without feeling stretched too thin. This required a bit of trial and error.

It is essential to know how much money you need for absolute non-negotiables (rent, heat, water, cellphone bill, insurance) and how much for general day-to-day living (clothing, food, gas/transportation). Once I understood these numbers, I would usually allocate myself a certain amount per paycheque amongst these categories to spend as I saw fit. The remainder then would be divided amongst a small amount of savings and then loan payments. I found apps like Mint helpful in tracking my spending and determining how much money I would need for each category monthly. Another great one to try would be You Need A Budget.

By following this strategy, I paid off my loan in four years without feeling deprived or like I was missing out on key life experiences. Better yet, I was able to use these same ideas to save for a downpayment for a house that I purchased this past fall. This is an accomplishment I wouldn’t have thought possible when I had first graduated and was staring $50,000 of debt in the face.

The road was long, but there is a light at the end of the tunnel, and I find myself using many of these same strategies when it comes to managing my money today.

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Serving up the 30-something perspective from the frosty north. She/her.

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