Continuing the student loans thread, I went back and asked my LinkedIn contacts how they paid off their student loans. Their stories provide both advice and inspiration to anyone feeling trapped by education debt.
People actually pay them off?
The hard way, one month at a time. Never late, never skipped a payment. When ever I had extra I would make the regular payment plus an additional amount to the principal. Once it became managible I was able to pay the balance in full.
My startup got bought out by intel in 1999. Good bye debt!
I kept ignoring it until…..My great uncle (who I had met exactly once when I was 7 years old) died and left me $17,000…. There was plenty left for beer and cigarettes (Even after I paid off the remainder of my loan)…Ohh yeah I also bought some good audio monitor’s and a 16 channel mixing board PLUS paid my rent. Boy 17K went along way in ’89! Thank you Uncle Morey!!!!!
I had about $15,000 in student loans when I graduated in 1985. I deferred for four years while I served as an Army Officer. I did a Sallie Mae consolidation loan at about 6%. The term was fifteen years and if memory serves it was around $110 per month. I started paying off a month at a time while I started my civilian career and paid my dues. About 9 years in, my financial situation improved significantly due to promotions etc and I had the money needed to pay it off. I chose to do so more for convenience but loved the idea of the loans being gone.
The long, hard road of one payment at a time. When I had extra money, and my higher interest debt was paid off, I put any additional cash I had into paying it down more quickly. I finally got it down to the point where I was able to pay off the remaining balance with one big check. It’s like any debt. Avoid getting unless you need to, and when you get some, pay if off as fast as you can, starting with the highest interest cost loans and working your way down. For morale purposes, I also found it helpful to pay off small debts that I could take out fast even if they didn’t have high interest rates. I just wish I had figured out this finance 101 lesson earlier in my life. As it is, however, I have had zero debt for years. It’s a great feeling.
Still paying it off! But with automatic online payments, I’m never worried about having a late fee or forgetting to write a check! Online Savings blog
I continued to live like a student, after getting a full time job. No new toys, car, or anything like that. I was lucky to get some good co-op positions that reduced my need for loans, but I still came out with $10k owing. By living below my means, I paid off the loans in 18 months.
I got hit by a car. I paid them off with the insurance settlement.
I had a bit less than $15k in loans when I graduated. I hated the idea of being in debt, so I paid it off as quickly as possible. Even though I didn’t have a high paying job after graduating, I lived frugally and managed to pay it off in about a year. Financially I might have been better off investing some money and paying off the loan more slowly, but I just didn’t like the debt.
I’m paying the minimums because given the interest rate differential, I can make more investing the money instead of using it to pay off my loan.
I didn’t pay mine for over 20 years !! Every year they kept my tax refund which amounted to next to nothing – then a few years ago I wanted to buy a house so I got in touch with them, and they agreed to drop all the interest for 20 years and settle for half of the original loan 🙂
My last year of college saw enough grants and scholarships to pay for both semesters, and I was even approved for a sizable student loan. Looking back, I *wish* I had not taken it! The interest I ended paying on it was far from the worth of the things I bought from using it. Ugh 🙁 My advice? Skip student loans as much as possible, especially if you don’t need them. The burden of the debt just isn’t worth it.
So, what’s YOUR student loan story?