How I payed off my Student Loans

I'm so happy to say that as of today, May 1st 2014 - over a decade after college began - my student loans are no more. That includes undergraduate and graduate loans, about 25k each (at least..I'm afraid to look). So long! The horrible weight has been lifted.

Here's how I did it.

1. I lived in Poverty

When you are $50,000+ in debt, you are poor. Simple as that. You might not think you're poor, but you are. Therefore, you should live that way. Don't live like other people. Bad news: the chance you will get job in your field is about 50%. Good news: your education will probably pay off financially in the long run. But for now, you still need to aggressively pay off those loans. With 7% interest rate, time is not on your side. Interest will sap your soul.

As for me, I'm naturally a simple man for the most part. That helped. I don't buy much crap. Stoicism: "knowing that you have enough is abiding contentment indeed." As Jesus said, don't be worldly. I remember living in a really shitty, cold, small studio apartment one year, sleeping on an air mattress, working well over 40 hours in food service jobs. The floor was so cold that I would wake up because the air mattress was completely deflated. Yet I loved living there. A guitar and a laptop were my biggest expenses (the laptop I needed for an online degree). And a fridge full of Natty Light. I never had cable, just Internet. No smart phone. I didn't buy a TV until recently (it was for hulu, not cable). We walk to work. I rarely buy clothes, we eat out once a week, never go to the movies, rarely buy gifts for other people (my wife and I rarely buy gifts for each other). We use freecycle, garage sales, and hand-me-downs. I cut my own hair, brew my own beer, and roast my own coffee. As for hobbies and entertainment, a library card works 90% of the time.

The point of living in poverty, of course, is to free up all extra income, pumping a large percentage into your debt. But - this is really important - you still have to invest some of that money into your retirement (401k, IRA). If you can. That's also a numbers game. I once read a Dummies book on investing, which opened my eyes. Time is not on your side if you wait to invest.

2. I got a decent job

It's hard to pump all your money into student loans when you are working well over 40 hours in food service jobs. You get by. Then something amazing happened. Liberals like me call it a "living wage." Luckily, I was able to get a one at the library, getting my Master's Degree in Library Science at the same time (another huge debt). I was able to pay off some of my undergraduate student loans while I was getting the degree.

Every month counts, every payment counts. A few promotions later, I was making extremely aggressive payments: $1,000 dollar payments every other month, sometimes even more. When you are 50 grand in debt, that's a drop in the bucket. Importantly, I was still putting money into my 403(b) for retirement.

Unbelievably, I was able to actually start a family and have a kid. It's sad to say that many people my age are not able to do this because of their massive student loan debt. This is a political issue, but blaming it on politics will not make your loans go away. I'll save that for another post.

3. Help from my wife

Perhaps most importantly - and you probably think this is cheating, that's okay - my wife agreed to help me out by giving me a 0% interest loan, which took care of some of my student debt (about 1/3 or so). I had already payed several thousand dollars in interest alone at this point. I'm extremely lucky, but this saves our family thousands of dollars in future interest that I would be paying to Citibank, or SallieMay, or Educationloans.org, or the various other banks that have "serviced" my loan (yeah, it's fucking ridiculous that private companies make huge profits off so called "federal" student loans, but I won't go there). Anyway, without her help, I would be paying for years to come (maybe 2 years). Now, I can pay her off much faster.

Not only that, but my wife must have lived during the Great Depression. She is the epitome of frugality, an amazing saver, and a great example to me. She was raised that way. She could save money on minimum wage - she's that good.

4. Pay aggressively

There is only one smart way to pay off your loans--aggressive, often, and as much as possible. To make the "minimal" payment is absurd. And forget about stupid payment plans - that will make them rich and you poor; you will never be able to start a life that way; the debt will hover over your entire life like a black cloud. Live poorly, get a living wage, and pay aggressively - and some day, just some day, you might be able to buy a house, have a kid, or do other things you want to do. Good luck!

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