How I Paid Off My Student Debt in Six Months

It’s been seven years since I retired my student loans. I’ll never forget the mixed feeling of graduating from school with my degree in one hand yet starting a new life with $17,000 of debt in the other. To put it bluntly, the feeling sucked. Ok, sucked isn’t strong enough a word -TOTAL SUCKAGE is more like it. Anyone with student loan debt will agree that leaving the academic world with seemingly nothing more than a piece of paper (and negative money in the bank) is not fun.

Apparently, the average amount of debt a student carries upon graduation is about $19,000. So really, my $17,000 wasn’t soo bad. But still, looking back on those early days makes my stomach lurch and my head ache. Back then I knew that debt felt bad, and I wanted to get the debt monkey off my back as soon as possible. So I made the commitment to myself and to my financial future to get outta student debt fast.

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Here’s how I paid off my student loans fast, in six months:

1. Negotiate your first job offer:

You have your degree, now use it! The most important action I took in paying down my student debt was to not settle for my first job offer. So many new grads get excited with their offers and accept them quickly in fear it’s the best they will get. Not true I say! Companies exist by keeping their costs down, hence paying their new graduate employees as little as possible. When you get your first offer (congratulate yourself for starters), and then negotiate for a little bit more. When I got my first offer, I thanked the company wholeheartedly for their offer and stated my excitement towards the position and working with their team. I also mentioned how I felt the job was a good fit for my skills and my direction. I kept the happy feeling going by saying I was flexible with compensation, however, would the company consider $X amount more as my skills were solid in areas A, B, and C. Surprisingly, this has always worked for me. While my fellow graduating students accepted their first offer, I negotiated better compensation.

2. Keep living like a student:

You’ve been living the life of a student up till now, so keep doing it! When I graduated from school I kept my same inexpensive apartment, my same bus pass, and my same habits. By continuing to live as I did when I had no money, I didn’t increase my cost of living and consume all my newly earned salary. Instead of keeping up with the Jones, I kept up with my loan interest and paid down lots of loan principal up front. Paying down principal quickly prevented my loan from increasing in size with compounding interest. In fact, since my loan didn’t start accruing interest until I was out of school for six months, I knew I had some time to pay it off before interest became my enemy.

3. Use all available tax credits:

In Canada, students get tax credits for tuition payments and the education amount. Back in my student days, I would file my tax return and use all my credits from my “Tuition, Education and Textbook Amounts Certificate” (T2202A). Sooo many students get this form and “loose it”. Well, let me tell you, if the good people at the Government of Canada are going to give you a break, you’d be silly to squander it. So keep all education tax receipts and use them towards paying less tax. The tax savings usually got me a refund, which I then applied to future educational expenses, and hence borrowed less money and accumulated less debt. If you live in the USA or another country, do yourself a huge favor and familiarize yourself with student tax credits in your area.

4. Save for retirement:

New graduates always laugh at me about saving for retirement. They say “I’m only 20-years-old, why do I need to start saving now?” The answer is simple, more tax breaks. When you begin your new job and start pulling in a nice salary (cause you negotiated from #1), you will pay more tax! Welcome to being an adult. BUT, if you start contributing to a Registered Retirement Savings Plan (RRSP) through your company or on your own, you will pay less tax. Along with paying less tax, contributing to an RRSP has the added bonus of giving you the feeling of growing a nest egg. Let’s face it, working hard and having nothing to show for it but debt repayment isn’t exactly fun. So growing some savings can really make you feel good. When I contributed to my RRSP way back then, I took my tax refund and used it to pay down more student loan debt. Consider this tax break the new math: you contribute to retirement, you get tax breaks, you get tax refunds, you then feed the refund to your debt. You win the “get outta student debt game!”

5. Delay buying stuff:

I’ve seen sooo many new graduates land their first job and then go out and blow their pay check on crap, or stuff. They might buy a new car, new stereo equipment, or rent a bigger apartment. Heck, I’ve even seen new grads buy a new condo! My advice is to delay buying stuff. If you really want to get out of debt, your goal should be to pay it down. Buying stuff just fills an emotional need for the moment, and then the consumer high is gone. I really hate stuff, and I often call stuff crap. After I graduated I bought what I needed for work, which was clothing. That’s it! I saved myself from the “buying crap” mentality and directed my earnings into my debt. It worked!

How did you pay off your student loan?

fox

Your two cents:

  1. Julia May 29th, 2008

    I’m just about to go back to school, and I am hoping to pay it off as I go. Thanks for your tips, it’s nice to know I don’t have to have a debt hanging over me for the rest of my life!

  2. Kerry May 29th, 2008

    @Julia Good luck with your studies! You are most welcome. :)

  3. David July 1st, 2008

    Great posts, just found your blog through the new network :)

    One comment on point #2 about interest not accruing until 6 months after your grad date. Maybe this is true for a BC student loan, but for a Federal (Canada) student loan, it starts accruing from graduation day. Its just that payments aren’t due until 6 months later.

    We had the money to pay my wife’s student loan off right after we got married in June… but putzed around because, hey, we had until November to get it paid. Send the cheque in August, and then had to pay 80 odd dollars of interest. Not a big deal, but it annoyed me…. that could have been a huge dinner date or something…

    I’ve noticed that lots of students have this perception, so I try to remind them that even though they don’t have to pay until 6 months later, interest starts on grad day.

    Great blog, and I look forward to going back through the archives.

  4. Ben July 3rd, 2008

    Interesting posts.
    Agree with David that my Ontario student loans accumulated interest from day one, although first payment wasn’t due for 6 months.
    I had $30,000 in student debt that I paid off in less than 1 year, due to a combination of decent job and living like a student. Best move I ever made!
    Keep squawking!

  5. Kerry July 3rd, 2008

    @David Thank you for making the point about Canada Student Loans accruing interest from graduation day. Indeed, this is a point many new Canadian grads miss with this type of loan. When I graduated I had two loans, one Canada Student Loan (which I paid off in under a month after graduation), and another loan which did have interest forgiveness for six months after graduation. Whatever type of student debt a grad incurs, I think it best to know the payment and interest details before taking on the debt. Knowing the details on a student loan can only better prepare a student for paying off the debt and building a plan. Thanks again!

    @Ben Paying off 30K of student debt in one year is very inspiring and shows it can be done. Wow! When I paid off my 17K I felt free and light…and yes, paying down that debt was also the “best move I ever made.”

    LOL I love to squawk. ;)

  6. Amanda September 7th, 2008

    I have a question.
    How do I pay off my student loan that is almost a $17,000. I just got a new job and I get paid like $9/hour for 9 hours a day.I live with my parents. Soon I have to get me a new car also. What do I do?

  7. Chris September 8th, 2008

    “blow their pay check on crap, … I’ve even seen new grads buy a new condo”

    This is not necessarily true, if you are in a hot realestate market and all signs point to a 10-20% increase in housing prices, you are better paying the minimum on your student loan and investing in a new home/condo. Live there for a year or two then refinance/sell the home and pay off your loan.

    The bonus of this approach is you purchase a new home and pay off your student loan at the same time. My girl friend and I did this and payed off $75000 of loans in three years and still had money left over for a down payment on our next home. The best part…I never lived like a student once I graduated. :)

    Smart investments are the key…just make sure the investment will yield a higher return than the interest on your loan. “Crap” can be defined as depreciating items ;)

  8. Amanda October 6th, 2008

    Hey. Thanks on your tips. I agree 100% on everything you said. I just graduated and I see some of my friends that graduated a semester before me that bought condos, new cars, etc. and have not even started paying their debt off. So its true,.. people want to satisfy their current desires but don’t realize how long the debt will haunt them! :)

  9. Justine November 10th, 2008

    I took a year and a half hiatus from school and have to pay off the student loan from my first year and a half ($13K) before they can transfer my credits…

    I had lost all hope in finishing school.. but I’ve definitely felt a LOT lighter since reading your tips.. and I’m back in school @ a community college, where I DON’T have to take out a loan to complete my associates degree. =)

    Thanks for this blog!! =)

  10. Kim November 20th, 2008

    I will be finishing school with $36 000 in debt in three weeks, but I have $23 000 in an estate account under my parents’ name from an inheritance. So, luckily, that can make payments if I find myself unemployed at first. Additionally, once I get a full-time job, my fiance and I plan to live off his salary plus 1/3 of mine and just put the extra 2/3 that year toward the loan. That should take care of it. I will need a newer car for my potential new job (outside transit boundaries and my current car is unreliable and 15 years old) but hey, we can do it!

  11. Karissa December 13th, 2008

    Great post. Wish I had read it way back in 2002, when I graduated with a B.A. and a $30 000 student debt :)

  12. Fabulously Broke January 2nd, 2009

    I cleared $60k in 2.5 years, and increased my net worth to $80k. So I totally agree that it can be done if you just cut out all the fun stuff because you just need to clear it NOW before it gets out of control.

    Fabulously Broke in the City
    Just a girl trying to find a balance between being a Shopaholic and a Saver…

  13. SP January 6th, 2009

    I have no desire to pay of my student debt in a hurry. It is at 0% (I’m a half-time student), and when I’m not in school, at about 4%. I’d rather pay the $125/mo and invest in my retirement, save for an efund, and even save for travel than dump a lot at my student loans. I just don’t feel it is a burden, but rather a bill. Like insurance or something. I pay it, but it doesn’t weight me down.

    But aside from my current debt, I had about $6000 of private loans at a higher variable rate that I paid off ASAP.

  14. Ricardo January 16th, 2009

    With a 180K student loan and a desire to do charity… what to do? I have great motivation to develop and plan strategies for the development of the “underserved industry/world”… I am not talking only about the poor, hungry and cold out there… but also the many professionals that cannot apply their potential because of student loan debt.
    I certainly am not going to stop attending conferences, info dinners, extra classes and seminars to pay off my 180K 4% student loan – a 2 year stagnation could mean a 4 year trying to catch up. Maybe not so, as I put it…

  15. PureVoice January 23rd, 2009

    I agree with SP and Chris.
    Same as SP – I paid paid off my high interest private loans the day before graduation, but even though I have $130K in federal student loans, I am in no rush to pay that off. The interest rate is fixed at 3% – what a deal!
    Sure, it is always a good idea to live below your means, but live like a student? I’ve been doing that for too long (9 years) and it’s time to grow up to my big new salary I negotiated from #1. (wink) So, investing in a new home is a good move as it can guarantee a huge ROI. I recommend reading RichDad-PoorDad for some basics… As Chris so eloquently stated, “crap can be defined as depreciating items” such as cars, vacations, and, Miss Fox, even clothes!
    Love you girlfriend! Great Blog!

  16. teresa February 4th, 2009

    great post. i paid down about 40K in a year and half. i made it a policy to pay at least so much every month, which was $2000. then extra money i put in as i could. with that kind of discipline and determination, come the payoff of the loan i was still in low-cost living mode AND i was in the mode of stashing much away each month. i was able to then put the same momentum into buying and paying off a car, which was badly needed.

  17. Ashley March 3rd, 2009

    Girl, you are quite amazing!!! Those answers you gave to minimize debt is phenomenal!!! I just hope I am able to delete my debt as fast as you did. By following your advice, I think I will be able to reduce my debt substantially within a small time frame.
    Thanks so much,
    Ashley

  18. Tizzy March 11th, 2009

    How are you guys doing this? You must have great jobs. I have a townhome which granted takes a chunk of my montly check but otherwise I’m quite frugal and I’m freaking out about graduating with my Masters and 100K in federal loan debt. My job is good but it’s not that good. I’m going to try doing some organization training and put all that profit to paying it down.

  19. Kerry March 11th, 2009

    @Tizzy Great Question! I put 2/3 of my income towards debt repayment.

  20. J March 24th, 2009

    Good tips on this one!

    Here’s another great one:
    1. Do not buy a car if you live in a city! :)

  21. Josh Lupresto April 22nd, 2009

    Ok, so everyone makes it sound so easy. I’m graduating with my BA in electronics in 4 months and will be totalling about 80k. I only make a little more than half that right now(But hoping for a raise when I show the current boss the papers) And I’m starting a family and trying to get out of renting and into a small starter home. Consolidate, don’t consolidate, I’m so panic’d. All I think about is money problems. What do I do?

  22. Journey July 14th, 2009

    I have $110k in student loan debt. I feel hopeless sometimes.

  23. Brad July 24th, 2009

    I have $28,000 in student loans. I feel helpless because the interest is literally making it NEXT TO IMPOSSIBLE for me to ever pay back this amount in my lifetime. When I see barely any money going towards my principal, and my INTEREST is EATING up my money, I seriously feel helpless, and depressed.

    Is there ANY way to not have to pay SOOO much interest to where I feel like I am barely making a dent in paying back my student loans?

  24. Jeff July 26th, 2009

    I stumbled across your blog/site looking for reviews on MoneyDance 2008 (thank you for a thorough and unbiased review). I was intrigued by what else you had on your site and started at the “new” link and found this article on paying off student loans. I am in the process of switching to a different school, but will be bringing $12,000+ in loans with me with about that much racked up with the new school. The company I worked for would pay for my schooling, but was recently laid off which makes your entire site something of great interest to me. Frugal living is something I have attempted to do, but rarely succeed at. I guess I did not comment much on this particular article, and will close by saying that your suggestions and observations are spot on. Thank you for sharing what you did to pay of your student loan debt!

  25. Sara August 11th, 2009

    I graduated 11 months ago with $36,500 in student loan debt. I currently have $2,500 left and will be debt free by the end of this month! How I did it was that I promised myself that I’d live like a student for the next 1.5 years and then splurge on myself once I cleared my debt. With that reassurance in mind, I sucked up my pride and immediately moved back in with my parents upon graduating from school. I’m lucky, I didn’t have to pay a cent for rent or food. Basically, 90% of all my paychecks went to paying off the loan and the last 10% for expenses (monthly bus pass, cell phone bill). I started paying whatever I could from day 1, even when I was in my grace period. The key is staying focused and having a positive mindset. Contributing whatever small amount you can now can make a huge difference in the long run. Good luck everyone!

  26. Kelsey September 22nd, 2009

    I really want to know what kind of jobs you folks have that you can pay off so much. I have a “good” job right now that pays about $1800/mo, my “cheap” rent is $750/mo, I have no car but I do pay for private health insurance, etc. After my expenses, I have about $400/mo, and if I even use $300/mo of that for my debt, it’s still pretty much the minimum payment. What are you all, CEOs?

  27. Anita October 18th, 2009

    Thank you for some great tips. Once you are deep in debt it is quite difficult to get out of. Even though cutting back on things helps but if you don’t have sufficient enough income to make large enough payments, then you do have to find ways to add to your income. I created my website just for this purpose to concentrate on getting rid of my debt once and for all.

  28. BravoBilly November 26th, 2009

    I went back to school when I was 36. When I graduated I had $8500 in student loans, a new wife, new baby, and toddler. I am now 65 years old and my student loans $17,000 are on forebearance, I have several other loans that I stuggle to pay as I am struggling to find work and live on unemployment that is coming in again and social security.

    Going back to school gave me satisfaction of getting a degree, but it was not until a little while ago did the degree even count and finally what counted was the fact that was not able to drive a bus because health issues and not my degree, so my job ended.

    My Associates degree, and my Bachelors degree have given me nothing of value other than some things that I use from time to time in a job here and there…I say stay away from getting in debt unless you can really pay it back…
    He says as he eyes the Fingerhut catalogue one more time…

  29. Rose December 10th, 2009

    sorry, thought this article was stupid… maybe it’s for the totally clueless people. anyway did all of this above and is still in debt 4yrs later. but it’s probably b/c i had a job lose and never got another job in the field i grad’d in :( stupid economy. that’s ok though.

  30. Rob December 16th, 2009

    Want another way to pay off your student loan? Work for the government – at least in BC – because they will make payments on your student loan for you.

  31. BigBoy January 15th, 2010

    I paid my ~$20,000 with credit checks and then file bankruptcy. It was the quickest loan payment ever.

    Now I’m debt free, making great money and keeping it for myself.

  32. josh January 15th, 2010

    Yea, except you can’t get student loans discharged through a bankruptcy!

  33. Stacey January 24th, 2010

    I have to Agree with Kelsey (see above)…
    I have about $27, 000 in school debt and I make about $2,000/month. I bought a house not too long after school..and its even cheaper than rent, except when you factor in the heat/hydro. Having said that… I dont have a lot of money left over to be paying off my school debt quickly even though I would like to.. and even living frugally.. So, seriously? how are all of you people paying these high debts off in 1 year??? what are u doing for a job? you must be making a lot of money

  34. Stef February 7th, 2010

    1) Know your monthly Operational Cost: list ALL your expenses including the 5$ latté you buy every morning. You could be quite surprised how much you spend each month (I was).

    2) Strip down your list to keep only ESSENTIAL items (rent, heat, grocery). You’ve just established your new operational cost, the amount of net income you should live on. Keep this number in mind … alawys.

    3) Since you now have some free cash available every month, debt payement is possible. Just do it!

    I put aside 50% of my net income, enjoy a cheap rent, live with no debt and avoid the use of credit. Don’t spend money you don’t have.

  35. Kelsey February 8th, 2010

    @Stef: That’s all well and good if you make a good living, but what about those of us, like me and Stacy above, who don’t make much of a living? I make about $1200 a month. She says she makes $2k a month. I pay $750 a month in rent (low for DC), I have no car, no insurance, etc, and I haven’t bought anything other than food and work necessities since November 17th, and yet, it’s almost impossible for me to pay more than the minimum on my credit card. Being able to save 50% of your income is great, and very admirable, but recognize that you’re a bit privileged in having a job that is high-paying enough for you to do so.

  36. Stef February 10th, 2010

    @Kelsey: I understand your financial situation is a bit tight and having a lower income doesn’t make things easier. But you must deal with your debts now before it gets out of control. A credit card is a dangerous ‘toy’ if not handled properly. If you find yourself unable to cover the full amount on your card every month, get rid of it! Get used to pay cash, stop being ripped off by interest fees.

  37. Kelsey February 10th, 2010

    @Stef: You don’t seem to understand. I make about $1200 a month. My bills, plus the minimum on my credit card, come to about…$1200 a month. I haven’t bought anything on my credit card in two years, but I still have about $6k of debt. I have spent a total of $30 on non-essential costs (i.e. anything other than food, gas, or rent) since November – know how I know? Well, I had $30 in cash in November, and I ran out of cash last week, and when I did, I realized that my debit card had expired back in November (our household expenses come from a joint account card that is separate from my personal one). I honestly don’t spend any money other than that I spend on essentials, and I don’t use my credit card, but it’s difficult to pay off debt if you don’t have a well-paying job. My argument was that it seems that the poster, and most of the commenters, have great jobs that allow them to save a lot of money.

  38. Stef February 11th, 2010

    @Kelsey : Ok … first, I’m no CEO, I can’t even afford to buy a house in the city where I live. That’s how great my job is ;) Of course, you will need some extra income in order to pay off your debts. There’s just no way around it. If you can’t cut anymore in your budget to free some cash, then you’ll need to use your imagination: get a better paying job, do more hours at work (so you have a full week) or get a 2nd part-time job, talk to your friends about your situation but get something going.

  39. Kelsey February 11th, 2010

    @Stef: Believe me, if I could get a third job (I already have two), I would have done so a long time ago. Unfortunately, I’m in a creative field, and those aren’t exactly hiring right now. I also simply don’t have time for a second job. I’m in the process of trying to start my own freelancing business and I currently work 14-18 hours a day, between my current two “real” jobs and the work I do trying to get my freelancing off the ground.

  40. Stacey February 11th, 2010

    i’m still with Kelsey on this….not trying to gang up or anything.. your ideas are very good.
    Just in regards to your comment “do more hours at work (so you have a full week) or get a 2nd part-time job” ..well, who’s to say that we aren’t already working a full week? Thats what Kelsey is saying.. she gets paid $1200/month working MORE than a full week and I get paid $2000/month working a full week (40hrs). But even at that it is still hard… and Yes, we Could get a part-time job but sometimes our lives don’t allow us to do that. For example: I’m taking evening french courses to make myself more marketable, I regularily go to the gym after work and so my only down time is on the weekend which is often spent doing renovations to my (very old) house. If I were to take on a part-time job on the weekend, it woudlnt last long at all because I would be completely burnt out. Everyone needs down time.
    So..not trying to make excuses or anything.. just, it is admirable that you guys can pay off debt so well because a lot of us don’t have the luxury. Unfortunately, for some of us, we have to use our credit cards ONCE IN A WHILE (aka, rarely) to buy things like groceries, ect. I live in the county..1 hr away from my job (believe me, that is NOT ideal but I can’t find anything local at the moment)… so I spend $300 a month in gas! I know if I could cut down on that, I would have a lot more money for savings/debt repayment however, I simply can’t get a job that pays even close to what I get now where I live (and no, i won’t relocate – I just bought a house).
    Seriously.. if people really dont mind, I’m interested in people listing what they do for a living??? It is more a personal interest thing and to learn where the market is (job wise). and Hell – the provice. That may help everyone get an idea where we’re coming from (literally). I’ll start!

    I’m an Administrative Assistant in Ontario

  41. T February 12th, 2010

    Question, did your loan servicer ever send you a confirmation letter that your loan has been paid off? It’s been almost a month for me, and I’ve even called in and requested a confirmation letter and still none. Not sure how long this takes…

  42. Dan February 25th, 2010

    Some great tips and advise, I’ll definately share this on my blog as well. I will say, that it takes a certain kind of person that has some dicipline. Many people I deal with have little patience to to pull it off.

  43. Kimberly February 27th, 2010

    I am a 45 year old stay-at-home mom with 5 children ages 7 -18. My husband died in 2008. My oldest son will be starting college this fall. He is an extremely above average student, amazingly mature for his age, and a great leader. He has been on mission trips around the globe (funded by gifts from family and friends). He wants to be a Dr. He has landed a full-ride scholarship at an in-state university. Its not listed as the best for Medical, but he would be in a newly developing Honors/Research program. They would pay for everything except his food. PLUS $5K a year to their Grad school! It is not his first choice, but barring a private school giving him as good a deal, he is thinking he needs to “Settle” for this one just to avoid the debt. What do you all think??

    Also as far as the comments and questions about jobs .. my husband got his Assoc and then his B.S. degrees shortly after we were married. He worked 10 yr as a computer consultant in a huge accounting firm in Chicago. He was laid off and ended up literally after 7 yrs and $50K in debt, going back to work for his dad digging basements, and ditches, and septics!! I kinda agree on one point … WHAT A WASTE OF MONEY FOR THOSE DEGREES IF YOU CANNOT FIND GOOD JOBS! That is so sad to read how many gave so many years of your lives and now it is not helping you get the jobs in a market you thought you could prosper in! I pray things turn around quickly. My debt was erased with the Life Ins proceeds. Sad way to get out of debt. But what really helped us .. the best day of my life financially was standing in walmart and maxing our last credit card on toilet paper!!! That was it … it was CASH or NOTHING. We found cheaper insurance. Our house interest rate was low. Just dropped again. And prayed like crazy! If its okay to post something specific … Dave Ramsey’s program was what finally got us thinking right about our debt and cash and expenses. Yes, it takes enough income, but going through his program, he has ideas we never thought of that really worked and decreased our expenses. Just something to look at. What about car-pooling? Or public transit? My husband finally gave up commuting a hour each way for the train. The hours sucked, but the money saved in gas – the train tickets = a lot more money kept in our pockets. It was worth the time sacrificed. When it got too much, he arranged telecommuting some of his hours. There are ways … we just have to be very creative. And by the way, Dave does suggest to build FUN money in! Just make it one $5 latte a week instead of 7 … even that helps! :)

  44. Becca March 4th, 2010

    Great blog,

    Congrats on paying off your loans. I still have at least $25k of student loan debt myself. And it’s great that you managed to find a job that helped you pay off that debt.

    Sadly I graduated about 2 years ago and of course the bad economy made it impossible to find anything out there for a new college graduate. I was pretty much stuck with the interest accruing and accruing and being stuck on claiming unemployment on my student loans.

    I finally joined up as a VISTA, which is part of the AmeriCorps program which put my loan on forbearance, as the VISTA program ends up putting my loans on forbearance, plus at the end of my year term the interest will be paid off. I also get paid a small stipend. It’s not a million dollar salary but it works. Plus I live with my folks, yea I’d like to move out sometime in my future but with what I am making it’s just not realistic.

    I hope someday I’ll manage to pay off my student loans and be debt free.

  45. Sarah March 8th, 2010

    A couple of student loan tips I’ve picked up from friends:

    If you are willing to relocate to a remote/northern community in Canada and are a professional of some sort (e.g., teacher, doctor) you can sometimes get your student loans forgiven.

    If your work is seasonal (e.g., teachers), when you are in your non-working period, apply for interest-free status on your student loans. Continue to make the payments – they go to pay down the principle saving you lots of compounding in the future.

  46. Evan March 13th, 2010

    17k paid off in 6 months is quite an accomplishment!

  47. NAMENDES March 31st, 2010

    Just thought I put in my 2 cents…
    I finished graduate school (MD/MBA) in Chicago with about $120.000,00 in debt. Six months after graduation I received my first bill and almost fell stunned to the floor! But I had a plan… Back in college, while the upper class students were taking the left over money from their loans and traveling to Cancun and Europe, I put mine away and saved it in a money market account, back in the 90′s it paid decent interest. Then in my last year in college, I took all the $17.000,00 dollars and change from my savings and bought a house, three units, I lived in the basement and rented the top units to help with the mortgage. I went off to med school two years later and rented my unit as well. The house was paying for itself and I had $300 a month spending money. Then six months after I finished med school, and received my first bill, I put my house on the market (I paid 147K for it) and sold it to a developer for 530K! paid off the realtor commission, paid off my balance on the mortgage, paid off my student loans ( the largest check I ever wrote in my life) and still was left with enough money to by two cars (I got married to a Canadian and she needed a car) and two homes, one for us to raise our family in a modest suburb and the other is a rental … I love rentals as you can tell by now…
    we are raising our kids very aware about money and debt and hope they too can live simple lives. Best to all!!!

  48. chris April 20th, 2010

    When I graduated I bought a car and had no opportunity to negotiate for higher wages. After working for a year and making my monthly student loan payments I called in to see how I was doing. To my dismay I found out that I had only paid a small portion of the 14k debt that I had accrued. I then decided to use one pay check a month to pay off my loan and to use the other to live off of. I was living like a student at the time, so the 240/month rent with a roommate was an excellent opportunity to sock money away. I also talked to a friend who had recently married and started talking about RRSP’s which were a foreign concept to me and I started making contributions through my pay check, which if you can is excellent because you can invest before the taxes are applied by the government and a little better than waiting for the tax return. One other thing I did to increase my pay and tax return was to complete my post Bach in education, which was tax deductable and increased my yearly pay by over three thousand dollars. If I was just starting out now I would also take advantage of the TFSA’s available now which allow you to make money and not pay tax, which will be something unheard of in Canada. Oh also buy property their not making any more of it. I bought a cabin because I didn’t know where I would end up. Also if you are going to use credit cards use the ones with benefits and pay them off in full each month, NEVER spend money you don’t have. So the moral of the story is.

    1. Pay of debts as soon as possible.
    2. Invest in your future and use the tax advantage of RRSP’s (preferably through a before tax deduction from your employer
    3. Get more education and right it off.
    4. Avoid further debt.
    5. Buy Property.

  49. brad six May 29th, 2010

    Hey there. I stumbled upon your site. Good stuff! I have student loan debt but no degree. I wanted to become a pilot so I got started doing that. $20,000 debt… also got myself $12,000 of credit card debt. That $20,000 isn’t even the whole cost, I was unable to finish. Thankfully the lender cut me off. I’m sure if things were better off they would have been more than happy to lend the rest to me. If they did I’d be screwed and be making crap as a pilot to pay it off. Would have been around $30,000 more to finish. $50,000 total. I’m glad it didn’t come to that.

    So here I am delivering pizzas. That $12,000 credit card paid off, and I’ve managed to bring the $20,000+ down to $14,196.98 as of my tip money I just threw at it tonight. I pay it daily as soon as I come home with my tips. Sucks but I know I will be better off next year for it.

    This is a little scary but if you’re wise this should work only if you have good credit though. I put all my bills, gas, food, etc on a 0% interest credit card and pay the minimum and pay what I otherwise would have on the card toward the student loan (about a grand a month) plus what I throw per month toward the student loan anyhow. Only so much though as that interest rate ends in november. So I’m not letting it get up too high. I’ll pay that off and the student loan should be about $12,000 at that point. I’ve already been offered another credit card with 0% interest for another 12 months from a couple different lenders. So I’m pretty sure I can continue this trend to get the balance to 0% interest and pay it off expeditiously thereafter.

    It’s hard to say exactly how quickly I’ll pay it off, but I’m thinking no more than a year or so from now. Only faster and faster because the less and less interest per day I owe that my daily tip money handles the quicker and quicker I’ll pay the principal down.

    I’m looking at going to pursue a real degree that would actually be a viable means of making a living. I hope I can do that with little to no debt. Mom is letting me stay here, not free but cheap. $250 a month. I have my other bills etc, but I think if I do it locally I can get by and not owe much if anything by the time I’m done. I’ll continue working of course. I just want to continue saving after the debt is paid off and have a nice sum of money to have a fresh start with when I’m done with college.

    And of course the trip to Russia I’ve been trying to plan! I’ve been learning the language so I want to go check the place out. My friend in Moscow says he has a bed for me if I visit, so there’s an expense cut :)

  50. Mathias July 3rd, 2010

    Too bad you didn’t write this article 8 years ago. I could’ve sure used it then. I just paid my student loans off. It’s a great feeling indeed. Now it’s time to start a savings (after buying a new computer, which is hard to live without, goes against your non-crap philosophy, but, it’s hard to avoid).

  51. Sophie July 3rd, 2010

    I have such mixed feelings reading all of this. I had the intention of continuing to live like a student and pay it all down. I paid off my credit card the summer after I graduated college and it felt great!!! I went off to graduate school directly after college in a new, big city. I scraped the bottom of the L.A. rental market and got a HUGE apt. for $400 below market…..THEN: I hit a MAJOR MAJOR depression. It started with feeling stressed, then feeling the mild blues. I continued spiraling downward. By the time I finished my graduate program, I was literally hanging on for life. I COULD NOT BELIEVE it happened to me. All the therapy I ended up needing to “come back,” and join the land of the working….well, I pumelted into sooo much credit card debt. I feel sad reading this in some ways, but in other ways, I don’t know what my life would be if I had kept on keeping on feeling that miserable. It reminds me of where I, “could have been.” I’m unemployed again d/t U.S. economy and am depressed again (but not like before). Am trying to hang on so that I can once and for all TRULY come back, have ALL debt student loand and otherwise beaten back and be able to feel “weightless” going into a marriage (when I find the right guy) ;-).

  52. James July 3rd, 2010

    Don’t end up like me. This is very very true. I started borrowing in 1979. Went back 1980-83 but did not graduate. Student debt piled up. Deferred till 1991 when I went back to college again on student loans adding still more debt. Didn’t graduate. Went back in 1994 and piled still yet more student loans. Finally graduated 1996 ending up with one undergrad degree but 181 semester hours due to changing majors 4 times. SL deferred even to this day. Total= $76K…….that’s seventy six thousand dollars. I will never be able to pay this off and I’m 3 years from 62 and wanting to retire. I think I’m in trouble unless I find some solution to this.

  53. Debbie O. July 3rd, 2010

    I graduated high school in May, 1974. I got pregnant in 10th grade, got married, missed fall semester of my junior year. I went back for spring semester, 1973, taking 6 classes (no study hall), then full load of classes my senior year. My daughter was 22 months old when I graduated with my class. I divorced in December, 1977. Tried to begin college in the fall of ’78. I also had a son in July, 1975. So now I had 2 small children, a single mom, trying to start college 4 years after high school. I did finish one semester, and was having second thoughts about my divorce. Reuniting with my ex was a necessary thing to do since I very quickly learned the divorce was definitely the right thing that I did. I finally went back to college in the fall of ’88, got grants and loans (I shudder at that now). I graduated in December, 1995. I had borrowed just over $20,000. Six months after graduated, I began to try paying the loans back. When I consolidated, the interest rate was 9%. I was told I should consolidate because the rate was more than likely to go up. I was ignorant about what my options really were. So I signed. Good jobs were not forthcoming, so I did what I could get. Hence, deferences and forebearances for a year here and there until I’d exhausted all 4 years of them. Now my balance is over $33,000. There is no negotiating with Sallie Mae, and it is illegal to refinance student loans. But people who have ‘out of control’ credit card debt can get relief for their out of control bad behavior and have half or more of that debt just go away? Let those people file a bankruptcy if they want ‘relief’. I’m sure I’ve paid very near the principle of my loan completely, however I realize I’ve buried my head in the sand about it. I figured I’d die before I ever got it paid off anyway. I see no light at the end of this tunnel. That’s why I am now determined to get this ‘monkey’ off my back and kick Sallie Mae to the curb as quickly as I’m able. I will focus and just do it. I’ll let you know how it goes with progress reports every now and then. Or if I need another swift kick in the backside. Thanks!

  54. Amy July 3rd, 2010

    I’m in the same boat as Stacey and Kelsy — 5 years out of school and I barely made a dent in my Stafford loans (and have only paid off a third of a private loan). That’s 25k total now. I agree – if you can’t get to step 1 in the article above, it’s a little hard to do the rest.

    I was born and raised in california, went to school in san diego and stayed there after graduation. I got a B.A. and was making less than 35k when I left my last job. Take home after taxes/health insurance: $2050/mo. I invested a little in a 401k, and I averaged about $700/mo on rent (with roommates! that’s the average for the area). So basically, after all my bills (basic necessities, no cable, and yes, a car is a necessity in california) I had maybe 600 a month left to live on. Oh, and I have taken advantage of tax breaks every year. But it doesn’t amount to much – the interest on my loans is already low, so I don’t get much of a refund.

    So after about 4 years, I got tired of “living like a student,” incredibly tired of roommates, ventured out to get a cheap studio ($825/mo) and after nine months had to move because the landlord was selling. I finally ended up back with my parents who live in the middle of nowhere because I came to the realization that I just couldn’t make ends meet on what I was being paid.

    The thing is – “living like a student” SUCKS. I found that after about 3-4 years of it, I was so drained by it. I want to live comfortably — doesn’t mean an expensive car and a mansion or expensive vacations. It just means not persistently on the verge of physical/mental/financial collapse. On top of that I’m single, and somehow it seems like my married friends are doing a lot better off financially. It takes two incomes just to afford their modest lives.

    And here’s the catch 22 — a better paying job often means more education. More education means going further into debt. So right now. I feel pretty stuck. My parents live in a rural area and jobs are slim pickings but I’m still going to try and find work here for a year or so and pay down my debt as much as possible. Maybe I need some real estate and investment advice. Some of you sound like wizards! I think I should move to Canada…

    Oh and Becca – thanks for the Americorp tip, I am totally going to look into that. I’m ready for some meaningful work anyways after sitting in a cube for 5 years …

  55. coxon,joseph July 4th, 2010

    Thanks 4 these.but i’m broke and student.i need help 4 fees,exam is at d corner.thanks

  56. Judy July 4th, 2010

    Good tips – I used the same concept to pay off my car as fast as possible, and saved several thousand dollars in interest.

    When it comes to college, though, best to not get into debt at all if you can help it. Scholarships, grants, internships and a part-time job all contributed to my college fund – I graduated last year with less than $1000 to my name but completely debt free! It’s so liberating to not have anything hanging over my head like that. I was able to get my dream job, working for a non-profit in another country instead of having to choose the job with the best pay and work my butt off for the banks.

  57. ebise o July 4th, 2010

    Hi..Thanks for this..I do have trouble paying my loans..I pay them but in small parts and interest accumulates..i alsohave the habit of buying…Buying what i do not need at times..I will cut this out, after i do get a few more things..But it needs to stop . I see that all these little things i buy, money can go towards paying the debt properly. The less you spend , the better. Thanks again.

  58. Deanne July 4th, 2010

    Great advice ! Thanks.

  59. Amber July 4th, 2010

    I don’t understand how people can have such high student loan debt!! I graduated with my Bachelor degree only owe $5,000 which I can pay off right now. However, due to the economy and my position being frozen I have decided to keep the money in the bank plus other money for any “rainy” days so at this time I am paying the min. monthly payment until another position comes along. But it was a great post with good tips. I still live like a college student :)

  60. Jerry July 4th, 2010

    I can do this one better. Join the US Army and get your debt paid off in one day.

  61. Jerry July 4th, 2010

    Plus you get a job and learn new skills.
    No im not a recruter just think this may help some who aren’t getting a job in todays economy.

  62. Elboogie July 4th, 2010

    I know of a person who purchased rental property with the intent of refinancing in order to pay off student loans. With that in mind, they could write the interest off!

  63. luluwins July 4th, 2010

    Don’t get a new car, live with your parents, don’t use your credit cards, find a boyfriend to pay all entertainment, fun, and food. Stay out of the malls and stores, shop at 99 cent stores when you need stuff, use interest free credit checks, and keep your eye open for better paying jobs. Work for the state or government- good 401k. Life isn’t perfect, but at least your credit stays well.

  64. Tony July 4th, 2010

    $100k in debt from school and have been in the industry for one year. Its a challenge but it helps to reduce any and all unnecessary luxuries such as cable TV and super high-speed internet. Eating smart and not eating out, also resorting cheap hobbies like running and biking to stay fit! With all of this, pay off your highest interest loans/cards first!

  65. Jay July 4th, 2010

    Great article. Bless you for giving people hope regarding student loans.

    Education is investing in yourself, so be sure you invest wisely. However, paying off any loan quickly is easier than many people think. Early in most loans, a large part of the payment goes to interest and only a little goes to pay of the principal balance. So multiply that monthly principal amount as many times as you can, and add it to your monthly payment. If you doubled the principal, you just paid of 2 months and shortened you loan by approximately 1 extra month. If you quadruple the principal paid, you paid off 4 months and shortened your loan by about 3 extra months.

    I ran a quick calculation at the us government student loan site and found that a $25,000 loan has a 10 year payment of $287.70 with interest of about $141.67 at a 6.8% rate. You would pay down the principal by about $1,8000 that first year making only the standard payment. However, if you double your payment to $575.40 per month. You would have paid your principle down somewhere between $5,000 and $6,000 in that first year (about triple the previous rate). Your $25,000 loan would be gone somewhere between 3 or 4 years, not 10.

    So doing anything you can early in a loan makes a huge difference, which means don’t wait to figure out ways to pay it off quickly. If you wait 5 years to do something extra, other people would have had it already paid off and started using that payment to increase their investment savings.

    If you can’t find extra money, then copy the couple recently in the news who earned several thousand dollars for their wedding expenses by collecting and selling aluminum cans. Or you could try to find loan forgiveness programs from employers or the government. There are lots of these programs now.

    Even though debt feels bad, compare it to how much you earn in 3-5 years. The debt starts to come into perspective when you think about a friend who went a cheaper route for college and took 6-8 years instead of 4. Many careers will pay between a quarter and a half million dollars in those 3-5 years. Even lower paying careers will pay between $100,000 and $2,000 in that same time. If you choose the slower but less expensive college, you cannot get those lost years of your life back later. So keep in mind the trade offs of finishing sooner versus avoiding loans and finishing 3-5 years later. Thanks.

  66. Daisy July 4th, 2010

    Hi,
    I have a similar situation. I am 57 and graduated with an associates, BA, and went back for a Certification in English. Started my Master’s. Had to stop and pay on $25,000 student loan and still have a teacher’s aide and bus driver job. Only make about 18,000 per year total in this depressed area. I bought a car for under $3000 and paid it off. I have a son in college who lives at home but doesn’t contribute. He does pay for his own truck and entertainment. So, I only provide food and housing for him. I don’t mind as he has dyslexia and I enjoy knowing he is safe. I also enjoy his company.

    Anyway, can’t find a job in English, too many English teachers right now, and my Certification just lapst. You have to go back and get 200 units of continuing education to renew it. My mom was ill last year and I didn’t get the required hours. So, here I am.

    When the funds are this short, I find that I must set prioities. Rents here are 550.00, utilities are (gas, electric, phone, internet, about 350.00. Groceries about 400.00. I shop at thrift stores. sell stuff on eBay, and buy on eBay, and look for free entertainment. Walking, visiting with friends, go out to eat, but find the places under $10 for dinner and only once a month at payday,free concerts at the school. I invest in the 403 at the school and I have put $50 a month into an anuity. If something should happen at work I now have total about $5000 in those two retirement plans that I could fall back on after only 5 years of working at the school.

    Something to think about, I had a friend who was retired and had his home paid for, couldn’t drive because he was deaf, and his take home pay was only 1300.00 per month. He managed to save half of his pay by buying US savings bonds. It takes the money away,( you can’t cash them for six months) so that he didn’t spend it. Then, when he wanted to pay the property taxes, he could just borrow from himself. He would take out $25 a week to eat on. Usually a bisquit/jelly and coffee and the Jr. Whopper meal for lunch. He ate something like soup for dinner at the house unless he went to someones house for dinner, and he went out to a buffet to eat and usually took me and my son too on Sunday’s after Church. He saved enough to pay cash for a new Ford Escort one year so that I could drive him to the mall in it doing that.

    It’s what you do with what you’ve got that counts. Figure out a way to get the rent down! Get a roommate, live at home with your parents, buy a trailer for under $5000 and find a friend to let you park it in their yard. If you can find a duplex and the funds to get in it, repair it, and find great renters with a job thats’ great too. But, there are less expensive ways to do things. Look for them and work on the debt.

    Good luck

  67. Sadie July 4th, 2010

    Where is the reality in this plan for the average student? These are great tips but I can honestly say I don’t know any college comrade who would be able to actually negotiate that harshly with an employer, especially in the USA economy today…even if that miracle was to occur, delaying the purchase of things is hardly reasonable. Not many grads in the US have an inkling to move home with mom and dad…we need money for rent, food and oh perhaps a bed. Continuing to live like a student IS a great idea…being sparing on food, clothes and entertainment is a great idea. I also think every student in any country should become acquainted with student tax breaks. I still think there is little reality in most of these suggestions. I wish someone would write a book about how to “spend” money when you have no money.

  68. Justin July 4th, 2010

    If you want a break from student loans, go get a graduate degree. Graduate degrees are the only investments worth making nowadays as college degrees are far too common. Your ROI (return on investment) for an additional year or two of school beyond your BA/BS will help you pay off that student loan quicker. There will be naysayers who may argue you will have additional debt because of piling on more loans. Agreed. This is true. However, look at the statistics somewhere online of future earnings potential once you get a graduate degree. I win. Also, try to apply for grants, independent scholarships, etc.

  69. dave July 4th, 2010

    what about med or dent students with 2-300k in debt….haha…i guess we also make more.

  70. Lao R, July 4th, 2010

    well i graduated from college back in 2002, however, i was making an ok living but to be honest my mistake was ME. I was irresponsible with money, which is how I have accrued my $89k student loans and have to start paying 820/m. Now I must admit i have learned my lesson, so much so that I am living much more frugal and even giving up on cellular phones with all the extras and even selling my phone to buy a cheaper phone so i can get a cheaper plan, even my cable/dsl service i have managed to downsize to under $100, that is my goal so far to keep my utilities to under $100 and i have done that. Now from reading the posts the salaries and positions and real estate depends on WHERE you live. I live in Miami Beach, Fl, which everyone should know the housing market here is terrible (down something like 14%!) jobs suck BIGTIME, unemployment is at what 20%!! I made a jump from a civilian position unto a sworn position – I am a police officer, so the pay is getting better. I am fortunate bc i get some overtime depending on my court time, but that money I dont count it, since i cant depend on O/T, i budget my check on what i would make without the O/T. Now for me I would love to lower my mortgage which is 158k @6.5% adjustable, and my loans at 89K @ 820/m, I am looking to refi and lower the interest at a fixed rate (any suggestions PLEASE LET ME KNOW), the same goes for the loans, anyone have any other lenders who may decrease the interest on the loans, my current lender is ACS, the interest rates are at 7.60%, and three @2.480%…how can i lower these bills and where can i go to get lower interest rates?? should i consolidate my student loans? how can i make this better?

    thanks to all…and good luck with all ur $$$$ endeavors!

  71. T.R. July 4th, 2010

    I have to agree with Stacey, Kelsey and Amy. While your tips are great for those in positions to do them, you have to admit that this is not for everyone. To think that in this economy some things are ‘easy fixes’ like getting another job, relocating, cutting back and assuming as if these circumstances are not already in play – well that just isn’t plausible. I know personally for my case I went back to school after 5 years of being out and by the time that I am out I will be about $60,000 in debt. (And in mention to someone’s comment above – how people can get such high debts – there are many factors; the school you attend, how many years you are in school and the tuition fees). I know when I graduate and get a job – I will be on a teacher’s salary which starting is only $40,000 a year – and that is actually HIGH compared to most areas. As far as another job – teacher positions are very ‘time’ demanding and I will have to go BACK to school to get my Masters at the same time so the issues with picking up another job will be impossible. With my rent/bills and other necessities AND the student loans I am currently paying back right now as well – combined – I will just make it to survive…and get this – I have NEVER had a credit card, so no credit card debt to worry about. Not that it will matter because soon it will be ALL student loans and well as you see above…there is quite a few. So no – these tips are not for everyone – helpful for those that make enough and do not currently have lives that are already full to the max with the daily demands of spouses and families and can make it work. The idea of living frugal lives definitely holds merit but to assume the loans can be paid back quickly for those of us that will barely get by as it is…well I think you see where I’m going here…

  72. oz July 4th, 2010

    I ignored [forgot] the loan for 15 yrs. and when they caught up with me I had saved enough money to pay it all off with the money I saved after working all those years!
    I’m good with my money like that.

  73. stephanie July 4th, 2010

    I have 190k in private and federal loans from school. I have only been out of shcool for one year and was in school for 5. The initial amount of my loans was closer to 100k. I have built up that much interest already. The payments for these loans is about $900 a month. On top of that i have credit card bills which average $400 a month, car payment, car insurance, and cell phone bill. I moved back in with my parents because I had no choice because after paying all my bills i have about $300 a month left over and that usually pays for gas, groceries, and food for my animals. As for buying things you shouldn’t liek a new car. I had no choice. I had too many loans so i couldn’t get approved for a used car or to lease. I was only approved ot buy a new car. My car was undrivable and i was using my mothers to get to work, so i had no choice but to get the car. There is no way that I could ever pay off my loans within that short amount of time. There is also no help for me out there to help me pay them off faster. They are at the lowest payments now and I fear when the payments will increase, since i’m on graduated repayments, that I will not be able to afford them. I am glad that it worked out so well for you…but I think it’s kind of ignorant to say the things you do as if you know everyone’s situation. It’s not always simple and there is not always help. I am lost and swarming in debt all because I paid for school myself….it is sad that america does nothing to help out students after they graduate.

  74. DK July 5th, 2010

    O rly? @ #1…

    Nice of you to assume that everyone has job offers flowing their way in such tough economy. If you even dare to ask a company for more money these days, they’ll just go to the next person who will gladly take what they can get.

  75. Danielle July 5th, 2010

    I think the above article is a good example of what to do when you have the right job in place and how not to squander your money away. I’m still working on my degree as due to that wonderful catch phrase “budget cuts”, my entire program has been cancelled forcing me to find somethng else. I just so happen to like medicine and hopefully will find my nitch and make decent money. I feel for those people on here who follow their passions and convictions and chose a more artisy career path. I think too often we are told to go to where the money is at, but not to go to where the heart is drawn.

    I also think that there could be many underlying factors as to how someone is able to pay their debt entirely. The good paying job, having mom and dad chip in with a few bills every so often, not having children, being able to receive decent health insurance through work (because believe me some jobs offer nothing more than the title health insurance), and many other reasons that could help someone better pay off their debt than someone else. I think that even if it takes you 5 years to pay off a debt, you know what, at least it is paid off. Sometimes being able to pay off thousands of dollars of debt within a year or so sounds nice but the reality can be quite different for many.

  76. Mary July 5th, 2010

    College grads today are in the worst possible job market because they are competing with new unemployed people who have 10 years or more of experience in the field as they apply for entry level positions. The average entry level salary today is about $2500 after taxes. There is no room for negotiation for salary or benefits because thanks to online career websites employers can pit dozens of equally qualified people for the same position. In other words it becomes, not about how qualified you are, but how low you are willing to go. Some people are so desperate they even take jobs that don’t cover all their basic expenses (not new cars or stereo systems), never mind the $50,000 student loans they are carrying from top notch universities. So, it’s not a matter of going to the wrong or right college anymore, there are simply not enough jobs and every six months a new crop of new grads graduates and starts looking for work.
    I think the student loan situation is at a crisis level and let’s not forget that this is the only debt that you can’t get rid of even through total and complete financial bankruptcy. THE FEDERAL GOVERNMENT NEEDS TO TAKE ACTION TO HELP CURRENT STUDENT LOAN HOLDERS TO REDUCE THEIR INTEREST RATES DRAMATICALLY AND EVEN OFFER MORE TAX BREAKS. The problem is that no one feels sorry for college grads, this modification has been done for mortgages and it can be done and should be done for student loans. STUDENT LOAN COMPANIES ARE ROBBING STUDENTS BLIND WITH INTEREST. Guess what folks? Student loans are one of the factors that are keeping these bright working students from making major investments like homes and cars that ultimately help the economy. So, if you would like to sell homes, cars and other big ticket items, students should be helped to pay off loans so they can have income to invest in the economy. People are paying student loans into their 40′s and that is simply outrageous.

  77. Kristy July 5th, 2010

    Why is everyone so concerned with paying off student loan debt right away? It’s one of the types of debt that impacts your credit the least, second to mortgage debt. At 31, I accept the fact that my student loan debt won’t be paid off until I’m 45. I have 24k left, at 2.625 interest rate. If I were you, I’d be more focused on paying off credit card and auto loan debt – these types of debt impact your credit score and availability much more than student loan debt does. One note – if you’re in the US, you can’t deduct student loan interest until 5 years after your loan enters repayment.

  78. Jenny July 5th, 2010

    Debt is making my life extremely miserable right now. I made some mistakes in my life that I will continue to pay for. That is why I find this article very motivating and helpful. There are little things in my life that I can change that will make it soo much less stressful. The stress just makes me want to just tuck it all away in a black hole somewhere to try to ignore it. But by doing that you’re only adding more stress by worrying about the consequences.
    I think its time to think about downsizing for a couple of years..Maybe by the time I’m done or at least halfway finished I will be able to breath again.
    Again Thanks for the article. I already know it will benefit me in a huge way.

  79. J.C. July 5th, 2010

    See the thing is with most of these people is that they can’t live without their daily routines that are costing them thousands and thousands of dollars. Most people dont need half the crap they have or half the services they think they need. Unless you are am on call at a job you really dont need a damn cell phone. At the very least all you need is basic service. Stop the BS texting, app usage, and long costly conversations that can wait until your minutes are free.
    If you eat out all the time or just sometimes at expensive places then you don’t have the right to complain about your debt. Especially if its all being charged to your credit cards.
    We need to stop living lives that we know we can’t afford in the first place. It will allow us to live the lives that we can without soo much stress. Think about it if you have to put it on a credit card you cant afford it. So dont buy it.
    Saving just a little at a time can do so much. It can allow you to have that emergency money you need to fix the car or pay that unexpected bill. If you’re lucky enough to avoid those circumstances then you can use the money for well deserved vacations.
    But until we are debt free we need to live the life that we can pay for without making that number increase.

    This is just my perspective. I enjoyed your article Thanks for sharing.

  80. somalo July 5th, 2010

    Great posts, just found your blog through the network, I graduated back on 2005 and left Uni with NO DEPTS!! Yes that’s right no student loan crap. How? Simple never asked a loan although I been giving all the forms and stuff I refuse to apply, I pay my tuition fee cash which was about 1300 pound a year and worked weekend 30hrs to pay of my expenses (books, transport, and small fees No fun and I only use to do my shopping sale time before summer for winter clothing and after chrisms sale for summer stuff. I Got a job after 3months of my graduation and work as a public service sector. I go holiday 4 times a year and manage my life quit well balance between. I will share with your blog some of fun and carefree minded friends of mine. Average of my flow student left Uni.
    With paper and staggering 20,000 pound starling on their neck. My advice is I don’t know about North Americans but in UK student I will say U DO NOT NEED STUDENT LOAN TRAP, DON TAKED. Suffer few years and enjoy LONG after….one more to add, Goof question Kelsey, must of the blogers write like they all are CEOs maybe they are hmmm. Good luck my friend. Thanks again FOXE

  81. James July 5th, 2010

    http://www.stockrocker.blogspot.com

    There are a few ways to pay off these loans if one is willing to pursue them. SLRP, student loan repayment plan in some federal jobs. They pay up to $10K per year for each complete year you are with a governmental agency. Like Social Security Administration, US Forest Service, Army Corps of Engineers. Be aware too these mentioned above start at the GS-5 level which any bachelor’s is basically qualifying. If you’re young working one’s way up is pretty easy. Also, these $10K per year payouts have to be reported to the IRS so you pay taxes on them as income.

    Another way I believe is service with the Job Corps.

    One more way is by a job as a teacher and the incentives they offer.

    Still yet another way is [unfortunately] if one becomes disabled.

    I saw someone had an $89K loan, mine is $76K. I was irresponsible, hard to admit, but it’s true. That’s why mine got so high.

  82. James July 5th, 2010

    To clear up any questions. One must take a job with the federal gov’t which offers Student Loan Repayment. Not all of them do.

    Best thing is not to borrow more than you need.

  83. Marc July 5th, 2010

    Get a roommate to help with rent/bills, carpool, ride bike to and from work to save gas AND get exercise simultaneously, pack your lunch, split a wholesale club membership with someone, work at a university and get full tuition waiver…

  84. Kat July 5th, 2010

    Interesting subject, interesting comments. Many of us have a lot in common. The one person who said in order to get the higher paying job, one must pursue more education then falling into even greater school loan debt in the process makes a good point. I know this all too well having pursued a graduate degree and now a law degree which will have me facing a 6-figure loan debt upon graduation. With that said, I plan to pay as much extra as possible each month and to apply annual bonuses (as much as possible) to the bill. With this plan, my loans will hopefully be paid off in a fraction of the time allotted.

    Also… word of wisdom for those newly grads just getting that first job… you can also negotiate as part of your compensation package dollars to pay off the school loans. It never hurts to ask. After all, you don’t get what you don’t ask for. ;)

    Cheers!

  85. J. July 6th, 2010

    What are the consequences, really, specifically, IF I don’t pay at all?

    I see lots of info on the net about getting a student loan, paying off your student loan, reducing your student loan, etc. but nothing really about the darker side of things ie:

    1. What will happen if you don’t pay off your loan
    2. What happens to your student loan once you die
    3. What happens to your student loan once you move and live overseas permanently
    4. Ways and/or tips on how you can get your loan forgiven

    Maybe I’ll just find out the hard way…. and then maybe I can blog about it, except for #2. lol :D

    yeah, yeah, I know all you haters are gonna start attacking me now. And yeah, you’re better than me.
    Any info on the 4 points I mentioned?

  86. priscilla July 6th, 2010

    The average student debt is only 19K??? Wow, that’s nothing! Graduate school is very different from that! Try 150K of student loans in Canada and 250K in the US.

  87. Ma July 6th, 2010

    Thanks for your great advice. We have been saying the exact same thing to our adult children: pay down your debts, defer unnecessary purchases, live frugally, invest in an RRSP…but do they listen to their parents? Eh? Eh? Maybe they will listen to you.

  88. Scott July 6th, 2010

    I think this article presents a pretty unrealistic story for most graduating students. First, in the current economy, most are lucky to get a job interview or the even more coveted job offer. Negotiate a higher salary for an entry level position with no real world experience in the field? HA. I’m glad to see you a) netted $17,000 in 6 months b) did this while eating and paying rent c) saving for your retirement. Your article should really be titled how to pay off debt when you are making much more money than anyone else your age. Most would be lucky to pay down that kind of debt in 5 years.

  89. Kelsey July 6th, 2010

    I agree with you there, Scott. I’ve been sending out 4-5 resumes per day for a month and a half, and have only gotten two responses – both that the position had already been filled. My resume is a good one, but I don’t have much experience, and in this economy, it’s tough enough to get a job offer, much less one that you could risk negotiating! And I can’t imagine what her salary must have been. The best jobs I’ve been able to find that I’m even remotely qualified for pay, at most, in the upper $20s to lower $30s. Most are lower than that. Especially if you’re living in a major city, it’s just not really possible to save the kind of cash that she talks about in this post.

  90. judy July 6th, 2010

    In Canada, student loan debt can’t be included for discharge under a bankruptcy during the ten years after graduation (it used to be two years, but they quietly changed the law back in the late ’90s and the constitutional challenge to the legislation failed). But consumer debt is different. And if you happen to have access to consumer credit (credit cards, line of credit at a bank) you can “flip” your debt by paying down the loans or a big portion of the loans with consumer credit. So if you happen to not be one of those who is able to negotiate a higher salary, or have parents or a spouse who is happy to support you, or have loads of savings or a pile of money that someone has bequeathed to you, and your debts are more than your yearly salary, and you have access to sufficient credit to cover all or a significant chunk of your student loans (and any other consumer debt), then bankruptcy after flipping the debt might be a good option for you. There are some costs to filing, and consequences for having a bankruptcy on your credit report for 7 years after the bankruptcy year. But if your debt is crippling you and you have the credit available, I’d say look into it and plan it carefully, and after you’ve flipped the debt, make an appointment with a credit counsellor for a referral to a friendly trustee in bankruptcy. And be sure to keep all your records organized and complete – banks and student loan centres don’t tend to communicate well with one another, and you will want to have proof that your loan payments were made and that the resulting credit debt was discharged under your bankruptcy.

  91. John July 6th, 2010

    Hi Stacey (from Ontario), Just a thought, have you enrolled with a temp agency as a contractor? This could help you a bit to find a better paying Admin Job in Ontario. Google temp agencies in Ontario, especially those with contracts with the Governments and large businesses (e.g. IBM, Royal Bank, etc.,). You should be able to make a few more hundred dollars per month immediately, and you will have the opportunity to apply for permanent jobs once you are inside. Good Luck.

  92. Asian15 July 7th, 2010

    Hi. what a great share dear! thanks a lot . I’m Glad read this subject make me not jump to another problem. Thanks GOD!

  93. judy July 7th, 2010

    Hey luluwins, that some great advice you gave: “live with your parents…find a boyfriend to pay all entertainment, fun, and food.” But what advice do you have for those of us who can’t/won’t freeload off our parents and don’t want to behave like gold-digging whores?

  94. Daniel July 7th, 2010

    Nice article, but I have to agree with several people in that most new grads aren’t going to start at high salaries like the author. I’m in very much a similar boat to Kelsey in that the starting pays I’ve been looking at are at best around mid-$20,000…and I graduated in 2000 and have been looking for any job I can find. I’ve been forced to take “seasonal” jobs to keep some level of experience going, but those jobs are really starting to get old…not to mention taking a huge toll on my marriage.

    I currently have a little over $20,000 in school loans. I’ve used up all of my deferments and have used multiple forebearances. A divorce may be in my future, in which case a job at Wal-Mart will probably be where I end up…at least for a while until I can get some money saved up… I don’t know how I’m ever going to get this loan payed off.

    I’d love to go back to school and get an advanced degree, but will never borrow money again. I truly feel that I went to college in order to learn a hobby…not a career…

    BTW, I’m 40 years old…

  95. Lao R. July 11th, 2010

    Well, this is for J., I found out the hard way what would happen if you dont pay your loans, 1.) they garnish your wages here in Florida is about 15%, I dont know if its the same for other states, 2.) they take away your income taxes until the loan is paid off. To them if the payment is Involuntarily, they do 1 & 2; so its better to voluntarily pay your loans, I didnt want to lose my wages or income tax returns. And as for Kelsey, i am with you it IS extremely difficult these days, though I cant offer any advice all I can say is hang in there, and just pay what you can for now, eight years ago i wasnt able to pay ANY amount, and though i may owe more now i am grateful that i have gotten to the point that i can, its a struggle, but i can do it. thats what you have to focus on – your future. if its now today, you WILL be able to pay off those loans. If no one hires you now, they will. just dont drive yourself nuts by comparing your situation to someone else’s, you will get there. focus on what you have now, the positive, on what you ARE doing, on what you ARE making and you will see before you know it, you’ll have a job with a good income and paying those loans.

  96. Nicky July 22nd, 2010

    It is finding that viable payin gjob to susutain yourself on the basic needs of life and get rid if that debt. As fro RRSP’s, I would invest in something else as one is taxed to the hilt when cshing them in. They too are a cash grab and you lose at leats one third in taxes.

  97. Mac July 27th, 2010

    Yeah… the author definitely has some good points here…. but unless YOU graduated as a Petroleum Engineer and worked a crap load of overtime; this does not apply. 17K in 6 months is $2833/month at 0% interest. Most people with degrees will not make that much monthly even after 5 years of experience. (For those of you who like to look at actual figures, not vague bullshit like “live like a student… make tons of cash, then VOILA! NO DEBT!”).
    Most people I talk to that have been out of school for 3-5 years are still deep in debt, and still live with 2-3 other people. They don’t live lavish lifestyles or even have cars. They graduated with little debt because they worked the whole time and ate nothing but oatmeal and pasta, like myself. They started with salaries between 52 and 70K (which is high end for new graduates, according to any study). They still have trouble paying down debt, and they certainly cannot afford to pay off $2833 a month.

    My guess is the author graduated as a Petroleum or *high end* chemical engineer, or a veterinarian, or a lawyer (and if so, she must have worked the whole time during school so as not to build so much debt while going). Then she somehow convinced an employer to pay her more than her peers with no experience in the field; in a shitty economy. Then she managed to find someone stupid enough to pay her inexperienced self for side jobs. Either that or she had established another viable income before any of this happened.

    So Kudos to you author, for being very fortunate in so many ways. For 99% of your readership, the headline is only good for sensationalism, and is either one of two things: shy on data of how she ACTUALLY made this work, or completely false. So maybe next time put some realistic figures up. And if this $17K is actually real, why don’t you detail EXACTLY what you did.

    For everyone else, expect to live like a super miser and be in debt for a very long time. It won’t matter what principles you abide by, it won’t be all sunshine and roses.
    If you’re like me, you went to school with very little savings from summer jobs, you worked your way through school, you couldn’t live with your parents and the only help you had was from the bank at 7% (+) interest. And if you slugged through crappy jobs to make it to a decent salary like I did, you know that sometimes regardless of how much or how hard you work, opportunity will not always be there. I’ll say this even though I make almost double what most people do my age, and 20% more than most in my field. I still have debt myself, and I’ve been eating oatmeal and the same damned lunch every day for 5 years.
    Stay real everyone.

  98. Danielle July 27th, 2010

    I have to agree with Mac. There have been a number of articles similar to this one that have cropped up over the years that claim that you can pull yourself out of debt by living like a pauper. And as much as I would like to pull myself out of my student debt within a reasonable time it just doesn’t seem likely. Unless one plans on putting any ideas of getting married, having at least one decent used car (because if your like me taking the bus everywhere becomes increasingly unreliable and impractical), and owning your own home, than to live like a pauper for 5-10 years is not going to get anyone anywhere. It’s like you are essentially putting your life on hold to pay on a debt that is not bad debt to begin with. Especially if your debt is in the 30,000-60,000 dollar range there is no feasible way to pay all that debt off in a year or two, I mean let’s be realistic. I always found it funny when I read how the author was able to find a job that paid what she wanted. I have 2 more years to go in school and I can only wish that during these crappy economic times I can only be so lucky to find a job that can pay what I want.

    The only thing I can suggest to those who may still be in school and working on their degree is to do internships if possible. Get some real world experience because more often than not, a stand alone degree without any experience is not enough. Get at least a few professors on your side who would be willing to be a reference for you. So when you do finally go out into the workforce you have someone who can vouch for your academic credentials and your work ethics. I know people say work during school but IF you can fit in at least a day or so of interning somewhere you may be better off. Because if, for example, your a biology major and most of the jobs you worked are small retail jobs it will only be that much harder to find a career in your field. Good luck!

  99. Teenycakes August 12th, 2010

    Well, here goes, from an old fuddy -duddy.

    I graduated in 1999 with $20K in debt. I worked almost full time during school. When I graduated, unemployment in my area was 19%. Rather than go with temp agencies, I contracted myself as an admin — sure not really in my field, but I was paying the bills. I lived at home, or with relatives and paid fairly low rent (about 80% of market).

    When necessary, I used forbearance and deferrment. Please note that my loans were taken out before the current benefits, so I do not qualify for teacher loan breaks, half time deferrment or any other nice perks put in place by Clinton, sadly. I am back in school now, and taking out loans for a master’s degree. Which is an excellent way to ride out a recession BTW.

    Keys: pay all your bills, call and negotiate if you are having trouble, sometimes they can bend the rules. Sell stuff you aren’t using on a regular basis and put the extra towards loans, if you are thinking of going back to school consider if you have a half time deferment — it may make sense to stick to taking 6 credits if you are having trouble finding a job, if you have high loan amounts. And the extra learning and networking won’t hurt!

  100. JENNIFER August 13th, 2010

    @STACEY AND KELSEY, QUIT YOUR WHINING AND MOVE IN TOGETHER, YOU DESERVE EACH OTHER. ON THAT TOPIC, GET A ROOM-MATE AND SHARE YOUR CHEAP $750 RENT, OR BETTER YET, MOVE BACK IN WITH YOUR PARENTS SINCE YOU STILL BEHAVE LIKE A CHILD. THANK YOU.

  101. JENNIFER August 13th, 2010

    AND ALSO @STACEY, IF YOU ARE TAKING THE TIME DURING THE WEEK AFTER WORK TO GO TO THE GYM TO EXERCISE, THEN YOU ARE WASTING PRECIOUS MONEY ON THE MEMBERSHIP. INSTEAD, WALK DOGS FOR EXTRA MONEY AFTER WORK (FREE EXERCISE) OR BABYSIT AFTER WORK WHERE YOU CAN ALSO GET PAID WHILE DOING FREE EXERCISES. AS STEF SAYS, GET CREATIVE. NOW I KNOW WHY STEF HAS A GOOD PAYING JOB AND CAN SAVE SO MUCH MONEY………….SHE IS CREATIVE!!!!!!!!!!!!!! YOU AND KELSEY COULD STAND TO LEARN SOMETHING FROM STEF.

  102. Stacey August 13th, 2010

    Ok – Jennifer.. who is acting like a child? re-think your statement when you speak to people like that.
    As a matter of fact, I’ve quit my gym membership and I’m exercising from home now. On note of your point in regards to getting exercising from babysitting and walking the dog… there is only so much exercise you can get from that – not adequate for optimum health. However, this is not the topic being discussed here. Thats all i’m going to comment on your post.
    In regards to other’s posts: There are some really good points made and great ideas. I’ve learned lately though that you just have to keep paying as much as you can whenever you can (income tax, extra income if that happens, ect). and just be aware in general of what you spend and think twice, and three times before you buy something you probably don’t need. And with the money you would have spent on that item – put it towards the debt. At the same time, you really can’t spend the rest of your life stressing about the debt that has been created or you’ll waste your life away; just do your best to pay off as much as you can and still enjoy your life. I know I can’t sit here and wait for my School Loan to be paid off before I do things I want to do in life (travel, ect). But, I save up for them – even if its a slow process. Life is simply too short and you never know if youll die tomorrow (and I know its been said 100 times) or even become crippled. So just be responsible and enjoy it to the fullest!

  103. Kelsey August 13th, 2010

    @Jennifer: For one thing, learn about the internet before you go posting comments – all caps generally implies yelling, which I doubt was your intention.

    As for the $750 rent – that is *with* a roommate. Clearly, you have never lived in one of the major east coast cities. The unsplit rent, if I were to pay the whole thing, would be $1550, and this is a cheap apartment for this area.

  104. Sarah Bellum August 17th, 2010

    This is a message to all those parents out there (and future parents) who are reading about our kids’ student loans.

    I’m 67 now and can look back on what actually worked.

    When our kids were very young, they got swimming lessons at the local pool and joined the swim club in the summer (no indoor pools in our small town). When they were old enough, they took all the courses to qualify as lifeguards and swimming teachers. (We figured that teenagers can make more money as lifeguards and swimming instructors than they can at minimum wage jobs.) By the time our kids were of working age, they made a good wage (union jobs). The eldest worked her way through UBC as a lifeguard at the university pool. By her senior year, she had enough seniority to make a good wage and choose her shifts. She also taught swimming at a private school during the summer. By the time she graduated, she hated the smell of chlorine . . . but no student loans.

    Important: She didn’t overdo her work hours because she had to keep her grades up. She noticed that students who had to work too much often didn’t take a full course load. University can drag out too long that way, and not be cost effective.

    They other thing is: Sure, it’s great for kids to work their way through university. I did. I worked 30/hours a week my senior year and was a dorm counselor for free rent. Later, I was the only student teacher who was working weekends as well as doing my practicum. But when I look back on all that, I regret it.

    My parents didn’t help me because they thought I needed to develop independence. But I also couldn’t keep my grades high enough to be competitive in a pre-med program and had to alter my dreams.

    So now I believe this: Don’t wait till you die to pass along a share of your net worth, even if you have to work longer yourself. There are two times when our kids need help big time: when they’re in post-secondary education, and when they buy their first place. We can make an airtight case about how they need to learn the value of a dollar, be independent, etc. Trust me. They will still learn all that! Life has plenty of lessons in those departments. This won’t feel like an entitlement program because you’ve raised your child to have job skills and to save. You’ve taught them how to write a resume and coached them through their first job interviews.

    You have to cart them around to baseball, football, soccer, dance, whatever, when they’re too young to drive. Why not drive them to swimming lessons and lifeguard courses?

    These days, you as a parent or grandparent can also help the kids get started in an online business of their own when they’re still teenagers. By the time they’re in university, they’ll have that as a side income.

    As a parent, you have the foresight to equip them to avoid student loans later on. For the kids, swimming and an online business is just “fun.” But you know it’s part of a long range plan. If you can put money in an RESP, great. That will help.

    Gift them with the fishing pole and they’ll share the fish with you some day.

  105. Erika Barkley August 26th, 2010

    Best tip I ever got from a friend was to pay “something” on my student loan EVERY week. Say if your payment is $200 a month, split it up to $50 a week. Most student loans acrue interest daily and the interest amount is based on the time between payments. I gurantee if you make a $10 payment this week and a $100 payment next week, you will see most of it (depending on the amount of your total loan) go towards principal. This is the quickest way to pay it back…trust me!

  106. Terra September 9th, 2010

    Thanks for the advice Erika.
    I’m going to have to face that loan really soon (and its a big one, as I have been in school forever) and any advice is good advice.
    What a slew of comments here. Its really great to read them all and see so many different ways of looking at the problem.

    If I ever pay off this debt I think I could do just about anything at all.

  107. Paul T October 11th, 2010

    Sounds like you’ve got a good head on your shoulders and all valuable tips. The thing that is getting most folks nowadays is the lack of jobs or low paying jobs. Otherwise it is sound advice.

  108. Devi October 28th, 2010

    Why would you want to pay them off? The interest is 3% on most, no higher than 6%. Any interest you pay on them you get back when you file your taxes as a return. That money you can put right back on the loan. It looks great on your credit, federal school loans in good standing with no defaults that is, and if after 25 years the amount is not paid off the government writes it off and you owe nothing!

  109. Stef November 5th, 2010

    @Devi

    A very “strange” way to look at debt. You should be aware that LOW interest rates won’t last forever: rates can only go up. What is the portion of the interest payment that you can claim on your income tax? Also, when you borrow money, trailing a long-term debt that is not mortgage related (or backed by ‘solid’ asset) is NOT considered good money management and does not look good on your balance sheet. I would really like to see the math justifying such a ‘devious’ scheme ;)

    Good luck!

  110. Autumn November 10th, 2010

    Eeeek! Art teacher in trouble! I make 30g a year, but I have 51g in student loans… Over half of my check goes out to bills, and the other third goes to surviving. I can barely make ends meet, and I live pretty basic. What do I do to get out of this debt and be able to live a less stressed and loan free life?!?!

  111. Jay November 10th, 2010

    Autum,

    You might want to look at http://www.finaid.org/loans/publicservice.phtml to find out about a fairly new 10-year loan forgiveness program from the federal government for any public service employment such as teaching, social work, non-profit, police, library, fire, etc. During the 10 years you make a reduced payment and at the end you complete the required paperwork and any remaining interest and principal is forgiven. They even have a toll free number at the website if you have questions. So definitely give this a look in case some of the other programs (reduced payments, forebearance, etc.) do not work for you.

  112. hustlehard February 12th, 2011

    17g is nothing. i still owe 50k.

  113. Natasha February 19th, 2011

    How about by not accruing student debt in the first place? I am lucky to live in a big city with three great universities. Instead of living on campus (which would have been much more fun), I lived at home with my parents in the ‘burbs and commuted to school. I worked full-time during the summers, and part-time during the school year, and earned more than enough to cover tuition. I studied my butt off and won scholarships as well. Student debt? Zero.

  114. Lao March 9th, 2011

    Hello, I have $85k in student loans, though I am grateful I have a good job that makes it possible for me to make my payments, however, one of the loans is for $7490, I’d like to start attacking this loan but of course i have no clue, the payment for this particular loan is $85, but I ususally send $185 in an effort that the difference will be applied to the prinicipal therefore, lowering my loan balance. This is my question, is this enough – for now, and should the extra payments be made to the principal or the interest of the loan? And what else can I do to lower and eventually pay this loan off even faster? Thanks

  115. O June 4th, 2011

    You guys have it easy. My wife has 200k in student loans :(

  116. brad June 4th, 2011

    Your wife has 200k in student loans? What the hell was she doing to accumulate that kind of debt? Can she even make the minimum payments? I might consider suicide or moving out of the country at that point.

  117. e June 14th, 2011

    at least I am not the only one I have about 11k in debt and need to get this off my back asap! going to have to cut back drastically!

  118. Jeremy July 11th, 2011

    This is a great post and it is POSSIBLE. To the lady called Kelsey. Please stop making excuses for debt. Accept that you have debt and find a way to pay it. One of the reason people in our country are loaded in debit card debt is because they are all trying to find ways to excuse themselves out of it! Be creative. Work 3 jobs if you have to but always remember, the credit cards want their money back. Factor in the interest and your debt will turn from $6K to $8K ALWAYS remember this. Maybe it will motivate you to even work at McDonalds and keep whining about your debt!

  119. dee July 11th, 2011

    Just curious Kerry what was your major and where did you graduate from?

  120. Kerry July 11th, 2011

    @Dee I have one and a half degrees. The half degree was the expensive one that put me into debt.
    First degree: Journalism, Carleton University.
    Second degree (partial): Computer Science, University of British Columbia.

  121. dee July 11th, 2011

    @kerry
    oh, I see. Is the cost of education in Canada any better than
    in America?

  122. Kerry July 11th, 2011

    @Dee Generally, tuition is far less in Canada than in the USA. There are programs and schools in Canada that cost dearly though.

  123. dee July 11th, 2011

    Just curious do most private loans have early payoff penalties?

  124. Kerry July 11th, 2011

    @Dee I can’t speak on the nitty gritty details of most private loans. :) I always recommend that those with loans should (and must) read the fine print before signing on the dotted line. If there are early pay-off penalties, it makes good financial sense to calculate the cost of carrying the loan VS. paying if off sooner with a penalty. I had no early payoff penalty on any of my loans.

  125. Kio July 19th, 2011

    @Dee – Another note about Canadian vs. American education. The loans in the US work differently from those in Canada, which can also make higher ed more expensive in the US.

    Here is my 2 cents about US loans. Most private loans in the US start interest gaining the moment you take the money out, even though you don’t have to start paying back on the loan until 6 months after graduating. Even most US Governmental loans also start interest gaining the moment you take money out (again, with payback starting 6 months from graduation).

    Some US Governmental loans wait on charging interest until after graduation. These are called “Subsidized Stafford Loans”, and you can only qualify them if you are deemed in financial need. There is also a cap for how much money you get in “subsidized” loans from the government. I think its like $3K a year; definitely not enough to be covering your full costs.

    As Kerry mentions above, reading the fine print on the loan is important! Many colleagues of mine did not realize that interest was already gaining on their loans while they were in school. :(

    I qualified partially for subsidized loans, but most of my loans were unsubsidized (ie, gaining interest from day 1). Every summer I would make a small payment on each loan. Even if I couldn’t pay off all the interest that had gained during the school year, every little bit helped! In the end, I was able to graduate owing pretty close to what I had originally taken out in loans, which felt great. Well, maybe not great…. but a lot better than it could have felt! :)

    Compound interest SUCKS, so do anything you can to avoid it.

  126. Bryon August 22nd, 2011

    So I went to college and graduated. Hmmmm what an accomplishment working full time supporting my family and attempting to get more knowledge so I could be the manager of our Safety program. Ok that is not working out so well, I have been demoted because I was attempting to do it all my sel. The people who were working for me were useless they were not team players and even though I would assign them work I would have to go out and complete it because they would not do the work. I did not learn this in school, I did learn how to write but the skills I needed most well I did not get. I will be paying about 700.00 dollars a month for my school and it seems as though Salley Mae is one of the most unorganized loan organization there is. They are charging me 30,000 dollars for books, I never figured that the books would cost me more than my degree. I will succeed in spite of all of the costs which I have encountered. Oh and by the way if your work says they will pay for your school make sure you understand every thing surrounding this….I did not so here I am paying back all of my loans… anyone have any ideas how to reduce the amount of payments?

  127. 12 years in student debt August 27th, 2011

    I wish I had of found this blog in 1999! It’s been a long 12 years and I’m still $13,000 in student debt. I will be the first to admit that I haven’t made the wisest choices (bought a car right after graduation, use credit cards, etc.) however, I have lived frugally for 12 years in regards to things like dining out, travel, etc. I simply don’t do those things. In addition, I also don’t get any coffee let alone a $5 dollar coffee. I have lived this way for 12 years and I still have debt. To try to resolve the issue of not having enough money, I had a job interview yesterday (a job as a college instructor which I thought would typically pay more than what I make as an administrative assistant) and found out during the interview that it pays less than half of what I make now. What gives? Sorry, I’m just frustrated. Well done to those of you who made wiser choices than I did. I wish my 50K/year streched far enough to allow me to make more than the minimum payment. Rent, car and bills cost me 2500 per month (I live in a city and prefer not to live in a neighbourhood where I could be stabbed or shot when getting out of my car), then the 300 loan payment leaves me with about 90 dollars left over(calculating actual funds (net income), after taxes) and my cats need food, too…let me tell you, it’s not fun. If you can do what the poster of this blog did, you’ll be way better off. Learn what NOT to do from me :)

  128. Loo2 September 6th, 2011

    I truly sympathize with people who are not being adequately paid. Been there. It doesn’t allow you to have a life. But neither does being in debt forever.
    Having read everyone’s comments, I think the person who is income-deficient has to ask themselves some very basic and unpleasant questions. I say this not to lecture, but because thee is no way around it.
    Are you prepared to accept being in debt forever? Have you resigned yourself to this? If so, then there isn’t much point in being involved in this blog.
    If you are not prepared to accept this, then you have two choices. Either you find some way to declare bankruptcy or you find some way to get more money with which to pay down your debt. It really is that simple, and most people can do something to improve their situation. It will involve unpleasant and extreme measures. But the alternative is to be in debt forever and never have a life, so there’s your choice.
    If you want to solve the problem, then you need to be willing to change EVERYTHING else about your life, including changing careers. You will absolutely have to be creative, question not just every penny you spend but everything you do, because everything about your life has financial implications, sooner or later, for better or worse. Every penny really does count.

    It isn’t just about the coffee you buy or the cable charges etc, things we all know we could do without if we had to. It is also about much more basic things.

    So, here are some of my more extreme ideas.

    Go to the library and research what would be a cheaper part of the country in which to live, considering ALL costs and job possibilities, whether you know anyone there with whom you could live; then move there, taking very little with you.
    Do not rent any space to live in. There are alternatives: couch surfing, parking a van at Walmart parking lots, house sitting, living with mom, living with someone else in exchange for babysitting/cooking/cleaning (things you might already be doing). When I was in grad school I knew a student who had all his stuff in his vehicle; at night he slept in the university buildings, finding hidden spaces and making friends with the cleaning staff who let him do it. I’m not sure what he did about food, but he graduated debt-free.
    Change your mindset. Don’t allow yourself to think it can’t be done. Read every book on the library on frugal living, and request others on interlibrary loan, which is usually free. Most people who live really frugally are creative thinkers. Become one.

    Rent is usually the biggest $ guzzler, and also includes utilities. No apt, no utilities! There will be some minimal alternative costs to maintain a rent-free existence; evaluate each one to see if it is really essential to life. Use public washrooms to keep clean – colleges are really good for this. Join freecycle. Collect returnable bottles etc while taking a walk for exercise – don’t hesitate to ask home-owners if you can have their bottles, as most people don’t like the hassle of returning them. Joining a gym etc is totally out of the question and unnecessary. Develop a detailed plan and present it to any friends and family who may be able to help you out in some way. Explain your goals and how you are going to sacrifice in order to reach them. I guarantee they will be impressed, if you follow a stringent plan, and will do what they can to help you. You may, for example, need a car loan if you are going to essentially live in a vehicle, which you can easily pay back from the rent money you are not spending, as a short term loan; and then you at least have a vehicle to show for your money.

    There are a zillion things you can actually do, but the main thing is to set your mind on the idea that you are going to solve the problem by any means necessary. After that, it’s not so hard.

  129. Kim Ngo September 29th, 2011

    Great post by everyone, I have a BS degree in computer science from a university. After graduation I was I was unable to find works in my fields of study. So I settle for a customer service position that was 2001. I decided to go back to school (ITT) to get another degree it was the stupidest decision that I ever made. My student loan was about 6K with the university but my student loan with ITT was 12K the 2 combine with all the interest, forbearance, and fee has pushed my loan to 20K. I have been at my current position for 5 years now as an analyst and makes 58K a year so I make a pretty healthy living but I’m always broke and not much left to pay student loan. I have one car payment $277.00 a month, a cell phone payment $70.00 month; I have no mortgage of my own. My wife and I move into my parents’ house to help pay the mortgage. Almost all of my pay check goes to paying the mortgage leaving with no money left for anything else. What worst is that its interest only payment. That house will never be their or ours when my parents are gone. My dad is 77 and mom is 74 both are in poor health and both are on SSI with a combine income of about $900.00 a month. There is absolutely no way for them to pay on their 600K home. They can’t sell the house because of the market plus at their age and statues they can’t qualify for a loan on a new home. I am very frugal, downright cheap. I do not go out to eat always bring lunch to work. We don’t use or even have a credit card. I still live like a student dirt poor, no Starbucks latte, no going out, no movie, nothing. The only thing that my wife do is fish which cost nothing and at the same time we catch dinner. My wife was let go 2 years ago from her work and is unemployed. She not qualifies for unemployment because she is in school, yet another student loan and more debt.
    I agree yes pay of your debt as fast as possible, time and interest is against you. The longer you wait the bigger hole you will dig yourself in. Everyone situation is different; with me do I pay student loan or pay my parents mortgage. There is no question which I will choose do. I don’t regret my education it was worth it. It separates me from being an office worker from digging ditch. My mistake was ITT, I should have wait and look for better job with the degree that I already have. Than my loan would not be so much.

  130. Kdizz October 19th, 2011

    Hey, I love this blog! I read it some time ago when I first graduated and it boosted me a lot. It’s a year later and I finally got a job, so now I can actually take some of these tips to heart! I’ve been saving and I will be making my first loan payment soon. Thanks for the great article!

  131. Sarah October 24th, 2011

    I came out owing over 50,000 dollars after 2 degrees. I was in denial to pay this off. I do recommend talking to the bank where you rec’d your provincial student loan and get a debt reduction, this has helped me greatly.
    I still owe around 34,000 and I’m going to save as much as I can to put large lump sums on it, credit card is first priority right now. Luckily student loan interest is low!

  132. hokeydino October 27th, 2011

    I have $35 in student loans. I know it’s best to pay off the student loans ASAP so that less interest is accrued, but I also want to save up for traveling for work. What I have decided to do is put money towards 1 year’s worth of student loan payments (for me, that’s around $5000) so that when I do move overseas, I will have money in the bank to pay it off.

    I’m doing the same thing with the T2202A forms. I think I’ve accumulated approx $40,000 in tax credits from this, which means that I will receive a lump sum refund from all the tax deducted from the year before. I actually can’t wait for tax season in March so that I can get my refund back and apply it to my student loans!

  133. bluebrown December 16th, 2011

    I think it depends on your major/job and where you live. I want to move to a big city, but the only way I’m going to pay back my loans is to live somewhere cheap :(

  134. kiwi4478 December 28th, 2011

    I think it is also important to look at all of your debt and figure out what is best to pay down first (i.e. highest interest rate). My husband bought a house himself before we got married and this had a higher interest rate than my loans and thus we made higher payments on this at the time. However now with the economy the way it is we are able to refinance our house from a 30 yr mortgage to a 15 year mortgage and only $100 more minimum payment a month which we can easily swing as we were paying more than that a month on the mortgage. Now my student loan payments have a higher interest rate than the mortage and thus we can use the extra money to pay on them now. We are also considering taking out a higher loan than we need against the house due to lower interest rate and pay that towards the student loan, especially since we bought a foreclosure and have been paying it down faster than min payments and therefore owe quite less than what it is worth. I agree with comments that a house/condo isn’t always a bad step to make after graduation as it can have benefits and make a great investment. We also both bought certifed used almost like new cars and paid them off all ready ($32,000). Focusing on decreasing debt is important. For those who seem to want to know my husband and I together make about $85,000 a year together currently although closer to $100,000 when I was working full time the past couple of years. Granted he did not graduate with student loans and I have $23,000 left from $31,000 original student loan amt after being out of school 3 years. I also worked for a government agency for a while and got part of my Perkins loan forgiven for 2 years of service. We don’t put more on our credit cards than we have money to pay for from our checking. But we use the credit cards for reward points and cash back. So we also choose to not have credit card debt. We now owe about $123,000 between my loans and our house and our house is worth about $160,000-$170,000. Things we do:
    1. Don’t get yourself in credit card debt.
    2. My husband pays the mortgage and all the bills for the house. I use my income for the groceries, our dogs and my own gas for the car. Thus we both are able to put money in savings a month, especially myself. Mainly living off of one person’s income when there are 2 incomes in a household is a great way to pay off debt faster.
    3. Don’t live outside of your means…. live less than your means!
    4. Don’t forget retirement and life insurance investments!
    5. Don’t forget to save for a rainy day, we keep a certain amt in savings at all times as well.
    6. Shop at Goodwill and clearance racks… buy generic brands of pharmacy and food items. I have bought brand new clothes from Goodwill and new furniture from Target at Goodwill for cheaper! Cut back where you can.
    7. We don’t eat out much at all… cooking for yourself, making your own coffee… way cheaper!
    8. If you are good at stocks… invest. My husband has made money this way and we usually don’t pull from it as we mean it for long term investment but we can if we need.
    9. Budget, budget, budget. Set an amt you are going to put in savings for loan payments or pay more on your loans every paycheck. Sometimes you might not be able to meet the goal but always try whenever possible to keep that goal every paycheck.
    10. Splurge every once in awhile… if you never let yourself have something you want or go somewhere you want every now and again it will all just seem stressful.

  135. Joe December 31st, 2011

    You think 17k is a lot? I graduated with 70k in debt. Luckily, grad school tuition will be free, but I’ll be accruing about 2500 per year in interest while in grad school.

  136. Kendal January 1st, 2012

    Great article and great tips! I am in about $27000 in debt including student loans and credit cards. I feel like im drowning but I see light at the end of the tunnel. I am currently in college, but I will be done by August. It has been a rough go as I live with my boyfriend and we split the costs 50/50. It is hard to see people that get everything paid for them (including education) and just splurge their money on whatever they want. I keep in mind that once I can pay off all my debt and can earn more money, I will take solace in the fact knowing that I will better know the value of a dollar :)

  137. Heather January 6th, 2012

    The only way I can see this blogger paying off that much debt in such a little time is if they lived with their parents for free. Even then, as Jay so eloquently pointed out, it’s hard to believe it was able to be done in 6 months.

    I graduated from college with $14,500 in student loan debt. My Junior year in college, I bought a brand new car for $16,500. I worked summers, plus I had a job on campus, and that helped me out before I began my career.

    I fortunately got a full-time job three months after graduating. I lived at my parents house for free for the first few months. During that time, I decided to pay minimum payments to my student loan, since my car loan had a significantly higher interest rate. So, I paid massive amounts (talking $500-$1000) to my car loan until moving out of my parents house. I kept paying much more to my car loan and minimum payments to my student loan until I fully paid off my car (I paid my car off in less than 4 years on a 6-year loan).

    After that, I continued paying minimum payments to my student loan, because I knew that, after teaching for 5 years, I would be able to apply for a loan forgiveness. Unfortunately, right before I got tenure, I was laid off, so the loan forgiveness didn’t apply to me anymore. :(

    I couldn’t find a teaching position for the next school year, so I subbed and tutored for that full school year (being underemployed sure was better than being unemployed!). I ended up being able to still live in my apartment without having to move back with my parents…But I still paid minimum payments to my student loan.

    A few days before the following school year, I got a full-time position and am currently in my 3rd year in that position. I make about as much at that school as I did my first year teaching out of college 7 years ago, but at least it’s livable and I lived with that kind of a salary before, so I can budget pretty well. Once I got that full-time position, I started paying larger payments for the first time to my student loan and have been doing so every month since!

    At this point, I have only $3,100 left on my student loan, and as long as I don’t get laid off at my current job, I will be able to pay this off by the end of this year and be completely debt-free! I will have paid off $31,000 in total debt (car and student loan) in about 9 years.

    A few things I have done to cut costs:

    1. I still have the same car I bought 8.5 years ago. It only has 76,000 miles on it, and I intend on using it until it can’t be used anymore, which means I’ll probably be car payment-free for at least another decade (it’s a car that’s known to be very reliable).

    2. I sometimes shop at Aldi for groceries. If I shop at regular grocery stores like Jewel or Dominicks, I see about buying items I can get club card discounts for. I also eat out only once a month (girl’s night).

    3. I combine shopping trips so that I minimize the amount of distance I drive.

    4. I have satellite TV so that I don’t feel the need to go out to a sports bar or movie theater. My DirecTV bill is far less than what I would spend going to the bar or theater a lot.

    5. I go to quite a few Chicago Blackhawks hockey games. But, I know of a place just a mere two blocks from the arena where I can park for free on the street. I get to the game early enough to assure I can get a parking spot on that street (it fills up quickly).

    6. I keep my heat on at a lower setting and wear sweats in the winter while using a low-energy fan and less a/c in the summer (I will often just open a couple windows during the summer). This saves on the 2 utilities that I must pay (landlord covers water).

    7. I chose HMO insurance over PPO insurance. I was given the choice when enrolling for benefits, and since I rarely have any health issues, it was an easy choice, and the difference is an extra $80 in my pocket each month!

    8. The first weekend of every month, I make my monthly budget and stick to it. At the end of the month, any extra money I have left from my “Miscellaneous” balance is paid towards my student loan!

  138. Jdoe January 10th, 2012

    For all of you that are whining about not being able to make ends meet because you cannot find a job or because the field you chose to go into does not afford you the kind of income that you need to pay off your loans, I have a few words for you.

    1.) You CHOSE to go into the field that you are in. You should have thought about things ahead of time and went for something like engineering or medical related if money was that big of deal to you. When I say medical related I do not mean a nurse or an assistant or something of that nature. I mean a full on doctor where you make at least six figures starting. Oh and by the way, most hospitals forgive the hundreds of thousands of dollars in student loans that doctors accrue. Why do you think a trip to the emergency room costs so much? If you would have picked a career path other than something that a mentally handicapped individual can do in their sleep then you might be getting paid.

    2.) Jobs are out there. They may not be where you are living, but jobs are out there. If jobs are not available where you are living then move. Do not give me any of this crap about how you cant move because you have family or a house or whatever. I have a wife whos getting a doctorate degree in virology and has 3 years of schooling left and I graduate in 3 months with a masters in mechanical engineering. Guess what, All kinds of job offers. None where I live but I’ll tell you what, I am sure as hell going to move to where ever I get a job and my wife will have to move later. (and by the way, going back to point number one the lowest offer I have right now is $70,000/year not counting hiring bonuses and I have 5 offers to choose from).

    3.) Those of you complaining that the US government needs to bail out college graduates are rediculous. I’ll bet 100 to 1 that those of you saying that are democrats. It was your decision to go into debt, not the US government. If you wanted to avoid debt, work part time and only take the amount of classes that you could pay for. Its the same thing as saying, “well I really could only afford a ford fiesta but I decided to finance a rolls royce instead and I expect someone else to fix my mistake”. ITS YOUR PROBLEM and nobody elses. GET THAT STRAIGHT AND DEAL WITH IT.

    4.) Cut back and suck it up. It’s called growing up and it sucks. Welcome to life. For instance, in one of the earlier posts someone was complaining about not being able to afford the student loan payment because of the car payments and gas because they lived outside of town about an hour from work where they just bought their new house and they have to make renovations to their house and blah blah blah. Give me a damn break. It was your decision to buy that house. You know full well that gas is at an all time high. You do not HAVE to make renovations to the house, the house will be there whether you make renovations or not. People, Pull your head out of your rear end and wake up. You need to take responsibility for your actions. Every action you make has a consequence and it is either good or bad. You need to always think about the future and if you made a dumb decision, it is nobody else’s fault but your own.

    In ending my rant about how bat shit stupid the majority of you are acting, all I can say is tough shit, you made some stupid choices in life. Now deal with it.

  139. Josh January 10th, 2012

    I have 75k left to pay and that prior post is hands down the best post to date on here. I could not agree more. Enough with this rediculous liberal mindset.

  140. Jdoe January 11th, 2012

    Thanks for backing me on that one Josh. I usually don’t post on these kinds of things but I couldn’t help it because I was so frustrated reading everybody else’s posts.

  141. David January 15th, 2012

    I also mostly agree with Jdoe, although I believe that companies that received bailouts should not be allowed to impose onerous fees on people who are behind on payments due to the economy. Thankfully, I have family that has been able to help me. But I’ve seen friends have their interest rates increased, go into collections, have their wages garnished, and be unable to get new jobs because their credit is in shambles and they can’t pass the employment credit checks. It’s not fair that Bank of America, for example, is putting the screws on the very people that have bailed them out (the taxpayers).

    While I think a bailout is just as unnecessary for taxpayers as it was for companies, I do think the government ought to consider extending the same benefits of public loans to private student loan debtors. My federal loans have income-based repayment (IBR), but they don’t consider the fact that I have to make large payments on my private loans (they only consider the total federal loan amount). Thus, instead of my student loan payments being 15% of my income (under IBR), they are closer to 25%. I am lucky enough to have chosen a field within the sciences that has good incomes down the road (because of the economy, companies have taken advantage and have lowered starting salaries from $55,000 to ~$30,000, but one can reach $85,000 within 5 years), but initially it will be very difficult. If only I had qualified for federal loans initially, I would be able to make more reasonable payments when my income is lower, and be able to ramp them up as my income increases.

    Since the government doesn’t seem to be considering this, I will just be tightening my belt until my income increases. That’s great, but it also means that I’ll be spending less on retail items (which, unlike banking, drive the economy), and will probably continue to rent instead of buy a house (another key economic indicator being housing sales and new housing ‘starts’).

    Also, I have to smile at the original article, with $17,000 in student loans. I have $160k (courtesy of being an international student and then grad school) and my wife has $60k.

  142. Kelly Dunning January 17th, 2012

    I also agree with everything that JDoe said.

    I just can’t fathom how people can get themselves in such enormous amounts of debt and then refuse to take responsibility for it.

    The best solution is to try to avoid student debt completely. Save up before your degree, apply for scholarships, work part time throughout your degree and in the summers, and live as frugally as possible.

    If you still need a bit more money for your degree after all this, a loan might be an option. But remember, it is a loan and not a gift and you will have to pay it back! And it should never add up to these ridiculous figures like 100,000 or more. I don’t understand what those people are spending their money on?

    Before deciding to take a student loan, you should calculate how much you will owe at the end of your degree, how much more you will make in your job because of your degree, and how long it will take you to pay off the loan. A student loan is an investment in yourself, and you have to make sure that the investment will pay off or why bother? If the calculation doesn’t make sense, consider whether or not it is the best idea to go to university at all. University does not equal success, as there are many other ways to make it in the world.

    Many people seem to be so surprised, like, “What? I owe $180,000? How did that happen?” and also, “What? The starting wage in my field is only $9 per hour? I didn’t know that!” If you can do simple math, you could have added up how much your loan and expenses were going to total after four years. With basic research skills you could have found out what kind of jobs graduates with your degree were getting. These are crucial things that you should have figured out before deciding to go down that path, and it’s not anyone else’s fault but your own that you are in that position.

  143. Nicole February 15th, 2012

    Awesome post! I think we will put off any big purchases until our debt is paid off. I have 2 years of school left before I graduate with my Master’s. Right now, I have $13,000 in student loans. I’m married with 2 kids. I paid $6000 of it off in the past few years (I’ve been going to school part-time for a while… We do need a bigger apartment, but instead of looking at the $2000+ ones we will qualify for, I’ve settled on us moving into a $1400 one. $600 more than we pay now, but our apartment is small and our kids currently share a room and hate each other, lol. Other than that, debt has to get paid off. I don’t want to make Sallie Mae payments for 20 years. I’m just worried about what debt grad school will be bringing me:(

    @Kelly: I totally agree! So many of my friends have degrees and can’t find jobs. I researched and researched, until I found a degree that is actually useful and there are always jobs for. Plus, graduates at my school tend to get hired by the place they intern for. I found this all out through research, not just getting lucky. I would love to get a degree in English Royal History, but job prospects would not be happening lol.

    Go to indeed.com, simplyhired.com, craigslist, your state employment site and search for your intended major (since if it’s wanted, it’ll be in the job description) and/or the job you want with your degree. That’s how you find out what jobs are available.

    Good luck to everyone:)

  144. Katice March 24th, 2012

    I also agree with JDoe. It’s the choices you made that have you in the situations that you don’t like. Move on and stop complaining. The good thing is that you found this site, so you are somewhat making an effort. You have plenty of tools and resources. Get moving.

  145. Gigi March 31st, 2012

    Well, I don’t (fully) agree with Jdoe and Josh, who commented below him. I agree that it’s ridiculous (and it’s spelled with and “i” in the second space, unless you were going for emphasis with a long “e” sound…) for people to expect the government to bail them out of something they had gotten themselves into and were expecting. And really classy of you Jdoe to bet those that do that are Democrats. And Josh, you’re just as equally classy to lump it all up to a “rediculous liberal mindset” With that said, markets change. Even though someone chose a field does not mean that four or two or even one year later, that market in your town is where the money will be. Yes, you can relocate. Look how fast things changed for journalism majors. Printed newspapers to Nooks and Kindles. Sucks if you were planning on running your own publication.
    And it’s very good that the job offers are rolling in for you Jdoe, with your Master’s degree behind you and your wife’s impending doctorate degree to boot. We can all see that you feel the plight of a recently-graduated student.

  146. C.B. April 22nd, 2012

    Just thought I’d mention (as a democrat liberal here) that I don’t think the gov’ should bail students out of debt. I’ll be grad. in Dec. with about 10k debt for a two year degree, which I understood getting into it. Hopefully with a computer-related degree I’ll be okay, but it terrifies me I won’t be able to handle the debt. I really don’t like debt. (Hence community college to begin with.)

    I would, however, like to see the gov’ take an interest in just how much colleges are profiting. Community colleges struggle to provide teachers, and privatized institutions of profit pay CEOs (“deans”) insane amounts while charging students sums that require loans… some degrees are only offered in such places, though. Our community college has only some degrees offered, so some people with this large amount of debt wouldn’t have had other choices in their area (beyond just not going or getting that degree, I mean).

    Just thought I’d toss that out there for all you “boo-hoo democrats don’t wanna pay back loans” types.

  147. Sue May 4th, 2012

    I graduated last year with 100K in grad school debt and have paid off almost $60K by now by making serious sacrifices and being a mature, responsible adult. I knew that getting an Ivy League graduate degree is a long-term investment and that it will be a few years before I get an actual monetary return on it, but it made sense to me and I don’t regret the choices that I have made. It is awful to have 100K in debt hanging over your head, but it is also great knowing that every month, the loan balance goes down and when it is all gone – I would still have a great degree and a solid income that I can spend on the things that matter. Here is how I am doing it:
    Before graduate school:
    - I researched starting salaries, average debt at graduation and other relevant statistics for my program and only applied to schools were the average graduation starting annual salary was at least as much as it cost me per year of grad school.
    - I busted my behind at school so that I can get the best offers I could, and then negotiated, negotiated, negotiated. I negotiated a signing bonus and relocation and as soon as I got those checks – they literally just passed through my checking account and went towards loan repayment – starting with the highest interest loan first. Same with my tax rebate. If it doesn’t stay in your account, you don’t spend it on anything but your loans.
    - I found the smallest apartment that I could, bought the cheapest furniture I could find (and as little of it as possible), shopped at discount retailers like Khol’s, Nordstrom Rack and Daffy’s for my work clothes (never pay retail for clothes), and even negotiated with my internet provider. I didn’t buy a TV because that would make me want to get cable – and trust me – you can live without cable and save a few hundred bucks right there. There are plenty of shows on Hulu. And they are all free.
    - I budget religiously and have realized that most things are a luxury and not a necessity – I get my nails done at home and that alone saves me at least $25/week. I bring lunch to work a few times a week and even bring my mug of coffee from home since the coffee at work is gross but no way am I paying $2-3/day for a cup of Joe. Do the math on that one.
    - By now, my friends all know that I am on a budget and even though we all make good money, no way am I going to join them for dinner somewhere were my bill will be $50+. People respect that. When I go drinking with friends – I get one drink and make it last.
    - I run outside and save $$$ on the gym.
    - I pay down my credit cards off every month – and only use them as needed.
    - I max out my company contribution to my 401(k) even if it means that I am paying a little less on my loans in the short-term. That is free money that will accumulate in the long-run and is worth maxing out.

    Is doing all this fun? Absolutely not. Do I ever want to cheat? Absolutely. But is it the right thing to do and worth the short-term pain? Yes.

    And when my debt is all paid off, I am pretty sure the habits that I learnt by being responsible and living below my means while aggressively paying off my debt will also be the habits that will help me save for retirement and everything in between.

    No pain. No gain.

  148. Scott May 8th, 2012

    Way to go, Sue!!! You are to be commended. I already have some ideas along these lines, but I’m curious to know what resources you used in researching starting salaries based on schools attended etc… Can you share?

    Thanks!

  149. Sue May 9th, 2012

    Hi Scott,

    I went to business school so pretty much all business schools publish the annual reports with % of students who went into a specific field, what the average starting salary and bonus are, what are the ranges etc.

    I also found http://www.glassdoor.com and http://www.salary.com to be useful in giving me an idea of what positions that I might be interested in within specific firm pay. Looking at the firms where I have worked that have data on those websites – I think it is fair to say that their ranges are fairly accurate.

    I also reached out to the career center with specific questions on recruiting – companies that come on-campus, positions that they are recruiting for (since this could be materially different) etc etc.

    Hope this helps and best of luck. The first two months of budgeting were brutal but now it feels so good to see the loans disappear one little bit at a time. Oh, also, while in school, I was very responsible and unlike a lot of my classmates who took 10K extra in debt just to go on vacations, I stayed in during Spring Breaks and borrowed less.

  150. Bethany May 11th, 2012

    @Jdoe
    First of all, I totally agree with the stop whining aspect of your post. It seems a bit ridiculous that they HAD to get a car, or HAD to stay where they lived because they just bought a house. My fiance and I have around $75K in debt together, but honestly I’m not that worried. Yes I don’t like debt but we’ve been living in an apt. together with a combined income under $20k. that’s while going to school and working less than 30 hours a week a piece. Plus, my parents claim me on taxes, so I have more than average taxes taken out of my bi-monthly paycheck.
    Now that we’re both working full time at ok jobs ($9 something an hour)I don’t see why it wouldn’t take less than 5 years to pay it off. That’s considering interest. Our plan is to live off one of our paychecks and pay loans with the other. We’re not going to buy new cars, we pay $30 a month for virgin mobile and we don’t have cable (what a waste!)
    Yes, I understand not everyone has someone that they can do this with, but those of you who do, I really don’t understand how it’s taking you so long. Sorry, just don’t.
    But my second point jdoe is that I really take offense to the Democrat comment. I’m a democrat, not that I always love our side, but hey it’s where I fall. However, I don’t think it’s a good idea to have the govt. forgive all our debt. I can just imagine where that income would hurt other sectors! HORRIBLE idea! It wouldn’t hurt to keep low interest rates, but it’s my debt, I’ll deal with it. Still, just ease off on the political remarks please? I’ve heard quite a few republicans who hate losing their tax breaks even though they complain about the national debt. Just saying.

  151. Al June 8th, 2012

    Hello everyone,

    Very interesting posts. I also had 68K student load. I managed to paid off in less than 2 years. My parents did not help me at all. I think it’s very important to choose you future job carefully. There are a lot of excellent trade jobs,
    The feeling of having no debt is amazing, I just can’t imagine having mortgage for 20 years.
    Good luck everyone,

    Al

  152. Dallas Realtor July 12th, 2012

    Interesting article which I have passed along to my friends who also graduated with student loan debt. Even five years post graduation, I’m not sure they’ve made a dent in the debt. Thanks for the useful information!

  153. Ciara July 17th, 2012

    I’m beginning my 2nd year of school and already have $50k in federal student loans. Sometimes it’s a little overwhelming to think about.

  154. KT August 18th, 2012

    @Lao – you asked if you have the extra $ to pay, should it go toward the interest or the principal. Whether it is a loan or a mortgage, definitely put it toward the principal and make sure it is noted when the payment is made.

    To those approaching retirement in the U.S. and are delinquent in student loan payments, the government will reduce your monthly Social Security amount to go toward paying off those delinquent student loans. Just the other day I read a very interesting article about the high number of people close to the age of 62 who are delinquent in making student loan payments. I looked unsuccessfully for that article online, but found this instead: http://abcnews.go.com/blogs/business/2012/08/more-social-security-money-withheld-because-of-unpaid-student-loans/.

    The original newspaper article indicated that student loans are not cleared with bankruptcy. And I think it is irresponsible for posters to suggest taking private loans to pay off student loans, then declare bankruptcy to escape the private loans.

    I got my education on the “pay as you go” system. Worked part time while going to school full time for 2 years. Left school and worked full time for 4 years, then returned to school full time. Needed to borrow a small amount toward the end. Had no difficulty paying it off.

    I’ve lived that way all of my life and have had a fruitful and satisfying life. Now in retirement, instead of drawing from our retirement accounts, we continue putting money into our savings account monthly. Neither hubby nor I have had high paying jobs. We would probably have been considered upper middle class.

    KT

  155. Alice October 28th, 2012

    My bank forced me too sell my investment funds. So suddenly I had a huge sum dropped on top of my head.

    I checked with the student loan central of sweden, and I realized that if I paid this very sum extra at once when I get my degree, it won’t do very much. If I instead divide the sum into 25 equal parts (or fewer) that I’ll pay extra each year… THEN we’re talking! from taking 25 years to pay back, it would be closer to 15. I find that very strange.

  156. Emily January 12th, 2013

    Hey Kerry!

    Thank you so much for writing a CANADIAN financial blog – my friend recommended you and I am most grateful!

    I need some advice, though – what do you recommend for students coming out of school who are being offered contracted positions? I graduated from an HR postgrad certificate program in 2009. It’s taken me this long to return from teaching overseas and working a retial job to finally land a job in my field.

    While I love my job, it pays $14/hour and is a month – to – month contract. Do you have budget, loan payment and financial planning suggestions for the the contracted ‘new’ grad?

    Thank you!

  157. Karen February 23rd, 2013

    Great advise but different folks have different needs, I worked for the US. Army Ten years never paid for my college, I worked for the Federal government now for 15 years they are not paying for my student loans would not let me do intership for school credits because I was an employee, I graduate with a Master Degree Paralegal in April 2011 debt $97000.oo, I can not move in with parents as they have both pass on, I can not move in with sisters has they also are struggling and trying to provide for grandchidren. I am paying what I can pay on my student loans and my husband help pay for the mortgage, food, utilities, gas, insurance, car etc. I have been sending out resume since 2004 trying to get a paralegal job with the government but they are always given to someone else, I am willing to relocate if necessary but just because you have the degree it is hard to get experience as I have experience in Social Security Disability Law but if you try to get additional work they expect you to have experience in the area of law they practice but do not offer internship and even if I did take a job working for a private practice attorney would get half of what I am now making so that is a no go. I spend only what I need live like a pauper as I never really had money for extra anyway but I am not going to live on beans and hotdogs, rice and oats, I love food and I have a health appetite. I pay for insurance and the co pay for doctor visit but have a difficult time paying for all the testing, surgerys and procedures required as I have poor health which the doctor won’t diagnosis just keeps giving me pills which as a family we spend $700 for medicine after the insurance pays. I will be paying until I am 80 years old, as far as tax credit you only can claim the interest you paid, same with medical bills you can only claim what you have actual paid over the a certain percentage. You might be saving money by doing your own shopping and fixing your own meals but they people that work in those restaurant depend on people eating there for their wages so either you help support them that way or if they become unemployed then we have to support them through unemployment insurance, so you are still paying the difference through taxes. I shop at the 99 cent store so that I can afford meat for when I get hunger later, I eat breakfast out sometimes and I eat lunch out everyday but I eat at the cheaper restaruants like rally, BK, McD. I do not shop at Walmart because I do not support their business practice are the way the treat their employees I would rather drive 75 miles in the other direction that buy something at Walmart. I buy my clothes at the Salvation Army so I am not living above my means but I can not pay what I don’t have. I do not use credit cards so I do not have credit card debt but I do have medical bills and student loans and I will be in debts until I am 80 years old.

  158. Minnie March 4th, 2013

    I will be graduating with 80k in debt. If I can’t get partial loan forgiveness, then I’ll just jump off a bridge.

  159. KT March 5th, 2013

    I watch the TV show “Princess” where Gail Vaz Oxlade works with young adults who are irresponsible spenders. I was absolutely stunned to hear that those who owe student loans used the $ to fund “fun trips”! I would never, EVER have thought of doing such a thing!

    Sorry to go off topic.

  160. No March 28th, 2013

    I don’t know how you managed to do it but I have a job that pays almost $3000 after taxes and if I spend NOTHING at all. Not even a penny. I would not be able to pay $17,000 off in 6 months. $3000/mo after taxes is also a lot for new graduates.

  161. Alice March 23rd, 2014

    In Sweden, it’s usually not really possible to continue to live as a student after your graduation. This is because a lot of people live is student apartments, so to speak: Dormitories or shared apartments where you can live as long as you are a student, but not any longer. Tax breaks do not work as sneaky in Sweden as in Canada either. But otherwise it sounds like a great idea, even it probably take a couple of years instead of a few months.

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