Ayrton, 24, was the first in his family to go to college and studied computer science at Penn State. Once he graduated, he realized that some of his loans had been accruing interest for years, including some balances that had almost doubled. After getting a job as a software engineer and using his tax refund and bonus from his first year working, he was able to pay off his credit card debt, and refinance his 12% loans to 4.29%.
Why did you want to study computer science?
I’ve been around computers since I can remember. My dad owned an internet cafe in Peru, and in high school I took programming courses. I had a really good relationship with my professor and thought computer science was the perfect major for me.
What was it like applying for college?
I was the first one in my family to go to college, so I didn’t have a lot of guidance from my parents. My mom lives in Colombia, and at the time my dad was busy working as a truck driver. I was lucky enough to find an afterschool program that helped with applications. When I got into Penn State, I never really thought about how I would finance my education.
How much did you know about student loans when you started school?
I was pretty careless and didn’t do my research. I didn’t know the difference between subsidized, unsubsidized, and private loans, and I didn’t understand the concept of different interest rates. After I graduated, I started getting all the emails. I went into my accounts to see my balances, and realized that some of my loans had been accruing interest the whole time I was in school. I had a private loan from Wells Fargo that was originally for $10,000, but by the time I graduated the principal balance had increased 70%, to $17,000. In total I had about $70,000 in loans when I graduated.
What was your job search like coming out of college?
At Penn State I was in the Society of Hispanic Professional Engineers – they had workshops and mock interviews, and had companies come and give presentations. I got two summer internships through academic groups, and I started my senior year with a job offer. After I graduated I kept looking and got an even better job offer as a software engineer at a financial corporation.
How have you approached paying back your loans?
When I saw how much interest my Wells Fargo loan had accrued, I tried refinancing with them. At the time my credit score was around 630-640, and they denied my application – and my score took a hit because they made a hard inquiry. I cut down on my spending and used my tax refund and end-of-year bonus to pay off $4,000 in credit card debt, and after that my score went up by almost 100 points. After that I was able to refinance my private loans from a 12% rate to 4.29% with CommonBond. Now I have a minimum monthly payment of $1200 ($350 for my CommonBond loan and $850 for my federal loans). I’m on my way to being debt free in five years!
What are your other financial goals?
I might increase my student loan payment from $1200 to $1500, but I also want to save for a down payment and start investing in real estate. My goal is to put around $500 a month into savings, and then even more once I pay off my loans.
What’s post-college life like?
As a software engineer I get to do a bunch of stuff, from websites to apps. There’s a lot of learning as you go, which I like a lot. The work-life balance is pretty great, too. I work less than forty hours a week, and in my spare time I like to stay active. I play soccer, work out, go hiking, and do water sports like kayaking and paddle boarding. I’ve also been traveling a lot since I started working!
Looking back, what advice would you give yourself when it comes to loans?
Don’t underestimate how much you’ll have to pay after you graduate. Educate yourself on how expensive school is, how interest works, the types of loans you’re getting, and whether they’re subsidized or unsubsidized. If you’re able, start making payments as early as possible, even before that six-month after grace period.
This interview has been condensed and edited for clarity.