Post-college life

How an elementary school teacher cut her student loan rates in half

Alexandrea, 24, always knew she wanted to be a teacher. She earned a dual degree in early childhood and special education but had to take out private loans with interest rates as high as 16% along the way. She knew she needed to lower her payments somehow, and after improving her credit score, she was able to refinance into a 6% interest loan, lowering her monthly payment by almost $400.

Alexandrea, 24. Photo courtesy of borrower.

Why did you want to become a teacher?

My mom worked as an inner-city teacher. And in high school, I was a babysitter for a boy who had severe learning disabilities and ADHD. When I’d do homework with him, I’d see him have these moments of understanding, and it was really gratifying for me. I realized, this is what I want to do for the rest of my life. I went to a public university in Pennsylvania and earned a dual degree in early childhood and special education, which ended up taking five years.

How did you feel about your loans once you graduated?

They were very daunting. Because I have a single mother, I got pretty good financial aid through the school and the state, but there were expenses that weren’t covered. I hadn’t established my own line of credit and my mom didn’t have great credit either, so my loans came with exorbitant rates that I thought I’d be paying for the rest of my life. I graduated with $50,000 in private loans with rates ranging from 12-16%, and an additional $25,000 in government loans. My monthly payment was around $1,200. I knew I had to get a job immediately so I could start paying off the loans, even with the six-month grace period.

What was your job search like coming out of college?

I graduated in May of 2018. I was fortunate to get a lot of interviews, but it’s difficult because Pennsylvania produces a lot of teachers and there aren’t a lot of job opportunities. I ended up getting a one-year contract at a small Title 1 school a few months before the school year started. After that ended, I started searching again – I knew I didn’t want to be in Pennsylvania forever. I got a contract position as a 3rd-grade teacher outside of Washington, DC and found a place to live around there.  

When did you realize refinancing was an option for you?

I’ve seen people fall into the belly of the beast with credit cards, so I’ve mostly been establishing my credit through paying off loans. I just got a credit card and I’m still very hesitant about it. I have an uncle who works in finance who mentioned refinancing, so I did some googling and found a NerdWallet article about it. I figured if I could get my interest rate down to even 8 or 9 percent, it would be better than nothing. I applied with SoFi first, but because I only had a 1-year contract as a teacher I had to jump through a lot of hoops, and I ended up getting denied in the end. Then I applied with CommonBond. They were extremely easy to work with and I got approved for a 6% interest rate. Today my minimum payment is $530 for my CommonBond loan and $300 for my federal loans.

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What have been your strategies for paying down debt?

I was fortunate that after college I came home for a year and did not pay rent. I was frugal, pinched pennies, and saved up a big chunk of money so I could continue to pay off my loans and make overpayments to drive down the cost in the long run. With my refinance, I opted for a 10-year repayment plan that seemed a lot more reasonable than paying off loans for 20-something years. I got really lucky with CommonBond – I’m only the first year into paying back my loans, but I feel like I’m not going to be in debt forever. Now that I’ve moved out and have my own apartment, I put money for rent and loans aside from my paycheck and use an app to track my other finances. Anything that isn’t groceries or utilities I put into my savings account and don’t touch.  

What keeps you motivated?

I hope to continue to teach and pay off my loans. I want to go back to school at some point, but the additional debt looms over me. I have two little nephews with whom I spend most of my time. My world really does revolve around being with kids! I like to go for walks, hike, go to restaurants with my friends. I try to stay active in politics and know what’s going on in the world. I think it benefits both me and my students in the long run.  

What advice do you have for others?

To explore as many options as possible. I was told Sallie Mae was the way to go. Then I realized my peers in college had gone through different routes with different payment options. I feel like I didn‘t have enough education about what was available to me. I went for the most common option, and that bit me in the butt. My other piece of advice would be to start saving as early as possible. Even in college when you have a minimum wage job working in the food hall, save as much as possible because it makes an impact in the future.  

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This interview has been condensed and edited for clarity.

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