There are a lot of us out there. First generation college students, or students who are the first in their family to attend college, make up about a third of students in higher education. If you're a low-income, first gen college student with a four year degree, you're counted among the 11 percent who actually make it to commencement day each year. An even smaller number of those graduates will go on to complete a master's degree. That was me almost 10 years ago. I was a first gen college student who went to a state school for journalism, then four years later went to a well-known private school for my master's in communication management. In 2009 I walked away with brand new master's degree and about $60,000 in student debt.
Don't get me wrong. I had an amazing educational experience. But I also had a mountain of student loans and no clue how to pay them off. Did I mention I worked the whole time I was in school? At one point I held three jobs to put myself through undergrad and earned a sizeable scholarship in grad school. It still wasn't enough. After graduation I was making $50,000 a year but owed $60,000 in student loans. The good news is, as a first generation college student I was great at beating the odds and my story is proof you can do it, too. In fact, this story is for anyone who owes more in student loans than they make annually, who has lost sleep over trying to figure out how to pay off your loans, or has felt frustrated that you wanted to cry because your payments aren't going far enough. Read on, because there's hope for you yet!
Understanding My Debt: How Did I Get Here?
We didn't talk a lot about money in my house growing up except to say we didn't have any. Financial literacy wasn't a "thing" for us. So although I was working my way through college and grad school, I also made a lot of costly missteps like not fully understanding how to best use credit cards, living off of my student loans when my paycheck didn't cover things, and borrowing student loans with high interest rates.
After finishing my master's program I knew I had a lot of debt but it was almost as if I was trying to avoid the problem. Then in May 2012 I went to check on my student loan balance (below). I noticed only $80 of my $370 payment went toward principal. Eighty dollars!! This sent me into shock. After some research I realized by consolidating my high-interest private loan from grad school with my low-interest undergraduate loan, I had unintentionally increased the interest rates on all my loans.
After that rude awakening, reading up on how people paid off their loans and budgeted became my obsessions. The knowledge was powerful, but also frustrating. People seemed to be paying things off at ridiculously fast rates with extreme measures I just couldn't see working for me.
Seeing Failures as Stepping Stones to Success
One key takeaway I gained from reading all those student loan payoff success stories was that there was no silver bullet solution to paying off student debt. People usually took many different approaches. After trying to work a second job as a hostess at a restaurant (fail), live frugally (fail), and trying to convince my partner to downsize or move (another fail) I started to learn more about budgeting and money in general. The problem was I was working hard and budgeting but not making enough progress.
During this time, my husband and I also had a lot of life firsts: our first apartment together, our first dog, our wedding, our first big move together and our first child. All of these were beautiful moments but the feeling of being in debt constantly weighed on me. I made a promise to myself that I would do my best to enjoy life, while staying committed to my goal of financial freedom. Instead of feeling discouraged that none of my previous payoff efforts were working well, I actually became more determined and started to zero in on payoff strategies that would have larger impact, including:
Making more money: Somewhere, I read one of the best ways to pay off debt is to just make more money. It sounded simple enough but I didn't know how or what I could do. I tried working a second job before and it wasn't worth the energy or time. What I hadn't considered was how all of my education and professional experience could increase my income outside my full-time job. That's when I decided to start freelancing on the side to work on communications projects. Since I had basically always worked more than one job in college, I was OK working on projects before or after my 9-5 and on weekends. In addition, my amazingly supportive husband and I started to rent our home on Airbnb, sell things online and do some Lyft driving. All of these were second jobs, but they allowed us to build on our current lifestyle in new ways. In addition, we also put every tax return or any extra money, even my birthday gifts, toward my loans. This helped a lot but I knew I'd still be in debt for years and lose thousands on interest if I didn't find an alternative to my current loan.
Refinancing with CommonBond: In 2016, I heard about something called refinancing student loans. At first I thought it was too good to be true, so I started researching lenders and reading up on the companies disrupting the student loan industry by offering refinancing. Although I really wanted to try it, I was also super nervous about refinancing because it was such a new industry. After a lot of internal debate I decided to go for it and applied to refinance my loans with CommonBond. As soon as I refinanced, I quickly began to see my balance go down with my monthly payments. I finally felt like I was #winning! I'm still so grateful for the chance to refinance with such an amazing company that not only gives students a fair shot at financing their education, but also has killer customer service and a social mission that changes the world.
Ready to take control of your student loans? Refinancing with CommonBond can help. Check your rates right now.
Changing my money mindset: After so many years of carrying debt I had a VERY negative mindset. It wasn't uncommon to hear me and my friends talk about how highly educated and completely broke we were. I had a steady job but I was tired of the bureaucracy, office politics and below market pay. I heard myself constantly complaining about my job and how I would never pay off my student loans at this rate. I felt stuck in a cycle and no one in my circle of family or friends could help beyond acting as sounding boards and emotional support. One day I got sick of it all and decided to read up on how to stop the cycle of negative thinking and start to really change my life. I also started listening to podcasts and following blogs on how to become creative entrepreneur. Right around this time I started blogging about my student loan journey as a way to work through my experience.
A Job Layoff and a Freelancing Breakthrough
After I had our second baby last summer, my husband got laid off from his job. Thankfully, he bounced back and landed another job quickly. I remember it was his first week at work and I had to call him with bad news. "I'm getting laid off," I said to him trying to fight back tears. We were beyond frustrated. After some long talks, we agreed job security just doesn't exist any more. It was time for me to go freelancing full-time.
Freelancing changed everything for me. All of those years doing extra project beyond my 9-5, listening to podcasts, taking online courses, and reading books about creative entrepreneurship paid off. Within the first week of being laid off I updated my website and sent out an email to my network letting them know I was available to take on projects. I also began to to cold pitch companies I wanted to work with. There was definitely a learning curve, but freelancing felt right and within a few months projects started to come my way. One year later, my business is doing awesome. I'm able to take on projects that pay well and work with the dreamiest clients creating content I love. I've even been able to write for CommonBond! I started to make incredible progress on my loans by picking up big projects and throwing all of the extra money toward our loans.
It was right about the $7,000 mark that I really knew I was going to be done with my loans for good. I had such a feeling of relief knowing I could make more money any time I wanted to—and I could definitely make enough to pay off my loans. That's exactly what happened, next. In June I wrapped up a large project that allowed me to pay off the last $5,700. I actually had my daughters log in with me online while my husband took a photo of them (below) helping me make the very LAST payment.
It's still a little hard to believe that I've been able to pay off close to $60,000 of student debt in less than 10 years, while getting married, having two beautiful girls and finding a place to live by the beach. When I see screenshots of where I was then, paying that much in interest seems insane. I'm so glad I did everything I could to get out of debt. The journey has taught me so much about myself, my relationship and of course about money. The biggest lesson I've learned is that at any given moment I have the power to create the life I want. And guess what? You do too.