“Wait—that can’t be right. It just can’t be!”
That’s what my mind kept saying over and over again as I stared at my student loan balance for what seemed like the 50th time on my laptop screen. After three years of making steady payments of $370 a month, my $60,000 balance had only gone down about $800.
Eight hundred dollars! It was unbelievable.
I sat in shock, feeling completely defeated. My student loans went from a nagging bill in the back of my mind to a full-on, can’t-ignore, living nightmare I couldn’t see a way out of.
Little did I know there were students just like me all over the U.S. living out their own student loan nightmares.
That day six years ago was my turning point. At the time, the student loan crisis hadn’t hit the mainstream news, so many of us soldiered on through massive debt in silence, feeling a degree of shame over a financial situation that seemed nearly impossible to overcome.
I wish I could say things have dramatically changed for students since then, but as it turns out there are still millions struggling under the weight of student loans, and their stories are everywhere.
There’s the woman who paid $18,000 on her $24k student loans—only to find out she still had an $18k balance. This teacher thought he was on track to receive Public Service Loan Forgiveness, only to discover he was on the wrong payment plan. Or how about the woman who sent in a $7,000 payment that somehow got lost at Navient?
All of these stories, my own included, reveal something important.
Too many of us enter the world of higher education with the hope of a better financial future, only to be met by massive student debt and bureaucracies filled with red tape that seem impossible to navigate.
Don’t worry—this article is not all doom and gloom. The awesome news is that if you find yourself in a student loan nightmare, you're not alone and you CAN overcome the situation. Trust me—I know this firsthand because I’ve done it.
So if you find yourself in this situation, read on to understand how to start to shift your reality and future to a much brighter place.
Get ahold of your situation
It may not be pretty, but in order to find your way out of this financial sinkhole, you need to gather all the information you can about your student loan(s).
Your goal is to gain a clear picture of what has happened to date, and where things got off track. You want to find the source of your problem.
Here are some areas to look at:
- High interest rates—A high interest rate can kill your progress on paying off your principal. Depending on your rate and loan terms, you could end up paying as much or more in interest than the original loan amount you borrowed.
- Your payment plan—Does your payment plan make sense for your financial goals? A standard repayment plan may mean a higher payment but you’ll be done in 10 years. Income-based repayment plans may lower payments but it could take up to 25 years to pay off your loan.
- Public Service Loan Forgiveness—This directly relates to the above point about ensuring you are on the right payment plan since you are required to be on an Income-Driven Repayment Plan to be eligible for student loan forgiveness. In addition, you’ll want to make sure you have filled out the correct paperwork, including your Employment Certification Form.
In my case, a high-interest rate was the culprit. Each month only $80 of my $370 payment was going toward the principal. So I began to focus on how I could lower my interest with options like refinancing my student loans. You’ll find your area of focus, too.
Look for details
As you start to identify the root of the problem, try to uncover as many details as possible.
Some ways to do this include:
- Finding and rereading your promissory note—Make sure you fully understand all the terms of your loans and who actually holds your loan. My loan was moved from servicer to servicer, which made it all the more important for me to have clarity about my loan amounts and terms.
- Getting on the phone with your lender to ask more questions about how your loan works—This includes any follow-up questions to your promissory note research.
- Reviewing all of your payments to scan for anything abnormal—If you are making extra payments, are they being applied correctly? Is every payment you have made accounted for? Take a detailed look to make sure everything looks correct.
You want to understand everything about your student loans. If I hadn’t logged in to my account that fateful day, I probably would still be clueless as to how interest was impacting my payments toward the principal. It took me a while, but I combed over my payments, took screenshots, and got on the phone with my lender to understand every aspect of my student loans.
Now that you understand your situation more and have hopefully arrived at the root of the problem, you can start to research solutions. Start by reading up on some of these student loan resource sites:
- Student Loan Hero
- CNBC’s Make It
- Blogs including CommonBond, Broke Millennial, Dear Debt, and more
- Books, podcasts and other resources
The chances are high someone else has shared a story about a student loan situation similar to yours.
When I started researching ways to pay off my loans, I became a little overwhelmed on where to start. If you feel that way, just focus on one or two solutions to explore so you don’t get stuck. This article has become one of my favorite sources of student loan payoff ideas because it also shares the effectiveness of each approach.
Talk to people
While the people around you may not know the solutions to your student loan problems, they can be a great source of support. No one in my circle had anywhere near the amount of debt I had, but they were all amazingly supportive throughout my journey.
I found just telling other people made me feel less alone. Some people were great about pointing me to resources while others shared how they paid off their own loans, giving me just a bit more hope.
Take action and be okay experimenting
Once you have worked through the research and talked to others, it’s time to take action.
It’s rare that one approach will solve your problem. Paying off my student loans was a series of experiments, successes, and failures. There were times I thought I had things figured out only to find I needed to adjust my approach and try something different.
The key for me was to not get stuck on “what-ifs” or focus on why things won’t work. I just had to start doing something to work toward my goal and keep going with a relentless focus on becoming free of my student loans. Here are some of the ways I started to move forward and dig myself out of debt:
- Reviewing my loan terms with great attention to detail
- Spending time on the phone with my lender and asking a lot of questions
- Keeping records of my conversations and notes so I had a clear picture of what I was learning
- Using student loan calculators to fully understand how much I would be paying in interest over the life of the loan and how extra payments might help
- Researching ways to pay off my student debt, then doing more research when things didn’t work out as planned
- Creating a budget and using budgeting software so I could understand how much money we had, where it was going and if there was anything I could put toward my loans
- Cutting expenses in some areas
- Increasing my income by looking for higher paying jobs and picking up freelance projects
- Making extra payments with any additional funds that came our way
- Talking with my partner about debt and budgeting
- Refinancing my student loans to finally get rid of the high interest rate
- Working for myself as a creative entrepreneur so I could make better money pay off my loans faster
These were some of the most impactful steps I took toward getting out of student loan debt, but there was a lot of trial and error involved. Even when things didn’t go as planned, I didn’t give up. I just kept finding the next best step to take until all of my small steps led up to big progress.
In June 2018 I made my final student loan payment. It was an unforgettable day, but I wouldn’t have gotten there if I hadn’t tried so many different strategies.
Focus on your progress, not the problem
One of the toughest parts of paying off student loans is that it takes time. Sure, some people take extreme measures and pay off their student loans in record time, but I knew that wouldn’t be the case for me. Plus, I didn’t have the option of moving back home or even downsizing much to save money.
I’m happy for those people who are able to accomplish their dreams faster because it’s great motivation for the rest of us. At the same time, I had to learn my story was going to be different.
For that reason, it was important I began looking at all the good work I had done to bring down my balance instead of focusing on how much more I had to go. I made the intentional choice to start thinking more about how much I had paid instead of how much I still owed.
This slight change in perspective made a huge difference. If you want to keep up your stamina for the long road toward student loan payoff, keep focusing on your wins and the journey will be a lot more pleasant.
You may be reading this thinking “but I have more debt and I make so little!” That may be true, but whether you have more debt or less—whether you make a lot of money or are barely scraping by—I’ve found it really doesn’t matter. Just start taking action toward your goal from where you are at now. That’s what I did and it worked.
Even as I write this story there is a small part of me that still can’t believe I wiped out my debt. But I did and almost every day I smile to myself knowing all of the work was worth it. You will, too.