How to Lose a Student Debt Load in 180 Days
I graduated in 2014, with my hat in my hand and $8,000 owed to the Department of Education. While $8,000 was only about a third of the average student debt, it was a terrifying number for me. My most ambitious purchase to date is an Ikea bookshelf. Eight thousand dollars could have paid for more than a year’s worth of rent, a decent used car, or months of traveling in Southeast Asia.
The shattering backhand of repayment hit me while I was doing my “loan counseling” program before graduation. My loan servicer’s plan included paying over $2,000 in interest over nine years, the final payment due in 2023. The plan gave me small monthly payments of $89. This was a ridiculous plan for a relatively small loan, and was obviously designed to pay off the smallest amount of principal possible per month. I had never been so blatantly ripped off before, except maybe by Comcast.
I resolved that they could take their loan repayment plan and shove it, and made myself a new plan.
The facts are these: I had four separate loans. Half of them had an interest rate of 6.2%, and the other half had an interest rate of 2.3%. They all compounded daily. My goal was to pay them off in six months, beginning in January when my loans went into active repayment. I made my loan payoff day the 4th of July, because I’m American like that. It would be my personal Independence Day.
When January arrived, I found myself in a new city, Birmingham, Alabama, with no savings. I hustled like hell to become employed. I spent countless hours sending resumes into the supermassive black hole of online applications, seriously considered becoming a CDL class truck driver, and sent out several frantic pleas for employment via Facebook.
Thankfully, I soon became overemployed: I worked three jobs simultaneously at a synagogue, a bakery, and later, an office. Between these, I earned between $1,600 and $2,000 per month. Since I couldn’t afford a car, I walked to all of them. I would feel numb when I went to clock in, my frozen fingers attempting to punch in my I.D number (though I was lucky to be walking in an Alabama winter instead of an Alabama summer). For three months, I worked seven days a week, often 14-16 hour days.
Work swallowed my life. I didn’t have time to read a book, pluck my eyebrows (a much-needed activity), or even have a longer than usual bathroom break. A Netflix binge was an unthinkable luxury. Every intimate detail of life was dictated by the clock. I ate at work, I took naps between shifts at work, and I made my loan payments at work.
While I was grateful for my employment and my wonderful coworkers, my daily life was dull and dispiriting. Cleaning tables of soggy spinach, alphabetizing, data entry, holding hot plates, answering the phone, sweeping the floor, “Yes, sir,” “Yes, ma’am.” All of the jobs I was able to get did not require the degree I was using them to pay for. They did not even require a GED. Welcome to the economy, kid.
By April, I had paid off half my debt and decided to take a break. I was worn as thin as the soles of my waitressing clogs. My soul was dusty and my mind was a jumble of receipt tape and twisted paper clips. To reward myself, I asked for Sundays off. I replaced the foldout table with an Ikea one, bought some boxed wine, and went on an anniversary trip with my boyfriend. This made an enormous difference in my mental health and allowed me to spring back into debt repayment with renewed focus.
When the magnolias began to bloom in early June, I made some calculations, and realized I would be able to reach my goal just by working my office job. Surprisingly, as much as I hated the interminable hours, it was difficult to leave the security net that multiple jobs provided. Exhaustion made the decision for me. I needed a weekend, dammit! I used to daydream about weekends like some people fantasize about Chris Hemsworth, and so, I gleefully ran into Saturday’s sweet arms.
While working long hours whittled me into a sad-eyed service drone, the other half of the debt-repayment equation—saving my money—was relatively easy. You’ve probably heard this advice before: track your expenses, get a cheap apartment, no cable, cook at home, re-negotiate car insurance, get an inexpensive phone plan, buy groceries and toiletries in bulk, and don’t buy anything else. Also, learn to say no to your friends (even your best friend, Wine).
If I did have a budgeting secret, it would be this: living in Alabama. A low cost of living does beautiful things to your bank account. All of my expenses were under $800 a month. Another important budgeting move was buying obscene amounts of ramen. My arteries probably look like beef jerky from the salt, but that glorious noodle was essential to prevent eating out when I was exhausted.
As I continued to fling paychecks at my loan, I relished seeing the number go lower and lower and checked it every day. I was obsessed, to the point where I spent my emergency fund so I could have the satisfaction of watching the numbers disappear into the ether. I fantasized about how it would feel when my debt was repaid. I thought that I would feel like Frodo after he threw the Ring into Mount Doom.
“It’s gone, it’s DONE,” I would whisper, shocked and relieved. Then I would promptly collapse onto a lava field.
But when the day came on July 2nd (two days ahead of schedule!), it lacked grandeur. I neurotically refreshed my loan servicer’s page fifty times while waiting for the payment to process. Finally, I saw the long-awaited zero on my account. The due date? N/A.
I looked at the zero again. And again. And again. The zero continually failed to congratulate me on my victory. I took a nap.
Perhaps I lacked excitement because I now had a mere $1.50 in my bank account. I had shoved ALL my resources at this loan. The forgotten childhood bank account, the change jar, my wimpy tax refund. No couch cushion was left unturned.
A couple of weeks, and one paycheck, have gone by since my debt was repaid, and the world has shifted in subtle and profound ways. When I sleep at night, I am awash in the rosy glow of relief. I used to feel like an embittered elderly woman, disappointed with what life had given her. Today, I feel the world going green again. My life has possibilities. There are so many more coin-operated doors I can open in my life.
Though I wouldn’t say I’m grateful for my debt, I should acknowledge the gifts it gave me. I became closer with my frugal parents, for whom debt repayment is an almost religious process. I feel like they’re prouder of me for funding my tuition myself through scholarships and menial jobs than the actual degree it paid for.
I also gained a heap of financial knowledge that I accidentally picked up while researching loan repayment. I am much more prepared to manage my extra money now that I have some. I finally feel like I have control over my cash.
This story is part of our College Month series.
Rachel is a freelance writer living in the unexpected paradise of Birmingham, Alabama. She is frantically attempting to keep her basil plant alive.