Since I started this site in May of this year, my student loan debt has continued to rise. This could be seen as a failure, but you’d be missing the bigger picture. Amidst this rise is an effort to change everything and get back to zero debt – fast.
Reducing Student Loans
For starters, I’ve only taken out $3,500 this semester for graduate school. I worked hard last year to secure more hours at my on-campus job, and the monthly paycheck is now helping balance my budget. On top of that, I’ve paid back all of the interest gained on my student loans from the very beginning.
Last week, in a matter of two electronic deposits, I paid off $1,000 of my current debt. This leaves me with $32,700 is student loan debt. Now, while this excludes the complication of having a car loan (and the more than $6,000 liability that brings), I believe my student loans are the biggest concern to tackle.
Where I Was Headed
At 6.8%, my student loans gain a little less than $200 in interest every month. I’m lucky, a portion ($8,500) is subsidized by the government and non-interest bearing. Unfortunately, the government stopped subsidizing graduate students’ educations, and now the vast majority of my loans are rapidly accelerating. Compounded interest is truly frightening – sometimes it keeps me up at night.
If I hadn’t redirected my course, I was looking at $70,000-80,000 in student loan debt by the time I graduated. This burden would cripple me for years. I probably wouldn’t be able to pay it all back until my mid-40s. Two decades of interest and principal payments scared me into changing course.
The Goal: Payback
This semester I adjusted my loans down from the nearly $15,000 I was offered to a scant $3,500. But with recent financial successes with this website and smart financial planning, I may be able to pay the bulk of this debt before I graduate.
Even if I can’t pay everything off, I’m looking forward to beating this number. It provides a clear goal to work towards with a regained hope about my future freedom. I’m sick of this large liability and don’t want to owe the government or big banks.
Ever heard of someone paying all their student loan debt in graduate/professional school? Is it possible?