Episode 005: How I Paid Off My Student Loan Debt

Does it feel like you’re being crushed by a pile of student loan debt that will never be paid off?

In this episode of Clocking In, we’re discussing all things related to student loans and how I paid off my $36 thousand dollars of student loan debt in two and a half years. Listen in as I share what I did, what I’d do differently, and my advice to those currently making payments on their student loans.

Clocking In with Haylee Gaffin is produced and brought to you by Gaffin Creative, a podcast production company for creative entrepreneurs. Learn more about our services at Gaffincreative.com, plus you’ll also find resources, show notes, and more for the Clocking In Podcast.

Do loans and debt make you uncomfortable, whether it’s having them or talking about them. Today, we’re going to remove that feeling and replace it with empowerment. Today we’re talking about paying off the ridiculous amount of debt that we decided at the young age of 18 years old to get into. That’s right. We’re talking student loans.

If you’ve known me for a while, you know that one big goal of mine is being debt-free, and feeling a sense of financial freedom. One of the first steps of that experience was paying off my student loans. So today, I’m sharing about my student loans. What I wish I’d known when I took them out and how I paid them off in two and a half years.

Everyone’s Student Loans are Different

I’m going to brag on myself for a minute. I’m proud of myself for paying off my student loans. And if you have, you should be too. And if you’re in the process of it, you should be as well. And, I did receive criticism for my announcement of paying off my student loans. Yeah, I’m talking about the girl in my DMS telling me that $36,000 was nothing compared to her $125,000. But, I worked really hard to bring my $36,000 of debt down to zero.

I get it every person’s student loan debt looks different. It depends on the school you choose, the career you decided on, how much help you have from your parents, scholarships, and so much more. And no, I didn’t graduate with $125,000 in student loan debt. But I also chose not to. And I’m not hating on anyone who did decide to graduate with that much debt. You’ve chosen a career and a life that you want. I chose a career that didn’t actually pay as much as I thought it would. And yeah, I’ll get into that, too.

Before we get too far in, let’s look at the average amount of debt the student graduates college with, according to value Penguin, most students enter the working world with about $32.7 thousand in student loan debt. And the grand scheme of things 32,000 may not feel like it’s that much. But boy, it is.

My Student Loan Experience

As an 18-year-old entering the college world, my brain never even considered that the loans that I would take out over the next four years would be my responsibility. I remember my freshman year, I had my entire year paid for school and scholarships. And I’d worked really hard for those throughout high school, I had decided to live at home and commute to my private college to avoid taking out loans.

And then I got to school, and I realized I wanted to be on campus. I marched to the admissions office and signed my name on a piece of paper claiming the $5500 that the government decided was enough for me to go to school, and I moved on campus. Around the end of my sophomore year, I decided that advertising was the way to go. I quickly googled the average salary of an advertising professional, and it came in at around $65,000 a year. Yeah, that told me I could pay off my student loans in no time. Friends, and especially those of you currently in college, let me tell you, those are not correct numbers. If you’re just starting out in the industry, no one told me that I didn’t realize that the starting salary for an entry-level advertising professional in my market is half of that. And sometimes, if your experience is anything like mine, it’s even less than that.

That realization was devastating, right out of college, I had taken out $25,000 then you add up the interest accrued during college, and the two and a half years after I ended up paying back $36,000 out of 25,000 in loans. Like most college grads, I took that six-month grace period and avoided my loans until the last possible minute. I started paying the minimum balance. And then I remember one day logging in after a few months of paying on those student loans and realizing that the balance was not going down. It was actually going up.

How? Oh, well apparently that’s just how it works. I thought this can’t be right. Turns out it is and I was only paying the minimum but my interest rates were accruing more each month than I was actually putting in. And that’s when everything changed.

I realized these student loans were never going to get paid off. If I didn’t do something about them. I decided two things right then and there.

One, I need to educate myself on interest because at that point I hadn’t yet, and two I’m going to do anything I can to pay these off as fast as possible.

So I began paying more and more and more each month, it started small and it grew. As I cut things out of my budget, I ended up cutting almost everything out, I moved back in with my mom to avoid the cost of rent, I booked more gigs and my side hustle, I spent very little money, and I cut my bills down to the bare minimum. I think during that time my only frivolous expense was Netflix, which was like $5. During those years, I got to the point where nearly half of my paycheck was going to my student loan bills. Even when I moved jobs, I kept the same budget: spend nothing and pay off student loans.

About six months into paying them, I got engaged. We bought a house, but I was still paying off my student loans. So as a newly engaged couple, we decided that as long as I had those, my role would be to pay them off. And Stephen would take care of the house bills. Yes, I am very aware that I’m married up.

Now I know that’s not the case for most people. I recognize this privilege, I was privileged enough to have a mom who didn’t charge me rent for the first year after graduation, and I was privileged to have a fiance who decided he would take on the responsibility of the house bills while I was paying off my student loans. He knew that we were doing this for our future. Then the second that my student loans were paid off, we’d put that amount that I was paying on our house. But that is a different story for another episode.

So how did I do it? Let me walk you through a few things that I did that I feel made it possible for me to pay off my student loans.

How I Paid Off My Student Loans

Research My Loan Provider

First, I researched how my loan provider worked, every loan provider is going to be different. So make sure you’re doing the research yourself. I found that my particular loan provider wouldn’t allow you to pay only on the principal, they split up the percentage that went towards principal and interest. Additionally, if you made a standard payment with my loan provider, it was spread out evenly across your loans. And I had 10 loans – two for each year. And then two for a summer semester that I took. I realized that if I could make manual payments with my loan provider, I could choose the ones with the highest interest rate to pay off first. So I took that approach to save myself a little bit of interest in the long run.

No Spending

A few months in I decided budgeting was not for me. I actually talked about this in the five lessons my mom taught me about money episode. But I decided to approach spending with a no-spend mindset. Outside of the necessities, I was going to just stop buying things. My food bills and the bare minimum was my budget. I’d splurge here and there, but it wasn’t by spending money. This was so different than how I managed my money in college. I found a way to purchase new clothes, like taking old clothes to a resale shop for credit and using that on new to me clothes. You can find creative ways to still splurge on yourself while doing no spend budgeting.

My weakness came from the Starbucks that sat outside my office building. Yes, I’m the person who’s happy to spend $5 on a cup of coffee. So one thing that I started to do was any time that I was invited to walk over and grab a cup of coffee with a co-worker, I think to myself, I know I want this coffee and I know I can afford a $5 coffee. But would I rather put this money towards my student loans or coffee? I’m not gonna say that I said no every single time I was asked to go on a coffee break. Those friends would laugh at that lie.

But in the times that I did say no, I did something important. The second they walked away, I logged into my student loan account, and I paid $5 right then on my student loans, it seems silly. But imagine that happening three to five times a week. This is also something I talked about in my episode about five lessons my mom taught me about money. Most of us have no issues going through the drive-thru or grabbing an overpriced coffee. But what if we didn’t? And what if we put it towards something more important? I’m not saying that by giving up Starbucks, you can become rich or pay off loans. I’m highlighting the idea that if we prioritize where we’re spending our money, we can find that financial freedom.

Throw The Majority of My Income at My Loans

The third thing I did was throw most of my income at the student loans. At some point during year two, I moved beyond the idea of just making an extra payment on my loans and I threw 75% of my entry-level salary at the loans.

I cut everything out everything I didn’t need. At this point, I was married. I did have a support system that could help me out. But we made my loans a priority. The priority.

Looking back, I did become a little obsessed with paying them off towards the end. I was checking the account almost every day thinking through what I could do to make them go down even more. But if you can’t put 75% of your income towards your loans, don’t let that deter you. Most people can’t. I only did it halfway through the two and a half years just to speed up my process. I want to make my point very clear here. If you’re prioritizing specific parts of your budget, it’s so much easier to see a light at the end of the tunnel. During that time, I did just that.

I said, my goal is to prioritize paying off my debt. So how can I do this?

Now that I’ve shared a little bit about what that process looked like, I want to share what I would do differently because friends, I did not do it perfectly. It is okay to admit you were wrong in some of the things you’ve done. This is for the friends who have kids in college or are heading into college.

What I Would Do Differently To Pay Off My Loans Now

Pay During School

So the first thing I would have done is I would have considered paying my own income for school. While I was actually in school, my parents always offered to help if my loans wouldn’t cover something, or if I needed cash for books, but I never considered that I could have been paying while I was in school.

I wasted so much money on clothes, doing things with friends, and just really dumb stuff. And I’m not saying don’t enjoy college because I loved college. But I worked 25 to 35 hours a week at my part-time jobs for most of college. And sometimes up to 40 hours if I had multiple jobs. Never once did it cross my mind to take that responsibility then, so that I wouldn’t have to struggle with it later.

Educated Myself on Loans

The second thing I would have done differently is I would have educated myself on loans. , I didn’t think about the fact that my loan would add up to be so much money, plus the interest ($11,000 in interest to be exact,) which is mind-boggling to me. I wish I had better understood how loans worked in general and the expectation of repayment. Honestly, it sucks.

Now, I do believe that as someone who took out a loan for education, that is not a requirement for a job. And it’s a privilege to get that education, it’s my responsibility to pay it back. I think our high school should do a better job at preparing students who plan to go to college for the reality of what repayment after college looks like.

Take Advantage of the Grace Period

The third thing I would do differently is I would not have wasted the six-month grace period. As I mentioned before, there’s a six-month grace period for college grads to get on their feet. I graduated with a full-time job, so I had the means to start paying for them. But I just thought it was standard to not pay during those six months. And really it is the reason that I would have started paying sooner is to avoid the interest gain during those six months. Because during that time, my loans gained over $3,000 in interest just sitting there. So those are the three things I wish I could go back and redo.

I don’t regret going to college or my decision to take out loans, or even my decision to pay them off early. I just wish I would have proactively taken it upon myself to do more.

Advice for Creating a Repayment Plan

Now that I’ve shared my experience and my advice to people heading into college, I want to share a few pieces of advice for creating a plan of repayment for those currently repaying their student loans.

Loan Calculator

The first thing I would do is use a loan calculator to see what you’ll end up paying at the end after interest from your loans. For example, my $25,000 loan quickly turned into a $36,000 repayment.

Call Your Loan Provider

The second thing that I would do is call your loan provider and find out how much interest you’re gaining per day. This was a game-changer for me. When I called I realized that I was paying over $30 a day. And I was shocked. So shocked. Think of how much I could have been buying. And then also think of how much I had to work to make that at my entry-level job. So make that call today.

Should You Consolidate Your Loan

The third thing I would do is find out if you’re better served to consolidate your loans. I didn’t do this because I had a plan to pay it off early. And it didn’t make a huge difference. But depending on your long-term plan, if you do plan to do the 10 to 15 years, see if the interest rate would be better. That’s important to check.

No Spend Month

And then the fourth thing I would do, and I’ve talked about it multiple times on the podcast already, even though we’re only on episode five, is to try a no-spend month to see how much you can actually spare to put towards your loans.

Now I don’t think everyone needs to pay them off in two and a half years. If you want to make paying them off a priority. Figure out what works for your schedule and your life.

To close, I want to share an answer to the question I got asked most often. After I paid off my student loans. The question was How did it feel? To be candid, it felt overwhelming. I cried, I cheered, I celebrated. It almost felt like I worked so much harder after college for my degree than I did during college. Because now I officially owned my degree. It wasn’t something lurking over me or holding me back from other things in life. Truthfully, it felt freeing to pay it off. And that’s when I got my first sense of what financial freedom felt like.

Review the Show Notes

What Taking Out Loans Meant to Me (1:09)

How I Paid Off Student Loans (6:30)
1. Researched how my loan provider worked.
2. Approach Spending with a No Spend Mindset
3. Throw most of my income at the student loans (50-75%)

What I’d Do Differently to Pay Off My Loans (10:30)
1. Paid on school while I was in school.
2. Get educated on loans.
3. I wouldn’t have used the 6 month grace period.

Advice for Creating a Repayment Plan (13:19)
1. Use a loan calculator to see how much you’ll pay for your loan.
2. Find out how much interest you’re gaining per day.
3. Consider consolidation.
4. Try a no-spend month

Three Women I’m cheering for This Week (13:04)
Laylee Emadi
My Intern, Victoria
Katie Sirhan

Links:
gaffincreative.com
5 Lessons My Mom Taught Me About Money

Review the Transcript:

Do loans and debt make you uncomfortable, whether it’s having them or talking about them. Today, we’re going to remove that feeling and replace it with empowerment. Today we’re talking about paying off the ridiculous amount of debt that we decided at the young age of 18 years old to get into. That’s right.

We’re talking student loans. If you’ve known me for a while, you know that one big goal of mine is being debt free, and feeling a sense of financial freedom. One of the first steps of that experience was paying off my student loans. So today, I’m sharing about my student loans. What I wish I’d known when I took them out and how I paid them off in two and a half years.

Hey y’all. Welcome to the Clocking In Podcast, the podcast for entrepreneurs and professionals making their way in the working world.

I’m your host, Haylee Gaffin! 

This podcast is produced and brought to you by Gaffin Creative, a podcast production company for creative entrepreneurs. Learn more about our services at Gaffincreative.com, plus you’ll also find resources, show notes, and more for the Clocking In Podcast.

So, let’s clock in and get to work.

0:38
Hey, y’all, welcome to the clocking in podcast, the podcast for entrepreneurs and professionals making their way in the working world. I’m your host, Haylee Gaffin. This podcast is produced and brought to you by Gaffin. Creative, a podcast production company for creative entrepreneurs. Learn more about our services at Gaffin creative.com. Plus, you’ll also find resources, show notes and more for the clocking in podcast. So let’s clock in and get to work.

1:09
I’m not going to be humble for a minute. I’m proud of myself for paying off my student loans. And if you have, you should be too. And if you’re in the process of it, you should be as well. Despite the criticism that came from my announcement of paying off my student loans. Yeah, I’m talking about the girl in my DMS telling me that $36,000 was nothing compared to her $125,000 I worked really hard to bring my $36,000 of debt down to zero. I get it every person student loan debt looks different. It depends on the school you choose the career you decided on, and like how much help you have from your parents, scholarships, and so much more. And no, I didn’t graduate with $125,000 in student loan debt. But I also chose not to. And I’m not hating on anyone who did decide to graduate with that much debt. You’ve chosen a career and a life that you want. I chose a career that didn’t actually pay as much as I thought it would. And yeah, I’ll get into that in this episode, too. Before we get too far in, let’s look at the average amount of debt the student graduates college with, according to value Penguin, most students enter the working world with about $32.7 thousand in student loan debt. And the grand scheme of things 32,000 may not feel like it’s that much. But boy, it is.

2:33
As an 18 year old entering the college world, my brain never even considered that the loans that I would take out over the next four years would be my responsibility. I remember my freshman year, I had my entire year paid for school and scholarships. And I’d worked really hard for those throughout high school, I had decided to live at home and commute to my private college to avoid taking out loans. And then I got to school, and I realized I wanted to be on campus. I marched to the admissions office signed my name on a piece of paper claiming that $5500 at the government decided was enough for me to go to school, and I moved on campus. around the end of my sophomore year, I decided that advertising was the way to go. I quickly googled the average salary of an advertising professional, and it came in at around $65,000 a year.

3:21
Yeah, that told me I could pay off my student loans in no time. Friends, and especially those of you currently in college, let me tell you, those are not correct numbers. If you’re just starting out in the industry, no one told me that I didn’t realize that the starting salary for an entry level advertising professional in my market is half of that. And sometimes, if your experience is anything like mine, it’s even less than that. That realization was devastating, right out of college, I had taken out $25,000 then you add up the interest accrued during college and the two and a half years after I ended up paying back $36,000 out of 25,000 in loans. Like most college grads, I took that six month grace period and avoided my loans until the last possible minute. I started paying the minimum balance. And then I remember one day logging in after a few months of paying on those student loans and realize that the balance was not going down. It was actually going up.

4:27
How Oh, well apparently that’s just how it works. I thought this can’t be right. Turns out it is and I was only paying the minimum but my interest rates were accruing more each month than I was actually putting in. And that’s when everything changed. I realized these student loans were never going to get paid off. If I didn’t do something about them. I decided two things right then and there. One, I need to educate myself on interest because at that point I hadn’t yet and to I’m going to do anything I can to pay these off as fast as possible. So I began paying more and more and more each month, it started small and it grew. As I cut things out of my budget, I ended up cutting almost everything out, I moved back in with my mom to avoid the cost of rent, I booked more gigs and my side hustle, I spent very little money, I cut my bills down to the bare minimum. I think during that time, like my only frivolous expense was Netflix, which was like $5. During those years, I got to the point where nearly half of my paycheck was going to my student loan bills. Even when I moved jobs, I kept the same budget, spend nothing pay off student loans.

5:40
About six months into paying them, I got engaged. We bought a house, but I was still paying off my student loans. So as a newly engaged couple, we decided that as long as I had those, my role would be to pay them off. And Stephen would take care of the house bills. Yes, I am very aware that I’m married up. Now I know that’s not the case. For most people. I recognize this privilege, I was privileged enough to have a mom who didn’t charge me rent for the first year after graduation, I was privileged to have a fiance who decided he would take on the responsibility of the house bills while I was paying off my student loans. He knew that we were doing this for our future. Then the second that my student loans were paid off, we’d put that amount that I was paying on our house. But that is a different story for another episode.

6:30
So how did I do it? Let me walk you through a few things that I did that I feel made it possible for me to pay off my student loans.

6:37
First, I researched how my loan provider worked, every loan provider is going to be different. So make sure you’re doing the research yourself. I found that my particular loan provider wouldn’t allow you to pay only on the principal, they split up the percentage that went towards principal and interest. Additionally, if you made a standard payment with my loan provider, it was spread out evenly across your loans. And I had 10 loans two for each year. And then two for a summer semester that I took. I realized that if I could make manual payments with my loan provider, I could choose the ones with the highest interest rate to pay off first. So I took that approach to save myself a little bit of interest in the long run.

7:19
A few months in I decided budgeting was not for me. I actually talked about this in the five lessons my mom taught me about money episode, which I’ll link in the show notes. But I decided to approach spending with a no spend mindset. Outside of the necessities, I was going to just stop buying things. My food bills and bare minimum that was my budget. I’d splurge here and there, but it wasn’t by spending money. This was so different than how I managed my money in college. I found a way to purchase new clothes, like taking old clothes to a resale shop for credit and using that on new to me clothes. You can find creative ways to still splurge on yourself while doing no spend budgeting.

8:04
My weakness came from the Starbucks that sat outside my office building. Yes, I’m the person who’s happy to spend $5 on a cup of coffee. So one thing that I started to do was any time that I was invited to walk over and grab a cup of coffee with a co worker, I think to myself, I know I want this coffee and I know I can afford a $5 coffee. But Would I rather put this money towards my student loans or coffee? I’m not gonna say that. I said no. Every single time I was asked to go on a coffee break. Those friends would laugh at that lie. But in the times that I did say no, I did something important. The second they walked away, I logged into my student loan account, and I paid $5 right then on my student loans, it seems silly. But imagine that happening three to five times a week. This is also something I talked about in my episode about five lessons my mom taught me about money. Most of us have no issues going through drive thru or grabbing an overpriced coffee. But what if we didn’t? And what if we put it towards something more important? I’m not saying that by giving up Starbucks, you can become rich or pay off loans. I’m highlighting the idea that if we prioritize where we’re spending our money, we can find that financial freedom.

9:20
The third thing I did was throw most of my income at the student loans. At some point during year two, I moved beyond the idea of just making an extra payment on my loans and I threw 75% of my entry level salary at the loans. I cut everything out everything I didn’t need. At this point I was married. I did have a support system that could help me out. But we made my loans a priority. The priority. Looking back, I did become a little obsessed with paying them off towards the end. I was checking the account almost every day thinking through what I could do to make them go down even more. But if you can’t put 75% of your income towards your loans, don’t let that deter you. Most people can’t. I only did it halfway through the two and a half years just to speed up my process. I want to make my point very clear here. If you’re prioritizing specific parts of your budget, it’s so much easier to see a light at the end of the tunnel. During that time, I did just that.

10:24
I said, my goal is prioritizing paying off my debt. So how can I do this? Now that I’ve shared a little bit about what that process looked like, I want to share what I would do differently because friends, I did not do it perfectly. It is okay to admit you were wrong in some of the things you’ve done. This is for the friends who have kids in college or are heading into college.

10:47
So the first thing I would have done is I would have considered paying my own income towards school. While I was actually in school, my parents always offered to help if my loans wouldn’t cover something, or if I needed cash for books or, but I never considered that I could have been paying while I was in school. I wasted so much money on clothes, doing things with friends, and just really dumb stuff. And I’m not saying don’t enjoy college because I loved college. But I worked 25 to 35 hours a week and my part time jobs for most of college. And sometimes up to 40 hours if I had multiple jobs. Never once did it cross my mind to take that responsibility then, so that I wouldn’t have to struggle with it later.

11:32
The second thing I would have done differently is I would have educated myself on loans. How much money I was borrowing, and interest rates 1819 2021, I didn’t think about the fact that my loan would add up to be so much money, plus the interest $11,000 in interest to be exact, which is mind boggling to me. I wish I had better understood how loans worked in general and the expectation of repayment, the fact that most people pay on their loans for 10 to 30 years. I can’t I can’t put it into words. Honestly, it sucks. But it’s realistic in most cases. Now, I do believe that as someone who took out a loan for education, that is not a requirement for a job. And it’s a privilege to get that education, it’s my responsibility to pay it back. I think our high school should do a better job at preparing students who plan to go to college for the reality of what repayment after college looks like.

12:32
The third thing I would do differently is I would not have wasted the six month grace period. Like I mentioned before, there’s a six month grace period for college grads to get on their feet. I graduated with a full time job, so I had the means to start paying on them. But I just thought it was standard to not pay during those six months. And really it is the reason that I would have started paying sooner is to avoid the interest gain during those six months. Because during that time, my loans gained over $3,000 in interest just sitting there. So those are the three things I wish I could go back and redo.

13:08
I don’t regret going to college or my decision to take out loans, or even my decision to pay them off early. I just wish I would have proactively taken it upon myself to do more.

13:19
Now that I’ve shared my experience and my advice to people heading into college, I want to share a few pieces of advice for creating a plan of repayment to those currently repaying their student loans.

13:31
The first thing I would do is use a loan calculator to see what you’ll end up paying at the end after interest from your loans. For example, my $25,000 loan quickly turned into a $36,000 repayment.

13:46
The second thing that I would do is call your loan provider and find out how much interest you’re gaining per day. This was a game changer for me. When I called I realized that I was paying over $30 a day. And I was shocked. so shocked. Think of how much I could have been buying. And then also think of how much I had to work to make that at my entry level job. So make that call today.

14:10
The third thing I would do is find out if you’re better served to consolidate your loans. I didn’t do this because I had a plan to pay it off early. And it didn’t make a huge difference. But depending on your long term plan, if you do plan to do the 10 to 15 years, see if the interest rate would be better. That’s important to check. And then the fourth thing I would do, and I’ve talked about it multiple times on the podcast already, even though we’re only on episode five, is to try a no spend month to see how much you can actually spare to put towards your loans.

14:44
Now I don’t think everyone needs to pay them off in two and a half years. If you want to make paying them off a priority. Figure out what works for your schedule and your life.

14:55
To close. I want to share an answer to the question I got asked most often. After I paid off my student loans. The question was How did it feel? To be candid, it felt overwhelming. I cried, I cheered, I celebrated. It almost felt like I worked so much harder after college for my degree than I did during college. Because now I officially owned my degree. It wasn’t something lurking over me or holding me back from other things in life. Truthfully, it felt freeing to pay it off. And that’s when I got my first sense of what financial freedom felt like.

15:32
This has been another episode of the Clocking In Podcast. You can find the show notes for this episode and more at gaffincreative.com. Thank you so much for your listenership and support! If you loved this episode, I’d be so honored if you’d leave me a review in the Apple Podcast App. Until next time, I’m your host, Haylee Gaffin, clocking out.

16:00
In last week’s episode, I shared three women that I was cheering for. So I decided to make it a little series for those of you who are sticking around for the very end of my podcast.

16:11
This week. I’m cheering for my business coach Laylee Emadi as she leads our mastermind retreat this week and impacts some truly amazing business owners.

16:20
I’m also cheering for my amazing intern Victoria because since joining my team, she has consistently blown me away. I can’t describe how much value she’s brought to me over the last few weeks.

16:32
And lastly, I’m cheering for my beautiful friend Katie Sirhan, a new mother who has recently returned to work and is kicking butt at both. She was truly made to be a mom to little Tucker and I’m so honored to call her my friend. Make sure that you pick three women in your life to cheer for this week. And do whatever you can to make them feel seen.