Just how aggressively did you pay off your student loans?

[deek]

I really want to go to town on them, but is it really worth sacrificing experiences while I'm young and before I have a family? I just saw that I spent over $1000 in interest in 2019 on my Fed Loan. Ughh, that's not cool.

[NotJen]

I paid mine off within a year after I graduated - they were a big priority.  But, they were only $8k, and my salary was $45k.  I also paid off a $17k car loan that first year, too.  I "upgraded" my lifestyle very slowly after I graduated (though, the new car was a giant improvement in not feeling like a broke student anymore).

[deek]

I paid mine off within a year after I graduated - they were a big priority.  But, they were only $8k, and my salary was $45k.  I also paid off a $17k car loan that first year, too.  I "upgraded" my lifestyle very slowly after I graduated (though, the new car was a giant improvement in not feeling like a broke student anymore).

Dang that would be awesome. I started out at about 28k after graduating in 2014. I'm at 20k. And really want to start speeding up. Only make 40k right now though.

[thesis]

Owed around $30k, paid off in about 2.5 years. I put about half my income into paying those loans off, but I was also living rent free with my parents. In retrospect, I could have paid them off much sooner with more discipline, I guess I just liked blowing money on Amazon and thought that I was still doing really well putting so much into paying them off.

[Boofinator]

I owed $10k upon graduation. I received a $10k signing bonus with my first job post-graduation*, and paid them off immediately.

*Actually, this was my third job post-graduation (about 15 months after the fact), but my first real job; the other two were Subway sandwich artist and handyman helper.

[Cranky]

You have lots and lots of time for experiences later- get those loans off your back.

[jps]

As aggressively as I would act in any other emergency situation.
https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

GET ER' DONE

[Blue Skies]

I paid them off within the first year.  The total was about 1/4 of my gross yearly income at the time.

[mozar]

You don't have to spend a lot on experiences. Some countries have special working visas for people under 30. I did that in New Zealand where I lived for free for two months doing wolfing (willing workers on organic farms)

[ApacheStache]

You don't have to spend a lot on experiences.

Exactly. Just because your friends and peers spend tons of money on "experiences" doesn't mean their experiences are any better than cheaper or free experiences. Spending money and having memorable experiences are not mutually exclusive.

[Loren Ver]

I think it depends on the interest rates, see below:

I came out of school with over 80K is student loans and my first job making 27K.  This was back in 2006 and many were variable interest and were at 9ish percent (scary to say the least).  I consolidated what I could (around 6 percent and lower) and changed them to interest only payments.  I then avalanche paid them off, especially as my income went up and DH found more stable employment.  It took about 7 years to knock out the biggies.

I am now FIREd, but I actually have one last consolidated loan I have not paid off.  I managed to get it reduced to a 1.68% years ago.  It has a few years left and I have been letting inflation eat away at it.   That money is so cheap, paying it off would be a shame.

So my answer would be, it depends :).

Loren

[ixtap]

I had super low interest rates, so I mostly just chipped away at the student loans, usually throwing in small windfalls (ie the decade my parents decided their adult children needed cash Christmas gifts).

Then, one day we realized we were really on a roll on savings and didn't know where to put the cash bonus, so we paid off the remainder in one big chunk just to be done with it.

[LeftA]

Paid mine off in under a year. Owed about $8 or $9K. But my salary was only $31K.

I’d get rid of it ASAP.

[the_fixer]

Owed 50k paid off in 1.5 years in 2001

Easier to pay off right when you get out, you are used to living like a broke college kid so just live on the cheap and pay them off ASAP.

If you wait life happens, you get a house, car, spouse, kids bla bla bla.

Do you think it will be easier to pay them off later once life happens?


Sent from my iPhone using Tapatalk

[use2betrix]

Owed around $32k in student loans and $8k to my parents. Took a few years. I was not a mustachian for a long time. Still am not too hardcore, but better than I was.

[Metalcat]

We just finished paying off 420K in debt in exactly 6 years.
It would have been much faster, but my lucrative career was extremely limited by early injuries.

Along the way we really benefited from learning how to live very richly while spending much less. We've had tons of experiences, but we tend to do more research and hold out for better value.

For example, I'm going to Ireland this year, and coincidentally so are two of my staff members. I make double what they do, but my trip is costing about half of what theirs will for a similar level of luxury, just because I put in many hours of research to find the best value.

DH and I have no shortage of adventure or luxury in our lives, specifically because adventure and luxury don't need to be expensive.

Laziness is expensive. Meaning, just spending what society tells you that you need to spend to enjoy yourself is expensive. Think outside the box and you won't be taxed with the "huh, I didn't think about that option" tax.

[dignam]

I had roughly $25k in student loans when I graduated in 2009.  They were all paid off in 2017.

I did a lump sum payment of about $12k to pay it off finally.  It was a wonderful feeling!

[kpd905]

I had about $100k when I graduated in 2012.  I set a goal to pay them off in 3 years, which no one seemed to believe.  I ended up paying them off in 2 years, 11 months.

Mine were all between 6.8-7.9%, so pretty bad.  I ended up refinancing them to about 4% when I got down to around $40k but just ended up killing them anyway.

[Metalcat]

Ah yes, I should mention that my behemoth student loans were at mortgage level low interest, and if the payment terms had been flexible, I would have paid them off much slower. However, I refinanced the last 200K as a business loan, which had a strict 3K/mo minimum payment, so I was thrilled to pay it off a few years early to get that cash flow monkey off my back.

[skp]

Loans were half my income and I paid them off in 2 years

[mikemagz11]

I graduated with roughly 25k in debt in 2011. Received my masters for free and while I was doing it all my loans had the interest deferred. Paid the whole loan balance in 2018 saving thousands in interest.

[LetItGrow]

I had roughly $25k in student loans when I graduated in 2009.  They were all paid off in 2017.

I did a lump sum payment of about $12k to pay it off finally.  It was a wonderful feeling!

Similar to what we had. Low rates, so just made the payments for a few years, then we moved back from overseas with a lot of cash so lump summed it away.

[sixwings]

I paid my 7K off in my first year and prioritized it over contributions to my TFSA/RRSP(401K equivalent). I'm glad I did.

[Imma]

My interest rates are low because the loans are from the government (as in, less than 1%). I pay the minimum payment every month which is €45. At that rate paying them off will take 9 years in total. I have a big enough stash to pay everything off all at once if that was needed for a new mortgage. Otherwise I'm going to take as long as I can to pay it off. It"s basically free money.

[ambimammular]

Between my DH and I we owed 22K at 3.5%. We reasoned that it was much cheaper money than what we would get long term in our retirement accounts, so paying off slowly was the sensible thing to do. But it still kinda irked me.

Now we've got this fun situation where every dollar my DH spends on alcohol I get to match in paying off the loan. He likes to enjoy life and my non-spender ass can't muster up something to want for my birthday, so this makes a fantastic compromise. He savors the fancy ass bottle of barrel aged stout sometimes, and I chug away at that student loan that bothers me so much.

I only wish we had come up with the idea earlier in our marriage.

[ixtap]

Between my DH and I we owed 22K at 3.5%. We reasoned that it was much cheaper money than what we would get long term in our retirement accounts, so paying off slowly was the sensible thing to do. But it still kinda irked me.

Now we've got this fun situation where every dollar my DH spends on alcohol I get to match in paying off the loan. He likes to enjoy life and my non-spender ass can't muster up something to want for my birthday, so this makes a fantastic compromise. He savors the fancy ass bottle of barrel aged stout sometimes, and I chug away at that student loan that bothers me so much.

I only wish we had come up with the idea earlier in our marriage.

That is a fabulous solution!

[achvfi]

I had close to 50K in student loans with very high interest rates. Once in first job out of college, I put every single dollar I can spare towards them. It took me about two years I think.

I had no car, minimal possessions and lived in a shared rental. I learned to cook and ate at home.

[penguintroopers]

About 45-47k/year. Should be done in September or October.

For encouragement: https://forum.mrmoneymustache.com/throw-down-the-gauntlet/student-loan-challenge-(2020-edition)/

[TVRodriguez]

I paid off ~$70k of loans at high interest rates in 4 years.

Then I married DH, and we attacked his $260k in loans. But we also bought a house and had 3 kids (biological clock tick tock). So his loans took 7 years.

It was always a priority, but we also had other goals along the way.

[Lucky13]

Paid mine off ASAP but I'll have to admit it was also emotional decision, not just financial, I somehow felt I needed to get rid of my student loans to feel like a real adult or something, which in hindsight was silly.  Now I'm more comfortable carrying debt, if it makes sense giving the interest rate and my other goals etc. but in most cases it's better to avoid debt or pay it off as soon as you can.

[MrUpwardlyMobile]

150k in 5.5 years

http://upwardlymobile.life/paid-off-i-paid-my-six-figure-student-loan-debt-in-5-5-years/

[GuitarStv]

I was lucky enough to land a good paying job in university and managed to avoid taking out student loans. . . so, very aggressively?  :P

[Weisass]

Owed around $30k, paid off in about 2.5 years. I put about half my income into paying those loans off, but I was also living rent free with my parents. In retrospect, I could have paid them off much sooner with more discipline, I guess I just liked blowing money on Amazon and thought that I was still doing really well putting so much into paying them off.

Same here. Similar amounts, my partner and I plowed our extra into paying it down to free funds up for other pursuits.

[aku09]

Started with 150k when I graduated grad school 3.5 years ago. Have 75k left. Should be done by the end of 2021.

[Metalcat]

I was lucky enough to land a good paying job in university and managed to avoid taking out student loans. . . so, very aggressively?  :P

Me too for undergrad. Worked full time.
Granted, I'm in Canada and had a scholarship, so it was mostly life expenses and books.

[drunkenNoodles]

Stupid financial decisions led me to deferring and paying minimums for years and years.

When I finally got serious, I knocked them out in about 3 years. I'll never forgive myself for the missed time in the market my money could have spent if I'd paid off loans and invested earlier.

Sacrifice and knock them out SOON AS POSSIBLE. You won't regret it.

[SavinMaven]

I really want to go to town on them, but is it really worth sacrificing experiences while I'm young and before I have a family? I just saw that I spent over $1000 in interest in 2019 on my Fed Loan. Ughh, that's not cool.

Yes. Yes, it is.

Your life won't end when you have a family - you will still have amazing experiences when you're older. But your ability to eradicate your loans when a mortgage, child care costs, and health care costs for a family start piling up? You can sacrifice a little bit now, or a lot later. The less interest you can pay, the cheaper your education will have been. Don't blow this opportunity to set yourself up for a much happier future!

[Serendip]

I had around $32,000 and paid it off in 1.5 years.
It was a big stretch for me since my yearly income is around 30,000 but I  worked extra shifts and spent a lot of time reading people's stories of debt repayment to keep me motivated. It was the best decision and has really freed up my life in so many ways.

[mm1970]

4 years.

I was at $11k-12k.
Interest rates were 8-10% (this was the 1990s).

I made ~$20k a year the first two years, then got a raise to closer to $30-35k.  Don't remember.  I was in the military, some of my pay was not taxable - the $35k is the approximate if it were all taxable.

I lived first in a basement of a  house, with 2 roommates.  Then in an apartment with 2 roommates and then an apartment with one roommate.  I did not rent my own place until I was 2.5 years out of college.

I rarely went out the first couple of years.  I ate at home, joined a cheap gym, and focused on paying off those loans.  I also had a car payment, for a small used car with no AC (in Washington DC!)

Pay off those loans, depending on the interest rates.  Mine were high.

[HPstache]

I'm similar to a few of you.  I did not really think about the interest I was paying until about 5 years in and then I aggressively paid them off.  Graduated in 2007 with $25K in debt, realized what I was doing in about 2014 when I took the Dave Ramsey class with $18K remaining and was completely debt free by 2016.

[Scortius]

My student loan rate is something like 2.5%. I've strung them out as long as possible. I wish I could take out more!

[deek]

I appreciate all the stories. You of all people can understand situations just differ based on the person. Financially, I would love to live with 2 or 3 other people and pay $350 in rent as opposed to $550, but that would drive me absolutely insane. I'm not a huge fan of being around people in general. I care deeply about my 10 ish really close friends, my gf, and my family, but outside of that I just enjoy doing my own thing and not worry about the schedules of others. I currently have one roommate, and it drives me nuts half the time as is. Decent guy, but it just isn't my cup of tea.

I'm less that 2k away from paying off my car I stupidly bought after college (but it HAS been a great car for me, and wasn't crazy expensive). I think I may just get the match on my 401k and start throwing the majority of my savings at my loans - I've been splitting it up between my Loans/nights out with the GF every other weekend/a little extra in my 401k/and my Ally Savings account. But maybe I'll just do this for a few months and see how much ground I'm able to gain - then really think to myself what that long term strategy would do for me. I'm pretty optimistic that it will become a no-brainer.

I'm already not a high spender in any area of my life as is, so sometimes it's difficult to see what cutbacks can be made.

FYI - my Fed Loan interest rate averages out at just below 5% on all my loans.

[Lady SA]

I followed this investment order: https://forum.mrmoneymustache.com/investor-alley/investment-order/

paid off $150k in exactly 5 years using the avalanche method. We also managed to stash $350k for retirement in the same time frame, and we were really, really happy we prioritized saving even when we had debt. Our loan rates ranged from 5.5-4% (so it wasn't hair on fire debt, imo) and we refinanced a few of them with Earnest.

[habanero]

Paid off mine last year after 16 years (3 years remaining). My loan was never big to begin with (about 25k USD, thank you very much free university tuition), had interest rate similar to a mortgage (thank you, government). I had about 20% of the principal left and decided to get rid of it. It was small money and just noise in my monthly cashflow. But despite the utter irrelevance of the whole thing it felt good to wire the payment of the remaining balance. And yes, I know it wasn't the mathematically optimal thing to do but I still did it and don't regret it.

[RWD]

[...] but is it really worth sacrificing experiences while I'm young and before I have a family?

Most of my best experiences when I was young required very little money. Great experiences and paying off your student loans are not mutually exclusive.

I paid off my loans (~$50k) in about 3.5 years. If you have low interest rates it can make sense to invest instead (especially in tax sheltered accounts). Just don't weaken your future financial stability by squandering the money today.

[YoungGranny]

Paid off $18k of student loans in a year after college while making $50k and living in Chicago (so not LCOL). My hair was on fire and after that year I could enjoy experiences AND be debt free.

[SimpleCycle]

Most people on these forums treat student loans as a debt emergency.  But there are important ways student debt is different from other debt.

First, the interest is tax deductible, up to $2500.  I'm going to guess you are in the 12% tax bracket, so it's not a big savings, but you'll pay $120 less in taxes from having the loans.

Second, federal loans have tons of repayment options, especially if they are subsidized loans.  You can defer them for a bunch of reasons, and if you have a qualifying deferment, the interest is paid on subsidized loans.  So don't overlook the benefits of your student debt, in addition to the drawbacks.

Another thing about paying extra on installment loans is that even as you chip away at the total debt, the payment remains the same.  So you don't reap any cashflow benefit until the loans are paid off.

Anyway, all that is to say everyone's situation and priorities are different.  5% is closer to #7 on the investment order than #2 on the investment order.  (10 year treasury yield right now is 1.4%)  I paid off my undergrad loans (3%, about half subsidized) very slowly and my grad school loans (6.5%, all unsubsidized) quickly.

Also, unsolicited non-student loan advice - if you're in a position to save aggressively in your 401k, look into the Saver's Credit.  It's a benefit for lower income folks, but you can drop your AGI with 401k and/or traditional IRA contributions to get to the threshold.

[Just Joe]

We had the price of a nice new SUV in student loans for DW's advanced degrees. That's how I mentally tallied it up. Interest rates were not onerous but let's say close to 10% I think. We also had credit card debt hanging around then too.

This was about the time I started reading MMM. Before I had learned much I called every one of the companies I was dealing with to ask for a lower interest rate. Then ended up using a modified snow ball method ala DR. Then rolled all the debt into one monster nuisance and used peer lending to get a consolidation loan at a fair interest rate that was lower than the interest rates I was paying. It freed up some mental space and gave me one number to attack.

Then we started sending them everything we could plus whatever was left at the end of the month. Maybe two years 'til it was paid off once we got serious.

If our kids ever realize they want to go to university/trade school we'll be able to avoid loans by using an affordable state university and requiring them to get part time work.

 

[Photograph 51]

Once I started working after graduation, I just wanted my loans gone as soon as possible.  When I started working, my loans were at $58,000.  10.5 months later, they were gone.  no regrets.

[mm1970]

I appreciate all the stories. You of all people can understand situations just differ based on the person. Financially, I would love to live with 2 or 3 other people and pay $350 in rent as opposed to $550, but that would drive me absolutely insane. I'm not a huge fan of being around people in general. I care deeply about my 10 ish really close friends, my gf, and my family, but outside of that I just enjoy doing my own thing and not worry about the schedules of others. I currently have one roommate, and it drives me nuts half the time as is. Decent guy, but it just isn't my cup of tea.

I'm less that 2k away from paying off my car I stupidly bought after college (but it HAS been a great car for me, and wasn't crazy expensive). I think I may just get the match on my 401k and start throwing the majority of my savings at my loans - I've been splitting it up between my Loans/nights out with the GF every other weekend/a little extra in my 401k/and my Ally Savings account. But maybe I'll just do this for a few months and see how much ground I'm able to gain - then really think to myself what that long term strategy would do for me. I'm pretty optimistic that it will become a no-brainer.

I'm already not a high spender in any area of my life as is, so sometimes it's difficult to see what cutbacks can be made.

FYI - my Fed Loan interest rate averages out at just below 5% on all my loans.

oh, roommates are the worst, but nobody says you have to like them!

My roommates have included:
Someone who had boyfriends over a LOT, and did whatever they want in our only room, even if I was there.
Someone who would FREAK OUT if she couldn't figure out her homework.  Like cry.  For a long time.
A cutter who dropped out.
A roommate who would cook dinner, make a bunch of dishes, and go stay at her boyfriend's and leave them to fester for days.
A roommate who would complain about the roommate above and tell me to tell her to do her dishes (!!)
A roommate whose parents were really really Christian, so when they visited she would HIDE my birth control pills.
A roommate who was having a rough time in school and was just downright mean.
A roommate who was in law school and was a complete PITA.  We had a cleaning/ yard work schedule, and he would COMPLAIN if, on my yard work week, I paid some kid $20 to mow the yard.  That's the time I had 2 roommates and lived in a really cold basement.  The key to surviving that period of time was to spend most of my time out, in school, or in my room.
A roommate who was mostly great - we didn't see each other much (both working FT and with school at night), but then her boyfriend moved in for three months and ate my food.  When I decided to move out she got nasty.

And NOW!!  Gosh the husband and kids...ha

Now.  I grew up with many many brothers and sisters, usually at least 4 of us living at home at any given time.  I never lived alone until I was 24.5.  I lived alone until almost 27.  To be honest, most of the time after age 19, I just didn't hang with my roommates at all.  I did my own thing.