How I Paid Off $26,000 of Student Loans in 3 Years (2024)

I’m excited to share another debt payoff story with you all today.

Today’s guest paid off $26,000 of student loan debt in 3 years. Awesome!

That’s just about average for student loan debt so I think a lot of people can relate to this story.

To see the student loan average by state, check out this article from USA Today.

If you have a student loan debt payoff story or you are an entrepreneur, we’d love to feature you on Feature Friday.

Learn more here: Get Featured on Millennial Boss

1. What was the total amount of debt, type of debt, and how fast did you pay it off?

I graduated with my Masters in Accounting and paid off $26,000 in student loan debt in 3 years. I was on a 10 standard repayment plan.

2. How did you acquire the debt in the first place? Do you regret doing so?

I acquired the debt when I decided to pursue a Masters in Accounting. The program took me about two and half years because I had a Bachelors in Communication so I to take some prerequisites before getting into the actual program. I don’t regret taking the student loans because I was strategic. When you get to grad school, your “free money” (Pell and SEOG grants) options are limited. You could apply for scholarships but those options are limited as well. I also don’t regret the loan because I got a return on my investment right away. My income increased by 55% same year I graduated.

3. Describe the moment you decided that enough was enough, you needed to pay off your debt.

I don’ like debt. I feel like debt is the reason why many of us keep working. I just felt like I didn’t want to be entangled in debt the older I get. I didn’t want to keep paying student loans I had acquired in my 20’s when I’m 40 or 50.

4. How did you end up paying off the debt? Please be as specific as possible. Describe the choices you had to make during this time. Did you have a good quality of life?

There is truly no debt pay off story without any sacrifice. I had to make a conscious effort to not increase my lifestyle choices.

I kept my rent low ($850) and was able to work a deal where my landlady gives me cable and internet.

I also didn’t buy a new car. I drove my Camry 1999 (paid cash) for nine years (2008- 2017). I also didn’t purchase full coverage which saved me a lot of money.

I only just got a new car funny enough 2 weeks after paying off my student loans because someone hit my Camry while it was parked outside.

The insurance company deemed it a total loss and I had to get another car. Guess what? I still didn’t get a new car. I settled for a used Corolla and paid $5,800 in cash.

I also had some help from an unlikely source.- my employer. My employer gave me tuition reimbursem*nts after one year of working there and this reduced the loans in the first place.

The word “good” is relative. Did I miss out on some things while paying off the loan, yes. But it wasn’t so bad. You can catch up what ever you missed out on while paying off debt when you’re done paying off your debt.

5. Did you have a plan for paying off your debt that didn’t work. Why did it fail?

No, I didn’t. My plan worked as intended. My monthly payment was $294 which I paid 35 times and my 36th payment was a lump sum of the balance.

Related Post: How I Paid Off $89,000 of Debt in 18 Months

6. Can you describe a time where your friends, family or significant other challenged your plan to pay off your debt? How did you deal with it?

Actually, my friends challenged my plans unknowingly They sometimes teased me about driving a Camry 1999 because they felt I could do better in a brand new whip. Living in New York is expensive. A brand new car would have increased my expenses and moved me further away from my goal of getting rid of my student loan debt.

7. Describe the moment that you made your last payment on your debt. When was it? What did it feel like?

I made my last payment at approximately 9:00am on April 28th (my birthday) and it felt like a huge weight had been lifted off my shoulders. It was the best birthday gift I could give myself. Of course this moment was relieved the following month when I didn’t have to send in a payment.

8. What’s next for you now that you are debt free?

Now, that I’m debt free, I’m staying away from more debt and making more money!

9. What resources (books, blogs, videos, podcasts) inspired you as you were paying off your debt?

The Richest Man in Babylon is a great book I highly recommend for everyone. Reading other people’s debt pay off stories from various sources kept me motivated. It was kind of like; if they could do it, so could I.

10. Please tell us a little about yourself in a few sentences.

My name is Ogechi, founder OneSavvyDollar a website that allows you find companies that will help you pay for school (www.onesavvydollar.com) I’m a passionate speaker and blogger of personal finance and career success. I’m always seeking ways to make people’s personal financial life dramatically simpler, more convenient, less intimidating, more fun and fashionable. I can be emailed at [emailprotected]

If you have student loan debt, you may want to check out SoFi, which is a student loan refinancing company. If you can get a better interest rate, you may be able to save thousands over the life of the loan. My (Millennial Boss)’s interest rate was 6.8% and I wish I hadrefinanced that down when I had the chance.

Fill out the SoFi survey here to see if you qualify. We’ve already helped hundreds of readers refinance their student loans.

Want to be featured on the next Feature Friday?

If you have a student loan debt payoff story or you are an entrepreneur, we’d love to feature you on Feature Friday.

Learn more here: Get Featured on Millennial Boss

Did you have student loan debt? How did you pay it off?

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Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle.

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FAQs

The standard repayment plan takes 10 years to pay off a student loan.

Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones. ED will continue to discharge loans as borrowers reach the required number of months for forgiveness.

On average, people with student loans have spent just over 21 years paying back their loans. Federal student loans offer repayment plans that last from 10 to 30 years. Private student loan repayment terms vary.

The monthly payment on a $25,000 student loan ranges from $265 to $2,245, depending on the APR and how long the loan lasts. For example, if you take out a $25,000 student loan and pay it back in 10 years at an APR of 5%, your monthly payment will be $265.

The maximum repayment period is 25 years. After 25 years, any remaining debt will be discharged (forgiven). Under current law, the amount of debt discharged is treated as taxable income, so you will have to pay income taxes 25 years from now on the amount discharged that year.

Most borrowers have between $25,000 and $50,000 outstanding in student loan debt. But more than 600,000 borrowers in the country are over $200,000 in student debt, and that number may continue to increase.

Private student loans don't go away unless you pay them off, but in most cases, they'll fall off your credit report after seven years. But keep in mind that lenders can still contact you to collect an old debt, even if it's decades old and they can no longer take you to court over it.

It typically takes between 10 and 30 years to pay off a student loan balance, depending on your loans' interest rates, balance owed, annual income and repayment plan. Your chosen repayment plan greatly influences how long it will take to eliminate student loan debt.

Some drawbacks of federal direct loans are that there are no subsidized federal direct loans for graduate students, borrowers who default or become otherwise unable to repay their federal direct loans will not be able to escape them by declaring bankruptcy, and undergraduates who apply for direct unsubsidized loans and ...

It takes 10 years to pay off student loan debt on the standard federal loan repayment plan. However, some undergraduate borrowers may be able to pay off student loans faster by making larger payments.

For example, if you had $30,000 in student loans at 7% interest and a 10-year loan term, your monthly payment would be $348. Over the life of your loan, you'd repay a total of $41,799; interest charges would cause your balance to grow by over $11,000.

More than four in ten students at public four-year universities complete their bachelor's degree with zero debt. Nearly eight in ten students graduate with less than $30,000 in debt.