So… I finished paying off my student loans this month. Actually, that’s a lie. I finished paying off my student loans in July 2014. Actually, that is a lie too. It would be more accurate to say we finished paying off my student loan in July 2014. But I was too scared to say so back in July, because I had projected to be finished paying them off this month, November 2014, all by my self. Like a big boy. I think I’m also suffering from PTDRS – Post Traumatic Debt Repayment Syndrome. I’m serious. I still don’t feel like I’m done paying off this debt. I still feel like I am in the trenches everyday trying to reign debt under control. I haven’t even celebrated yet.
The strangest part of this student loan repayment journey has been that I honestly don’t feel like I am done paying. I’m still in the aggressive debt repayment mindset and it feels completely surreal. I’m not just saying that. It’s the strangest thing. Mentally, I still feel trapped in the repayment mindset. That’s why I’ve self diagnosed myself with PTDRS.
I went through 6 years of post secondary education, both at the undergraduate and graduate level. I thought I was going to continue on after my masters degree to get a PhD and become an academic. But after I finished my masters, I had no interest in being an academic. I couldn’t fathom studying in minutiae detail for another 4+ years some subject that no one gives a shit about. I’m pretty sure I was in college for 6 years because I had no idea what I wanted to do with my life.
Anyways, I had been kicking the student loan debt down the line each and every year since the first year of undergraduate. My rationale was “Future Steve will deal with this – time to paaaaaartay!” If only I could smack that younger version of myself right on the side of his head.
I say that, but the paradox is that I wouldn’t trade anything that happened in those 6 years. I got to travel and experience some ridiculously cool places around the world. I got to live in Cape Town and London. I met incredibly cool people, some who have become amongst my closest friends. And etc and etc.
Pay The Piper
But when the music stopped and the party was over, all that student loan debt I had racked up was a complete shock. Seeing a bill for $52,000 is pretty unreal and incomprehensible. It was only after the initial shock wore off that I knew I needed to find a job and get rid of this thing as quick as possible.
I was haunted by an experience in high school: I had an english teacher once comment that she was still in the process of paying off her student loans. I was completely flabbergasted. I was thinking to myself “holy shit, you’re old and you probably make a lot of money – how could you still have student loan debt!?”
Find Any Job
Looking for work was tough. There is another paradox of education. If you only have a bachelors degree, you are nothing special because everyone else has one too. But if you have an advanced degree on top of that, you are nothing special either because you are overqualified. But mainly, it was probably because I had a degree in history, a subject which has absolutely zero real life applicability in business. I should have studied STEM.
It was only after 8 gruelling months that I found the job I’m at today. Those 8 months were tough, especially emotionally. You start to doubt yourself and you get depressed because you wonder WTF all that education was for. When you apply for jobs and hear crickets, it’s crippling on your self-confidence. I felt betrayed. Betrayed by all my teachers. Betrayed by my education. And betrayed by the world.
So once I landed my current job, I held on for dear life. If it was this brutal finding work, I didn’t want to go through that trauma again. I was lucky to find this job. It pays well, my co-workers are all very nice, and the benefits are great. It really was pure, dumb luck that I was able to land where I did. This is where I count my first lucky star.
The Master Plan
This job allowed me to set up an aggressive plan to pay off my student loans. I was going to throw half of my take home pay at my student loans until they were paid off. I originally projected a 3 year timeframe. “Well shit,” I thought to myself, “this is going to be a grind.”
Now comes where I count my second lucky star. Once I passed my 3 month probationary period and knew with a fair level of certainty that I was going to be sticking around, I asked my parents a huge favour. No, it was not to allow me to live with them rent free, which they had graciously allowed me to do while I was looking for work. I asked them if they would consider taking out a home equity line of credit. I would use that to immediately pay off the student loans, which had a 5.5% variable interest rate, and then pay back my parents the HELOC at 3.5% variable interest rate.
They generously agreed. That saved me 2% in interest over the lifetime of my repayment plan. That 2% interest that was shaved off roughly translated into a little over $1000 in interest savings over my entire repayment period – almost a full monthly principle payment. Which meant, time wise, this maneuver allowed me to pay off the student loans just under a month quicker.
Once that was set, I went about grinding out the repayment. Every month, half of my take home pay was transferred to my parents and I got to keep the other half to keep me sane. And my parents allowed me to continue living with them for the time being. Yes, lucky, I know, and I am grateful to them for all their support.
Let me tell you, it was an absolute grind. I’m not going to sugarcoat anything. Serious debt repayment is nothing glamorous: it’s an ugly, relentless battle. Eventually, you get used to automatically putting away half your net income every month and seeing it disappear.
Month-to-month, nothing appears to be changing but as the months roll on, you start to see a bit of progress. You start to gain a little traction.
I got married in May 2013 and moved into our current home with my wife at the same time. This is where I count my third lucky star: my wife. Without her unending support, this grind would have been incalculably harder. Being Double-Income-No-Kids helps too. We never had plans to have kids until our thirties so we are DINKs by design.
Once we were married and our finances combined, I still committed half of my take home pay to student loan debt repayment. And I continued that until I finished paying off the student loans this month. But again, that is a bit of a lie.
This is what I envisioned the student loan repayment to look visually:
But this is what it actually looked like:
But to be completely honest, this is what the numbers each month truly looked like:
Now, there are 5 questions you might have glancing over this table. I will answer them for you.
First, why $8,154.95 in September 2012? Well, since I was unemployed and searching for work for over 6 months, I was granted interest relief on the student loans for a period of 6 months beginning in April 2012. Therefore, I put aside half my take home pay beginning in April and made a lump sum payment of $8,154.95 in September before the interest-free period ended.
This was done for a twofold reason. First, there was no need to pay during this period as there was no interest accumulating on the loan. Second, I could decrease the total amount of HELOC I was going ask my parents to take out by making that big lump sum payment and making the total a $44,000 HELOC to pay back.
Second, what’s with the $3,103 boosted payment in May 2013? I used most of my tax returns, generated in part by my tuition tax credits I had built up over the years, and threw the tax returns at debt repayment.
Third, the weird payment situation from October 2013-January 2014. My parents were away and I made a lump sum payment for both October and November in October before they left and then made a lump sum payment for both December and January in January when they got back.
Fourth, what is with the huge $6,665 payment in March 2014? I got to use up the remainder of my tuition tax credits and I got a really hefty return. I used ALL of it for debt repayment.
Fifth, what’s with the $8,640 payment in July 2014? You’re probably wondering “wait, I thought you finished paying your student loans off this month, November 2014?” I did and I didn’t. Let me explain.
The Logical Decision
When June 2014 ended, I had $8,600 left to pay off. My wife suggested that since none of our money in fixed income accounts were making over 3.5% (the interest rate I was paying on the HELOC) it would make the most logical sense to just use $8,600 we have in one of our savings accounts and just pay off the remainder of the student loan.
That made complete logical and rational sense in my mind, but a small, prideful part of me didn’t want to do that since it would mean I didn’t do it all myself. Which in it of itself is completely illogical since I clearly couldn’t have achieved all of this without the support of my family. But pride is a wonderfully strange thing.
In the end, I swallowed my pride and made the logical decision that my wife suggested, on the condition that I wouldn’t celebrate or write anything until November 2014, the month I projected myself to be done paying this all off. I continued to put aside half of my net take home pay to fill that savings account back up to its original level.
I swear I am suffering from Post-Traumatic Debt Repayment Syndrome as I still can’t comprehend the fact that my student loans are paid off. I sincerely and honestly still feel like I’m in the trenches fighting the debt repayment battle. Maybe it just takes awhile to get over the fact that the aggressive debt repayment mindset has been such an ingrained part of my life for over 2 years.
I guess I can say I am officially done paying off my student loans.
I finished 6 years of academia with $52,154.95 in student loans.
In the end, it took either 2 years and 4 months or 2 years and 8 months to pay off a grand total of $54,027.06 in student loan debt.
Would I ever trade my experiences over those 6 years in college – both undergraduate and postgraduate – to not have had to pay off this debt load? HELL NO! In those 6 years, I learned so much, both academically and personally. I travelled to amazing places, with Africa, Europe, and Asia being highlights. I met incredible friends, some of whom are amongst the closest friends I have today. I wouldn’t trade any of that for $54,027.06.
This isn’t to say that if I were to do it again that I wouldn’t be more frugal and creative, because I most certainly would with hindsight. But no, I wouldn’t trade it for what it was. Because it made me who I am today.
This student loan debt repayment ride was quite the ride. I learned so much. I developed money skills along the way. And it forever instilled in me the importance of paying myself first. Always.
I wrote some previous student loan debt repayment posts here:
- Successfully Hack Student Loan Interest Rates
- Combat Student Loans with Repayment Assistance
- Half Way to Zero
- Student Loan Payoff Visualization
- Student Loan Homestretch
This is the last chapter of my student loan debt repayment story.
I can only hope that this story is in some minor way helpful to anyone in the process of paying off their student loans, or other debts.
- If you are just at the beginning of paying off your loans, check out some great personal finance bloggers like Blonde on a Budget, Budgets are Sexy, Debt Blag, or Even Steven Money (just to name a few), who either have dug their way out of student loan debt or are still in the trenches.
- If you need some places to start on great books on money, investing, and personal finance, check out the list I curate here.
- If you need some motivation, inspiration, and insight, check out some articles written by Joshua Kennon here, here, and here.
- I personally found chronicling the journey here online a powerful reinforcement technique that brought together several psychological mental models that powered me forward month-after-month. If you’re interested in blogging your own money story, check out Bluehost for web hosting.