The 1 Big Reason You're Not Making Progress on Your Student Loans

By Katie Taylor Updated on January 23, 2020

Hey, I know that look. 

It's the face of someone who's been diligently making their student loan payments every month and just realized they don't owe any less than when they started.

It was the panic-filled rage that gave it away—plus the tears. 


Why you're stuck in student loan purgatory

I know you're busy cursing your lender—and maybe yourself—but there are two important things you need to know. 

1. You're not alone.
2. It doesn't have to be this way. 

Just in case you think this is like when your middle school guidance counselor handed you a cute pamphlet but didn't really understand anything you were going through, here's some proof. 

Meet Kaitlin Cawley

Kaitlin graduated college in 2011 and recently shared her student loan experience with Bustle. She took out a $24,000 loan to complete her senior year of college (on top of her existing $67,000 loans) at a 9.25% variable interest rate. She graduated with $95,000 in student loan debt. 

Like any responsible person, she scrimped and saved to make her monthly payments. When it seemed like she wasn't making much headway, she dug into her loan documentation and discovered that of the $18,000 she'd paid toward that $24,000 loan, only $171 of it had gone to the principal. 

If math isn't your strong suit and you're feeling too traumatized to get out a calculator, the devastation is right here: of the $18,000 Kaitlin paid, $17,829 of it went to cover the interest on her loan. 

Let those numbers sink in for a minute.

If you're making regular monthly payments on your loans, there is only one reason you're not making progress. You don't need to take a Buzzfeed quiz or understand the inner workings of the Federal Reserve. It doesn't matter what your Myers-Briggs type is or what you do for a living. 

There is only one reason: you're paying your lender too much interest.

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Break up with your lender

I know your first inclination here is to start sending your lender hate mail. Or at least write a nasty status about them on Facebook, but here's a better suggestion.

You could leave. 

Let us explain. Remember Kaitlin? 

It's clear that she's a smart woman. After all, she graduated from college, got a job, and puzzled through vague loan documentation to figure out how much interest she was accruing per day ($16). 

But even smart people can make mistakes, and she made a big one. It's one you might be making right now, so listen closely. 

Kaitlin stayed. She kept paying those high interest rates on those original loans. She kept working multiple jobs and crying into her ramen noodles, and she didn't have to. Neither do you. 

If you're paying more than 4% interest on any of your student loans, please  please apply to refinance your loans (because watching people pay more than they have to gives us hives)

Kaitlin's $24,000 loan had an 11% interest rate by the time she realized she wasn't making progress. What if she had refinanced for even a 5.5% interest rate? She could have chopped off tens of thousands of dollars in interest payments. Plus her original lender would've had to let go of the 11% interest payments they'd been banking on. 

Would you stay in a relationship with someone that consistently made your life harder and brought you to tears if you knew there were better options out there? We didn't think so.

It's time to break up with your lender. Here's a great place to start

Published in: Refinance, Student Loan Debt

About the Author
Katie Taylor

Katie Taylor is a content writer and editor with expertise in law and policy, finance, and entrepreneurship. She writes for startups and small businesses about everything from bookkeeping to telecom. Her work has been featured in The Washington Post and She is continuing to pay off law school loans and lives in Richmond, Vermont with her wife, son, and an unruly dog. Read more by Katie Taylor