How These 4 People Paid Off Their Student Loans Before 30
Despite rising tuition costs, getting a college education is the best possible way to make a better living. On average, college graduates earn 56% more than those who only get a high school education, according to data compiled by the Economic Policy Institute.
But post-college graduation, there tends to a rude awakening: Graduates today are saddled with an average of $37,172 of student loan debt, and it takes the average borrower 19.7 years to pay off their loans.
However, it's not impossible to pay off your loans before age 30. Here's how four people managed to do just that
1. The graduate who focused on earning more
After coming to terms with the fact that she was $38,000 in student loan debt, Michelle Schroeder-Gardner paid off her loans in just seven months. As CNBC reported last year, she focused on taking up side hustles during her free time to earn more money, rather than cutting expenses.
"Usually there's a limit to how much you can save," when you cut expenses, Schroeder-Gardner, who earned two bachelor degrees and a master's, told CNBC. On the other hand, "There's no limit on how much extra money you can make in your spare time."
Her biggest side hustle was earning money from her blog, Making Sense of Cents, from which she eventually began to earn $100,000 a month.
2. The graduate who moved back home and cut his expenses
Earning just $48,000 a year didn't stop Phil Risher from paying off his loans in record time. To pay off $30,000 in student loans, Risher, who was working at a car rental company, moved back home, explains The Penny Hoarder.
It wasn't easy. In fact, his father and stepmother wanted to charge him rent. But he negotiated, explaining that his plan was to be aggressive about budgeting in order to pay his loans. He agreed to do chores around the house in exchange for free rent.
In addition to living rent-free, Risher maximized his budget by eating out only once a week and finding free activities and events. He was also smart about how he paid off his loans, tackling unsubsidized loans first since interest began accruing right after graduation. It took Risher just 12 months to pay off his debt.
3. The graduate who refinanced and consolidated her loans
Jessica Elberfeld was $113,019 in debt after graduating from Belmont University. As The Balance explains, like other borrowers in the same position, Elberfeld made it a priority to cut down her two biggest expenses: rent and transportation.
But she also took an extra step that many graduates don't think of. She refinanced and consolidated her loans.
The interest rates on Elberfeld's loans ranged from 6% to 10.75%. Elberfeld refinanced her loans at 2.85%, thereby cutting her expenses. But she continued to make the same loan payment each month. This meant that she was paying more toward her principal loan amount and chip away at her debt a lot faster.
See also: Should I Refinance My Student Loans?
4. The graduate who moved abroad
It may seem like traveling is out of the question when you're stuck with thousands of dollars of student loan debt. But Lauren Kubik used the opportunity as an advantage.
As a recent graduate with $30,000 in student loans, Kubik moved to Korea to teach English, she wrote over at LearnVest, where she was able to save much more than she would have in the U.S.
"On top of teaching English to enthusiastic little kiddos, I had job security, good income, health insurance, paid vacation, and minimal expenses," she wrote. "Plus, the job included round trip airfare and free rent, making it simple to save and pay down debt on a salary of about $2,000 per month."
After two years of teaching English in Korea, Kubik paid off $10,000 from her student loan debt by paying about $500 each month. In the years that followed, after moving back to the U.S., she cut down on her expenses by buying second-hand and increased her earnings by taking extra jobs. She made her last loan payment at age 27.