Paying off student loans

Posted: July 6, 2015 in Uncategorized

Last month I finished paying off my student loans, this makes me debt free at 27. I feel incredibly free, like a giant stone has been lifted off of my back. I’m guessing this is kind of what it must have felt like for Frodo to get rid of the ring, but unlike his journey mine was much longer and covered even more distance. Yes I know he had the ring for over 17 years but his journey was shorter, don’t doubt my nerd cred. I wanted to share a few things; first a bit of my story, some numbers, some of the ways I paid this off quickly and my finally my thoughts on the higher education crisis in the United States.

My Story + Numbers

First off I know I come from a more privileged background than others, my parents weren’t monetarily wealthy but they were full of a wealth of knowledge like how to make a dollar last and how to live well below your means. They also taught me that owing someone something is not a good thing. With that knowledge, the few thousand dollars they gave me upon graduating college (which they had been growing my entire life) and two years after graduation my dad “selling” me his car they helped me on my way.

Let’s talk about student loans. I applied for my loan as a 17 year old kid in late 2005, everyone loaned money back then, the economy was great! I was fortunate that at 17 I didn’t have to have a cosigner, so I signed my life away taking out $77,000 to live my dream. Here we find my first complaint about student loans, sure they let me go to college and live my dreams, I’ll always appreciate that. But as a 17 year old you have no clue what $77,000 is, you don’t understand it, and if you do understand that kind of money at 17 then this essay probably doesn’t apply to you. It was just a number to me, Future Grant’s problem. So I took the loans and I was grateful to have gotten them. Here is how the loans broke down.


I received three Federal Stafford Loans at 6.8% interest. Fun fact that is 0.2% less than GM was charged by the Federal Government. That’s right I borrowed $11,625 and they borrowed $46,500,000,000 (that’s billion by the way), kind of the same. Federal loans in 2015 go between 4.29%-7.21% depending on many different variables.

I received two private loans, the second of which I was very fortunate to have received a low interest rate of only 2.5%. But there is a catch! What they don’t tell you about private loans is that they start accruing interest long before you start paying them. After I graduated in 2008, I had 6 months before I had to start paying back my loans, this buffer period was enough for me to understand how little money that would leave me with. The day I was told to start paying back my loans I got some extra info dumped on me. Private loan one had already accrued $3595.73 and private loan two had already accrued a whopping $4850.86, for a total of $8446.59 in interest. Unknown to me while I was still in school my private loans were accruing interest, and worst of all that information was obfuscated. WELL THAT WAS A SMACK IN THE FACE. “Congrats on graduating, investing in your future, now go live the American dream!” “YAY!” “Oh yeah, it is 2008, the economy is in the dumps and you owe a ton of money already. Have fun!”

Now once again I was very fortunate that I found a job right out of college that paid pretty well for a 20 year old single kid. I decided right away that I would continue to live below my means for as long as it took me to pay off my loans. But of course that didn’t mean I wouldn’t enjoy life, I budgeted myself, had fun, traveled overseas, enjoyed my hobbies, but always the beast was on my back to pay it. So on I fought. Initially my monthly payments hovered between $750-800 a month, that was a ton. Then I met others who made my monthly look like a joke, friends who had borrowed $100k who were paying well over a thousand dollars a month in student loans.

I noticed something as I was paying though, most of my money wasn’t going towards my loans, it seemed to be going towards my interest, especially that big chunk that I started out with. So I made the decision that I was going to pay off the high interest ones as quickly as possible. In 2010 I was able to pay off my federal loans in total. Two years and over $14,000 paid back (including interest) I was pretty proud, but then I looked at the beast of the private loans and wept, how would I slay them. So I went back to it. Again I was fortunate, I got an even more amazing job, I was making well over the average for people my age in 2010-2011 so that helped out a ton, but I still tried to live cheaply. Most of my spare money went to either travel or loans. Travel can be extremely inexpensive by the way. Finally in June of 2015 16 months after starting my third career job, and almost 7 years to the day of my graduation I became debt free. Years of being tight with my budget, three different jobs (each one giving me a significant financial boost), driving an old car, and buying used; had finally paid off. Below are the final figures for my loans, interest and final amount paid back.


I accrued this data off of the student loan site, there is low probability I missed one or two numbers, so it could be off by $200-500.

Wait what, I payed back a 15 year loan in less than half the time and I still paid $20,000+ in interest!?!? That seems a bit extreme, can you imagine how high that would have been if I had been paying the monthly minimum for 15 years? My quick math says it would be about $48,000 in interest paid.

How I did it

I posted about paying off my 15 year loans in 7 years on Facebook last week and I got tons of comments asking “How did you do it? Can you give me tips?” and other comments in the same vain. So here is a simple list of things I did that helped me pay it off. Some are easy to adapt, some are funny, some are just how my life turned out, but all are true.

  • If I couldn’t afford something, I didn’t buy it.
  • The first two years out of college I had an amazing roommate who drove me around and took me wherever I needed to go. Luckily we worked together and hung out together a lot. I also didn’t have a car in college so I saved a ton of money on car payments, insurance, gas.
  • I bought an old car off of my dad for almost nothing, so I had no car payment and I was able to pay the minimum on insurance (this can actually save you a ton).
  • I didn’t drink soda. Seriously this will save you so much money.
  • I used the library, I got tons of free books and movies this way.
  • I used free software, seems like this might save you a little but it turned out to be a lot.
  • I got a stomach parasite in June 2009, this wrecked my life, destroyed my body, my intestinal track, gave me a chronic illness and has caused me problems to this day; but it saved me money. While I have spent thousands on treatments and medications in the last 6 years, it caused me to make lifestyle changes that saved me money. I couldn’t drink alcohol anymore, and there were very few things I could eat when going out. So I saved a ton of money by not spending much while going out. There were many nights my friends had a $50 bar tab and I had a few waters.
  • If I couldn’t afford something, I didn’t buy it.
  • I went dumpster diving. Three of the places I have lived had a clear view of the dumpster, some would say this sucked, I loved it. To this day most of my belongings came from the dumpster, an old woman who gave me a bunch of free things, or other second hand ways (friends, yard sales). Use common sense when dumpster diving, don’t take nasty stuff or something like a mattress.
  • I sold off most of my “collections”. Anything I had collected as a kid, I sold off.
  • If I couldn’t afford something, I didn’t buy it.
  • If there was something I really needed I saved up for it until I could buy it in cash.
  • I only used a credit card for big purchases (over $200) to get reward points, then immediately (the next day) went and paid it off in full (because I had the cash). I then used the reward points for free flights!
  • I had roommates who I shared things with. I didn’t own a TV until 2012 because I just used my roommate’s.
  • I picked the games I bought on steam sales 😉 I also waited to buy games until they were on sale.
  • I ate only what I needed. Because of my sickness I have a very basic diet, and luckily it isn’t an expensive one to keep up.
  • If I couldn’t afford something, I didn’t buy it.
  • I never went in to any other form of debt, this allowed me to focus my payments.
  • I had a budget, and I always budgeted extra to paying off my student loans.
  • I saved up for a year + for every major trip I took. I traveled a lot, but most of my travels were domestic and inexpensive. Every few years I like to take a big trip somewhere, but I always give myself a budget and raise that much money before I go. This has also led to some of the most amazing stories of my life, traveling on a budget lead to those great stories (sleeping under a bridge in New Zealand for example).
  • I threw myself into my career, this in turn saved me money because it was a lot of my free time.
  • I dated but we were frugal as a couple, we found ways to make the amount of money we spent feel like riches. I poet I dated even wrote a poem about how frustrating it can be to date someone who is frugal (badge of honor?).
  • I constantly reminded myself of what it would be like to pay off that last loan.
  • I picked the highest interest rate loans first, these also happened to be the smaller loans.
  • I picked the smallest loan to pay off first, this gave me a big win and I felt like “I CAN DO THIS!”
  • I kept reminding myself I could do it.

Begin Rant (warning some politics)

So here is where my facts end and my thoughts begin. While I’ve paid off my loans, I don’t think what I did was right, yes it was correct for me to pay back my money, but it isn’t right that a young person has to take out so much money to get an education in this country and it is getting worse.

  • The cost of education is extremely high. Too high.
    • The reasons for this are clearly documented so I won’t get into them, but this is of course the the root of the problem. While writing this I looked up the cost of a 4 year undergrad at a big private university and it is running $50,000 A YEAR. That means you could potentially graduate with $250,000 in debt for your undergrad.
    • There is nothing else IN THE ENTIRE COUNTRY that has inflated as quickly as the cost of secondary education. Since 1970 there has been a 994% increase in the cost of education. Going back to the “having a job in college” the federal minimum wage has only gone up 353% since 1970, so you can see how that wouldn’t help at all with this inflation.
  • The expectations that people will get scholarships is insane.
    • I remember working for hours on scholarship applications, and I received nothing. Hundreds to thousands of people are applying for every scholarship, so the chances of everyone offsetting their costs this way is just crazy. (NOTE: I didn’t get any scholarships because the school I went to had weird accreditation and at the time was called “Full Sail Real World Education”, it is now a University)
  • “Well I worked two jobs to pay for school!”
    • I wish I could have worked a job while in school, but I went to an accelerated program so I was doing schoolwork 80hrs+ a week. Also even if I could have had a part time job it would have maybe covered my housing, but nothing close to the cost of tuition.
  • I’ve heard complaints on the news for the last seven years about my generation not contributing to the economy, but how are we supposed to contribute to the economy with this beast on our backs. How am I supposed to buy a house when I already own a house load of debt. Having less initial debt pumps more money into the economy.
  • Getting loans at these interest rates kind of seems ok, until you think about the fact that we are charging interest rates on an investment in our future, we are punishing kids for wanting to better themselves.
  • These so called “low” interest rates are 2-3 times as high as most home or auto loans.
  • The federal loans had some benefits over the private loans, but their interest rate was higher. The good news though is with current legislation these loans would be more valuable to students then the private loans.
  • I like to call the private loans predatory loans because that is exactly what they are. They shouldn’t be allowed to charge interest until after you graduate, that few years of relief would be huge. We give better grace periods on cars and appliances!
  • If the cost continues to go up, fewer and fewer people will even want to go to college. Why would you? You can go out, get a decent job, and start earning right away! Sure your earning potential is less overall, but with $200,000+ of potential debt looming over you and your parents maybe it is worth it?

There has been a lot written by smarter people than myself on how to solve this very serious problem, and I won’t presume to join their ranks by adding my thoughts. But what I will say is this is not only a huge problem for the youth of today, but also the youth and adults of tomorrow. This problem is trending to become the next financial crisis for this country, and if you think about all of the other knock on effects it could end up being more than just a financial crisis.

Let me end by saying the obvious, I’m incredibly blessed/fortunate to be where I am today. I worked hard for it, but I also had some great breaks along the way. I’m also incredibly thankful and happy with the education I got and it was more than worth the sacrifices I made because it got me where I am today in my dream job. My education and university also helped me get a dream job right out of college and I’ve been fortunate to have gotten to do what I love for the last seven years. But that doesn’t matter, this is unacceptable and at the rate it is going my 1 year old nephew will be paying $500,000 for his college. My last word, college in the USA is expensive, and that expense puts an insane amount of pressure on our young people throughout their earliest parts of adulthood, it is time for a change so all can have a chance for  “Life, Liberty and the pursuit of happiness” and the American Dream.

  1. Shannon says:

    That’s amazing, Grant! I seem to find myself in the same situation, ha and, like you, have been very frugal. You give me hope for the future! Congrats and enjoy your debt free living! 🙂

  2. Michael says:

    “You’ve done a man’s job, sir.” Sorry… random nerd quote of the day complete.

    Grant, this is amazing dude, and truly inspirational. Thank you for posting. I think there are a lot of us who can identify with you and are fighting on to make it someday too. Now go, live a well deserved rock star lifestyle (one that you can afford). You’ve earned it man.

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