6 strategies I used to pay off $81,000 in student loans

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  • Melanie Lockert graduated from college with $81,000 in
    student loans, and spent several years paying the minimum amount
    due every month.
  • When she still had $68,000 of debt left after getting
    her Masters degree, she decided to get serious about paying off her
    debt, and implemented the debt avalanche.
  • She then put her energy toward earning more, took
    advantage of any freebies that could lower her cost of living, put
    cash back toward her loans, and adjusted her tax
    withholding.
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When I graduated in May 2011, I was filled with anxiety about my
student loans.

I had just graduated with my Master’s in Performance Studies
from New York University. For my BA, I had borrowed $23,000 and for
my MA I borrowed $58,000. Between graduating with my BA in 2006 and
getting my Master’s, I treated my student loan payment like a bill
and just paid the minimum.

But after several years of payment and taking on more debt, I
graduated and still had $68,000 left. Once I got serious about my
debt and faced my debt head-on, I was able to make progress and
paid off the $68,000 I had left in less than five years.

Here are the six strategies I used to get out of $81,000 in
student loan debt.

1. I used the debt avalanche method

My Grad PLUS loans had interest rates of 6.8% and 7.9%, whereas
my undergraduate loans had interest rates at less than 3% (I can no
longer remember exactly how much). When I calculated how much money
I was spending on interest, it came to $11 per day. After that, I
knew I had to ditch my high-interest debt first.

I used the
debt avalanche method
where I paid the minimum on all my loans,
while throwing extra cash at my highest interest debt — the 7.9%
loans. I continued to do this, until that was paid off, and then
threw extra cash at the 6.8% loans, and so on and so forth. The
avalanche method will help you save money on interest over time,
which can mean putting more toward your principal balance.

2. I made biweekly payments

One thing I didn’t realize about student loan debt is that the
interest accrues daily. In order to combat the interest that was
growing each day, I changed up my strategy. Instead of making
monthly payments as required, I made biweekly payments. I divided
my monthly payment in two and paid that amount every two weeks.
This helped me keep the interest more manageable without even
having to pay more.

3. I put my energy toward earning more

After graduating and not finding a full-time job, I moved to
Portland, Oregon. I cut my expenses in half but still only found
temp work making $10 to $12 per hour. I had scaled back as much as
I could. That’s when I realized if I wanted to make real progress
on my debt, I had to focus on earning more.

I began to side hustle any way I could. I worked as a brand
ambassador, working as the public face of a company at public
events. I pet sat for coworkers, found gigs on TaskRabbit like
helping someone move, and once I found a gig on Craigslist where I
ended up selling water bottles overnight at an underground dance
party.

The holiday season was especially lucrative. I worked for a
wealthy family assisting with their Halloween party. I worked as a
coat check for holiday parties. I pet sat during Thanksgiving and
passed out appetizers during Christmas parties. Any gig I could
find, I’d do. I put all that extra money toward my debt.

4. I took advantage of free items

One way I was able to keep my expenses low was to take advantage
of free stuff. I was lucky enough to get some free samples of soap,
free coupons for food items, etc. with my brand ambassador side
hustle.

I started working as an event assistant for a congregation. From
that side hustle, there were many leftover items of food and wine,
which helped lower my food budget.

If I had to shop and buy something, I researched free coupon
codes by typing “[company] + coupon code”. Taking advantage of free
things helped keep my expenses low.

5. I put my cash back toward my loans

If I had to spend money on something, I wanted to make sure I
was making some money in return. When I shopped online, I used
Ebates, a site where you can get cash back at certain
retailers.

I also had the Capital One Quicksilver card, where I got 1.5%
cash back on all my purchases.

These
are the best cash-back credit cards of 2019 »

I took the cash back that I got from Ebates and my credit card
and put it toward my student loans.

6. I adjusted my tax withholding

Like most people, I was excited every year to receive a tax
refund. But then I realized I’d be better off adjusting my tax
withholding and boosting my paycheck each month. That way, instead
of receiving a lump sum once a year, I’d have more money to work
with each month. I used that extra buffer of cash to put more
toward my student loans.

Becoming debt-free has been one of the great joys of my life. It
wasn’t easy or glamorous. It took a lot of dedication and hard
work. Using these six strategies, I was able to streamline the debt
payoff process and get out of debt faster.


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6 strategies I used to pay off ,000 in student loans