Let’s just cut to the chase. We both know why you clicked on this post — and yes, it’s true! I really did pay off $133,000 of student loans in seven years. Well, it was actually $110,000 in loans and $23,000 in interest. If you break it down, that’s about $19,000 per year. And I still managed to eat more than just ramen noodles, take vacations and start a family.
So, how did I do it? And more importantly, how did I do it without going crazy?
Before we talk about how I got to this point, we need to talk about what came first — how and why I racked up $133k of debt so quickly.
I graduated from Yale’s School of Nursing in 2011 with my master’s. Before that, I studied violin and Italian Literature at the University of Connecticut. I was fortunate enough to have scholarships at UConn and thanks to that plus generous parents, I entered my nursing program at Yale with zero debt. Ivy league tuition is nothing to scoff at, and all my student loans came from my master’s entry NP program.
By the time I graduated, I had $110k in loans! $20k in credit card debt between myself and my husband and 2 car loans.
FIND YOUR ‘WHY’
That amount of money is enough to make any new graduate sweat. But fortunately, I had a plan. And clearly it worked!
Now, my life looks a lot different than it did when I first graduated. All my student loans, credit card debts and car loans are paid. I’ve dropped down to working less than part-time, and (prior to taking time off with my youngest daughter) I had doubled my NP salary. And, of course, I started a family.
It’s a lot of work, but with enough motivation and determination, you too can be debt-free and in control of your own life! (Please note: I’m a NP, not a financial advisor. For guidance on financial planning, please contact a professional).
When I graduated, my priorities looked a lot different than they do now. I wasn’t married then, and at that point, I was content with working full-time. Now, it’s spending time with my husband and our girls that motivates me.
FOUR SIMPLE STEPS TO PAYING OFF YOUR STUDENT LOANS
So, what motivates you? It could be your desire to only work when you want to, to be able to take vacations, to start a family, retire early, pursue a side hustle, or even just to buy fancy things — and actually own them!
There is no wrong answer. There is only yours. So, what is it that motivates you? Let’s keep that in the forefront.
Step 1: Make More Money
Next, if I had to further simplify these simple steps, I’d start with the simplest of the simple — in order to put more money toward your student loans, you need to make more money.
Of course, that seems obvious, and it might feel easier said than done, but fortunately, there are ways to make more money without changing jobs. Here’s what I did.
- Volunteer for night and weekend shifts or the shifts spanning the holidays. The hours aren’t easy, but putting in the time now will mean you will get those hours back when you retire early!
- Get a second job. Or work on getting a higher-paying job all together if that is a better fit. If you are able to dedicate more time to working and you feel that you can do so without burning out, look into another job or even building a side hustle.
- Sell things around your house. When I was in the throes of trying to pay down my debt, I went shopping around my house. I was amazed at how much stuff I had accumulated. I turned those unnecessary things into cash, which went directly toward my student loan debt.
Step 2: Spend Less Money
The next one might also seem obvious, but for some people, it’s really hard. In order to free up more money to put toward your student loans, you have to be willing to spend less money.
I’m a big fan of budgets. I keep track of where every dollar goes, and I do that on a monthly basis. My budget changes every month based on the income and the surplus that I know we’ll have. If every dollar has a job, it’s a lot easier to come up with a plan for the extra money that you might have.
- Take an honest look at your spending over the past three months. Evaluate where you can cut back. When you have not a lot of debt and a handle on your finances, it opens up some freedom for you to make some decisions without stress.
- Cancel subscriptions you don’t use. Are you buying clothes you don’t wear?
- Hold off on retirement contributions until your debt is paid (unless there is a match).
- If you are in a position to do so, get a roommate, downsize, or move to an area with a lower cost of living.
- Again, if you’re able, sell your car to get out of your lease or a loan you can’t afford. Use some of what you make back to purchase a less expensive car and put the rest toward your debt!
Step 3: Evaluate Repayment Options
The third tip is something you might not have considered — look at your repayment options.
Without repayment options, I would likely still be paying my student loans down. Because of that, one of my biggest pieces of advice is to try to get some of your loans forgiven in some way or to find someone else to pay for your tuition — even if that means taking a job at a hospital with a better tuition reimbursement.
Here are some of the most popular repayment options for nurses:
- Public Service Loan Forgiveness (PSLF)
- Perkins Loan Cancellation
- HRSA Nurse Corps
- Income-Driven Repayment forgiveness
- Military repayment
- Tuition reimbursement/repayment (employer)
- National Health Service Corps Repayment (NPs only)
- Additional state-based options
Perhaps the most common repayment option is public service loan forgiveness — which requires that you make 120 on-time payments while working full-time in a public service job. It’s a big commitment, but at the end of the 10 years, the remaining balance is eligible for forgiveness. I’ll be totally honest in that I don’t love this option, as there are many reports of those who have been misguided and not been granted forgiveness despite following the guidance they were given.
If you took out loans prior to 2017, there’s a chance that you may have a Perkins Loan. These can be forgiven after 5 years of full-time employment and a percentage is cancelled each year after you provide proof of employment. Additionally, payments are deferred during this time.
The HRSA Nurse Corps is an option that I strongly encourage you to look into, especially if you have a high debt to income ratio. This is personally the loan repayment that I was granted. This program is for RNs, APRNs, and Nurse Faculty working in Critical Shortage areas. Loans must qualify based on having been used exclusively for nursing education and awards are based solely on financial burden. If awarded the loan repayment, you may get up to 60% of loan balance paid in exchange for 2 years of full time service.
Step 4: Decide on a plan
Lastly, and most importantly, decide on a plan and stick to it. If you decide to go the public service loan forgiveness route, make sure you are able to commit to 10 years of full-time work.
Whatever you decide, you want to be sure to consider any other life plans you may have. You don’t want to agree to 10 years of full-time work only to find out that you need to disqualify yourself down the line and waste the time you spent putting into that plan. And keep track of your progress! To see the needle moving is one of the best ways to stay invested.
WHEN WILL YOU START?
Looking back, some days I think about those 7 years that I could have been sinking that money into a retirement account that could be growing. But most days, I just think about how worth it all the extra hours and side hustling and planning were. I can’t put a price tag on the flexibility to be home with my girls!
The sooner you get started, the better. Maybe it will take you longer than seven years to pay off your student loans. Maybe it will only take you five! It all depends on how motivated you are, how much debt you have and how aggressive you want to be with the process. But the important thing is to make a plan and stick to it — both for yourself and for your goals.