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Paying off tens of thousands of dollars in student loans doesn’t have to be a life sentence. Take it from these three former borrowers, who each found creative ways to free themselves of educational debt in less than five years.
Here’s how they did it, in their own words.
1. “I Got A Job Overseas”
—Thomas Minter, 33, Engineer, San Francisco
Thomas’s story: I finished school with massive debt—$80,000 in student loans, to be exact. After exploring the interest rate details on my first few loan bills, I knew that if I ever wanted to achieve financial independence, I would need to get serious about paying off my student loans, fast.
How he did it: I’m an ecologist by training and never thought I’d follow my passion to the Middle East. But then I got a job in the Eastern Province of Saudi Arabia, working on a large-scale coastal restoration project, and just like that, I went from a $40,000 annual salary to $90,000 that year, and then up to $120,000. My employer covered most of my expenses—including lodging and car—which allowed me to save, on average, 80% of my salary.
Inside tip: Insanely beneficial tax advantages exist while living and working abroad: As much as $100,000 of income may be excluded through the Foreign Earned Income Exclusion Tax Credit, according to the IRS: If you were physically present in a foreign country for at least 330 full days during any period of 12 consecutive months. As always, be sure to consult a tax professional.
Life after debt: [The final payment] was an automatic payment, but when the confirmation email came through, I literally giggled with excitement. I felt as though a world of opportunity opened up for me. It also made me think about where I would be, financially, if I did not have to pay back the loans and could have put the $80,000 into an investment portfolio!
2. “I Still Lived Like a Student”
—Kevin Han, 31, Lawyer, Minneapolis
Kevin’s story: After graduating from law school, I paid off $87,000 worth of student loans in 2 and a half years, by setting a goal to pay off my student loans as fast as possible.
What he did: I started off my career at a large law firm—‘biglaw,’ as we say in the legal world. I was tempted to keep up with my attorney peers, living in a luxury apartment, upgrading my wardrobe, going to fancy restaurants. It’s amazing, but every single new grad always seems to immediately upgrade their living situation. Instead, I lived like a student, in a “normal” apartment, in a college neighborhood.
Inside tip: I saved money by biking to work, instead of using a car. College students are awesome at figuring out ways to get around without a car. In my neighborhood, I see students walk, bike, skateboard, and rollerblade.
Life after debt: Once I paid off my student loans, I was able to take a new job that I thought would be a better fit and that paid $50,000 less than what I made as a biglaw attorney. Paying off my debt bought me freedom and flexibility to try things out in my career.
3. “I Moved Back Home”
—Danielle Desir, 27, Writer, Bridgeport, Connecticut
My story: I paid off $63,000 of student loan debt in four years by living at home with my mom and substituting rent for making extra monthly payments.
What she did: I lived on campus throughout undergrad, but my mom and I have always had a strong relationship, and that continued after graduate school when I moved back home. Her only ask was that I touch base with her with a “simple” text message if I would be out late. I was able to save about $1,600 each month by not paying rent; these funds went straight toward paying off my debt.
Inside tip: I used the “snowball method” of paying off debt—keeping my morale high with quick wins by paying off the loans with the smallest balances first. I also made a few large payments a year, using any savings I’d accumulated: I would see a dramatic decrease in my principal amount, and as a result, my interest per day would decrease as well. I also took advantage of the 0.25% interest rate reduction when I signed up for auto-pay.
Life after debt: I cried tears of joy that I was finally free from the financial burden that came with debt. It felt like a heavy weight was lifted off my shoulders.