I honestly have been terrified to write this blog post. Admitting you don’t know everything while building your business and credibility as an expert, takes a certain level of authenticity and vulnerability. However, I had a good friend in my life that encouraged me to be more open.

So you may be asking yourself, how does one get into this level of debt? I would then respond by saying, “going to private Jesuit universities for both a bachelor’s and master’s degrees”. When I graduated with my bachelor’s degree in Marketing, I had about $30k of student loan debt. Thanks to a fantastic benefactor, I received a partial academic scholarship and grants. The real portion of my student loan debt came from my graduate program. While I don’t regret the experience, I wish I would have taken my time to get my second degree. I felt like I spent a good portion of my 20’s trying to speed through everything. But since I was the first in my family to do it, I thought success and graduating had to be done at the same rate and the same capacity as my peers. In hindsight, I wish I would have gone part-time and worked harder in gaining more work experience while letting a company foot some of the bill.

Woosah! Glad I got that off my chest, now I can tell you what I have been doing to crush this student loan debt. My (aggressive) student loan repayment goal is to kick this like Bruce Leroy by the end of 2025.

1. Start adding extra payments to be applied to my principal 

I think it was at least 4 or 5 years, where I was making consistent and on-time payments, and my balance was barely moving. I was so frustrated and angry that I was doing what I thought I was supposed to, and it wasn’t making any real impact. That’s when I sat down one Sunday and started to understand the various interest rates across all my 7+ loans. My undergraduate loans were as low as 4 or 5%, but my graduate loans were closer to 8-9%. And while I was paying on them, the minimum amount was barely and often only paying the interest and never hitting the principal. This realization is when I start setting a tighter budget and cut down some of my discretionary (fun) budget. Then I would take that $75 or sometimes $100 and add it as an additional payment. It made some dents over time, but I was determined to do more.

2. Refinanced my loan with Sofi

Now I don’t think this option is right for everyone, and if your loans are with a federal program, you might lose some of your protections. So I would encourage you to do your research regarding if this is right for you based on your income and industry. In my situation, I felt like I had utilized al the federal program benefits and wanted an overall lower fixed interest rate. Also, my career path and degrees didn’t allow for any chance of student loan forgiveness, so this debt was on me to figure out.

I should also mention that I deferred my loans a few times before I ultimately decided to refinance. One of the times, when I paused loan payments to pay off over $10k in high-interest credit card debt. Once I paid off the credit card, I decided to extend the student loan deferment by six months and stack my savings. I also cut my budget down dramatically. If it wasn’t a fixed expense, I didn’t spend money on it. While this way of budgeting was extreme, it continued to keep me out of credit card debt for years to come and helped grow my emergency savings even faster. Also, once I paid off the credit card debt, my credit score shot up. For context, when I started, my credit score was barely over 500. However, after some sacrifice, time, and sweat (literally), I had finally entered into what I previously thought was a secret society of the 700 credit rating club. Also, my improved credit rating score ultimately helped me get a better loan offer in terms of interest rates with the Sofi student loan refinance program. 

After a significant amount of research and calls with their fantastic customer team, I chose Sofi since they had the best rates and support in case I lost my primary source of income. I also liked that Sofi offered exclusive benefits to members such as career support, events, and resume reviews. They gave me a few offers in terms of loan repayment terms and rates (both fixed and variable). I ultimately decided to go with their fixed 10-year repayment program, which reduced all my loans to a 4.5% fixed interest rate. My goal is to work towards paying the full amount off early, which I will not be penalized for and will save me even more money on interest.

Before I refinanced my loans, I should also note that I took some of my savings and paid off a few of my smaller loans (around $6k). I needed a little extra motivation to continue with the debt payoff journey after building up my savings.

3. Know your worth and ask for 15% more

One of the most significant impacts on my ability to pay down my loans, outside of cutting my expenses was to increase my income. Keeping my resume up to date and being open to making a career move has served me well in addition to ALWAYS negotiating my compensation package. Ok, that’s not 100% true, early in my career I didn’t negotiate, and I know I left money on the table. But I learned quickly how not negotiating can reduce your earning potential throughout your career. When I did negotiate for the first time, I secured a 57% increase in my salary and an extra week of vacation time.

Thank goodness for growth! You may also have noticed I said negotiating a compensation package and not just a salary. Beyond salary, negotiating your vacation days, work flexibility, and a sign-on bonus are often more critical to you accepting a new role. 

Also, can we please let go of the fear that an organization will recede their offer if you negotiate? If a legitimate company has invested the time and resources to interview you, they do not want to go back to the start of the hiring process. When I didn’t advocate for myself in the beginning of my career, I also regretted the decision later on that I accepted an offer that was below my value.

So, where am I now, and what are my plans to crush the remainder of my student loan debt?

My goal is to get my loans under the $100k mark by the end of the year. I’m about $20k away for that, which is impressive considering where I started. I plan on sticking to my budget, which has been going well so far. Mainly in part to a decline in spending on things like travel due to the global pandemic. I’m also planning on ways to increase my monthly income, through remote freelance work and growing my business.

I’m looking forward to manifesting this debt free goal and sharing a quarterly update on my progress.

Was this a helpful look into paying down student loan debt? What are some student loan debt topics you would like for me to discuss? Let me know in the comments or send me a Instragram DM over @leapstepjump.

-Ashley