Student Loans – What I Learned

5 Things I Learned Paying Off $200k in Student Loans With My Wife

My wife and I graduated from undergrad and graduate school with a combined $200k worth of student loans. Her portion were private loans from a Nursing undergraduate degree and mine were federal loans from my DPT degree. We both knew that we would be taking on loans to obtain our desired careers and we both knew it would be an uphill battle paying them off in the years following graduation. As with many in our professions though, the financial aspect of deciding our careers was runner up to the emotional side of getting into a career to help others in need. My wife graduated from John’s Hopkins nursing school in 2011 and I graduated from University of Maryland-Baltimore’s DPT program in 2012.  Being 10 years removed from school and now student loan free, here are some things I learned along the way.

It is Mentally Exhausting

Navigating student loan payoff is tiring.  Whether it is looking at the loan balance that feels insurmountable, hearing half your friends tell you it is good debt and the other half saying debt is the worst thing possible (and you partially agree with both) or the guilt that you feel spending spending money on items other than paying down your loan, it can wear you down quick. The mental exhaustion can quickly lead to you straying from a plan, making poor decisions and further complicating your situation, ultimately delaying your payoff.  Reducing the mental fatigue, because you will not completely eliminate it, is typically eased by the following 4 things I learned below.

Understand The Numbers and Terms

Principal balance, interest rate, compound interest, amortization, fixed versus variable rates, private vs federal loans, etc. Until you truly understand and appreciate what you are paying every month, you have no clue how MUCH you are actually paying or what options for payment plans makes the most sense for you.  I always knew my interest rate and loan balance, but I was still mindlessly making monthly payments for a year until I started to look for a house to buy and realized how my loans affected nearly all aspects of my life and not just my monthly cash flow.  Learn the terms, run the numbers and make it personal.  It may be a tough pill to swallow, but it is one that needs to be taken. 

“Perfect” Repayment Plans Looks Different For Everyone 

I have friends who are seeking income based payment plan forgiveness in 20 years, Public Service Loan Forgiveness in 10 years, paying down using a standard 10 year plan, paying off in less than 2 year due to lucratively paying travel contracts and those others who are mindlessly paying monthly minimum payments and couldn’t even tell you what their remaining balance or payoff date is.  The “ideal” situation is different for everyone. The key thing is figuring out what is important to you, which payment plan aligns with your goals and which is most realistic to implement.  I changed my repayment plan from standard to extended, extended to graduated and then refinanced from federal to private to cut my interest rate in half.  At different times in my life, different payment plans made sense. Sometimes, I needed more cash flow so I opted into plans with lower monthly payments for more breathing room, but would still make additional payments quarterly.  It may not have mathematically made the most sense, but it reduced stress on our monthly bills and you can’t put a number on peace of mind.  When I refinanced from federal to private loans, the COVID pandemic hit and the government placed a halt on all student loan interest. Although I was better about the timing of my refinance and this student loan reprieve I no longer had access to, it didn’t deter me because I already had a plan in place. Which I always say….

You Need to Have a Plan

While my path was never a straight line and it never went exactly as planned, I always had a plan to reflect back on.  The plan was instrumental in eliminating decision fatigue.  I always knew when and how my money was going to be allocated towards loans so I didn’t need to wrestle with the emotional decisions of what to do with a bonus or money from a side hustle.  I didn’t feel guilty about buying stuff I wanted and I didn’t get mad at putting more money towards loans because it was always anticipated.  When life hit hard (and it will) and my plan needed to be updated, I modified it accordingly.  Create a plan, but appreciate it is a living document that is destined to be modified and optimized along the way. 

It is possible!

I am not the first person to pay off student loans, nor will I be the last.  My story is not an extravagant success story about working 80 hours a week or becoming a social media sensation and paying them off overnight.  It is also not a story of someone who was handed a free ride either.  I, like the vast majority of the people reading this, am an extremely ordinary person who accomplished an extremely common challenging task.  I share this not to downplay the situation or belittle the feat, but to be relatable and vulnerable. Proving that the large majority of us are not outliers and that we are all walking a very common path amongst others who have been there before or are going through it as we speak.  Strive for greatness and become the next outlier, if your desire, but in the meantime, continue to do the little things right and build a great foundation of habits and awareness. 

-Dr. Zach Baker, PT, DPT, SCS .

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