12 (Non-Rich) 20-Somethings Share Exactly How They’re Paying Off Their Student Loans

schoolworkPaying back student loans can be the defining financial element of a 20-something’s life. While many of us knew, when we were signing on the dotted line, that we were accepting a huge burden on our future selves, we likely weren’t equipped at 18 years old to truly understand what that meant. And whether or not we’ve ended up using the degree we paid for (if we even finished school), that money needs to be paid back. Commitments that once seemed like no big deal, and six-figure sums that we imagined some future, rich version of ourselves would pay off, mean that many of us are not living our young adult lives the way we imagined we might.

Lauren and I are living with student debt in different ways — Lauren and her fiancé owe a very high combined principal, that requires nearly 1,600 dollars a month in repayments. My boyfriend and I owe, combined, just under 10k (and it’s all mine), but I defaulted on my loan payments, raising it up to nearly double what it initially was, and severely damaging my credit in the process. Both of our debts have impacted our lives significantly, and both of us were smart in some ways and naive in others when we think of how we got to where we are now.

But we wanted to know how people were paying their debts, and what it meant in terms of immediate sacrifice for them. Sometimes paying off loans can make you feel isolated, or like you are the weird exception who didn’t do it right. And it’s important to remember that, for most of us, we are all in this boat together. Here, 12 stories from real 20-somethings on how they are paying down their debt.

“My company has this pretty awesome policy where if you recommend an individual who is extremely qualified for a job opening, and you refer them, you get $1,500 if they stay for six months on the job. The bonus money increases if you recommend someone for a higher position and they get it and stay. By my lucky stars, I knew two people from college who fit two job openings perfectly and they ended up getting hired and staying. In the end, I collected about $3,000, and I used all the money to pay off a significant chunk of my school loans that had a high interest rate. It killed me to take all the money and use it toward something so boring, but I breathe easier everyday knowing that I took a huge step in the right direction by doing so.” – Ana, 25

“I’ve had to push off getting an apartment with my SO (now fiancé) for about a year until I made enough money to afford rent AND my loan payments. It was a trade off between getting something I felt like I wanted now, for the financial and mental security of being able to make my loan payments every month.” – Noel, 27 

“I actually don’t have student loans (don’t hate me!), but I am getting married to someone who did. My future wife has a Master’s from one of the most expensive schools in the country, and even though it enabled her to get a very good job, it means that she pays around $1,000/month in loans, and that barely allows her to cover the interest. Realistically, I knew in marrying her that I was making huge changes to my financial life, and that it might mean that I can’t do the things I always dreamed of, like buying a home or traveling the world, until a little further down the road.

But she is the love of my life, and has been so good about never wanting to put the pressure on me, which makes me want to help her even more. So we are forgoing a “traditional” wedding and taking a small vacation to a beach town with 15 of our closest friends and family, getting the whole thing done for about 5k, and asking our family to take the money that they were planning on giving us for a big wedding (we both come from big families, Italian and Puerto Rican), and help us with our student loans. Between that, and the money we are saving on the wedding ourselves, we’re going to be able to put 20k on her loans right away and get her down to a place where we can actually start chipping away at the principal itself. I also expect a sizable bonus from my job this year, and that is being put directly towards the loan as well. We’re going to be a while before we can move from our little rented apartment into our dream house, but it will be worth it.” – Jackson, 28

“After I leave my 9-to-5 job, I head to a local Thai restaurant four days a week to work the night shift from 6-10:30. My co-workers don’t know I work there, and I’m too embarrassed to tell them that I have to work two jobs. I wanted a job that would simply pay the bills and that I could mentally check out of while I was there, so I don’t mind going. It’s a temporary situation, and it’s what I need to do for now to make this work.” – Liz, 22

“Right after I graduated college, my parents threw me a graduation party where people gave me gifts of, you guessed it, cash. While a lot of my friends in a similar situation ran off to Europe to take the dream vacation they always wanted, I took the $2,100 I made off that party, and put it toward my school loans. I stayed at the shore for a few nights with my boyfriend during the summer as a mini-vacation before I started working, and I don’t regret it at all.” – Maya, 28

“Waitressing private parties at people’s houses through a local catering business has been a godsend for me. I’ll often work three long Saturdays a month (think from 4pm – midnight), and I make $18-20 per hour PLUS tips from the host of the party (which can range anywhere from $50-$200) In one month, I can make hundreds of dollars extra on top of my full-time job, and this allows me to pay back my school loans back way faster than I ever imagined I could.” – Faye, 21

“My fiancé and I are putting off our wedding until we’ve both paid off more of our student loans. Right now, we could technically do it, but we’d like to have the wedding we really want (and yes, mine looks a little Pinteresty lol), and right now that’s not possible. So we are living with my parents just outside the city where we work and putting 60% of what we earn into our loans so that we can get them down to a simple combined 500/month payment by the time we move out. (We have a lot of loans.) The plan is to move out by January of 2016, get settled, and start officially planning our wedding in summer 2016 for a summer 2017 ceremony. By that time, we’ll be able to rent out our winery and string it with lights and have unlimited bubbly for our friends and family, without feeling the guilt.

I guess I should also say that it’s not been perfect, in the sense that a lot of our friends and family members don’t know why we’re choosing to live at home, and to have a three-year engagement, instead of just paying a little less on our loans. Especially the older family members who don’t really get loans, and the friends who live in the city who complain when we have to take an hour-long train ride home after a party, are inclined to make comments/jokes. And that can get annoying sometimes, but our dream wedding, and starting our life off right, is worth it to us.” – Lacie, 26

“Student loans are the things i make sure are paid right after I take care of basics like housing and food. I have set up automatic payments and worked with my loan providers to make sure that I’m paying a reasonable amount each month.

I’m not rushing to pay down my debt — its impractical to do so and still be able to meet other goals that I have, but I am paying them. It does mean that I am paying the loans slower (over 25 years), and paying more in the long term, but it is important for my quality of life.” – Sara, 26

“I work for a bank and I fucking hate it, instead of working in fashion like I wanted to do. But I can afford to pay a thousand dollars a month on my loans. So we’ll see.” – Alex, 30

“I am one of those lucky people who has near-six figure debt, and no degree to show for it. For mental health reasons, I dropped out in my junior year, and never ended up going back. I started working at a coffee shop while living at home and basically put everything I earned toward my debt, and eventually worked my way up into managing the coffee shop, which pays well and has great benefits. (It’s Starbucks.) I am now building up my graphic design portfolio on the side (it’s what I studied in school), and have two small paying design jobs a month now, while I work as a manager an even bigger Starbucks. My goal is to transition to full-time designer by 2016, but for now, I earn enough to pay $700 a month in loans, rent an apartment in my city (with a roommate), and have full benefits. It has taught me to never underestimate certain jobs, because I’m doing a lot better than some of my friends who have their degrees and a “real” job.” – Katie, 26

“I grew up and went to college in a very expensive part of New Jersey where the cost of renting and living is quite high. When I graduated, I moved down to south Jersey with my fiancé where the cost of living is much lower. It allows me to put the money I’ve saved on rent each month toward school loans. I used to worry about how I would make ends meet each month, but now life is easier because I don’t have to stress out as much about paying high rent prices.” – Rachael, 25

“So I spent the first two years after college being an absolute dickhead and not doing anything I was supposed to. I ran off with a guy to London and just ignored my loans for seven months, then I came home and rented a room in my friend’s apartment in Brooklyn and basically just partied for the next year. It wasn’t until the collection agency started calling and mailing my mostly-estranged father that I had to do something about it. The fact that he was calling me on a regular basis meant that they were REALLY harassing the shit out of him, and I did not want to have to talk to my dad, so getting him off my back is honestly what pushed me into being smart about paying things back.

By that time, I was working a job in operations for a production company and making about $36,000, which, with my $750/month rent and $600/month loan payment agreement was not really going to cut it. So I took a job two nights a week babysitting, one weekend night and one weeknight, and was able to earn just about my loan payment every month. Which made the whole process feel much less painless, for someone like me who doesn’t want to give up an inch of ~living~ and ~experiencing~ for the comfort of being responsible. I guess you can thank my deadbeat dad for that. But on the bright side, now my credit is getting back to normal and I haven’t missed a payment in over a year. And it hasn’t ruined my life.” – Amanda, 26

  • Christian Gonzales

    Thanks for this post! Its really nice to see how others are tackling student loan debt. I myself have recently started hosting bar trivia once, sometimes twice, a week. Its fun, i get a free tab, i get to see my friends, and that extra $300 goes to my loan payment each month so that I can pay more than just the monthly minimum. It’s nice to know I’m not the only one in this boat.

  • Eileen Watson

    Yikes! Reading about monthly payments of $1000 is terrifying. I went to school in Canada, and currently have $34k left to pay off, after graduating from university two years ago. My monthly payments are $195 for my private bank loan (19k with interest at 4.35%), and $135 for my government loan (15k at 5.35%), both with amortization rates of 15 years. We’re very lucky here to have much, much lower tuition, as well as lower interest rates available.

    • Erin Williams

      5.35% isn’t really that low of interest. Even if you *can* just pay $135/month, I’d really encourage you to look at the amount you’re paying in interest and how much in total paying off early will save you. Just taking a quick look at your numbers it looks like on that 15k loan you’ll pay over 5k just in the interest, and if you increased your monthly payment by just $60/month you’d save half of that and be done with the loan 5 years sooner. (disclaimer, I am not an accountant, just some person on the internet running numbers through a quick calculation)
      I paid $1400/month on my loans not because I had to but because the freedom that came from an early payoff was well worth it to scrimp on things for just a couple of years.

      • Eileen Watson

        Any interest isn’t low interest, I’m just thinking about mine compared to the woman down the hall in my office, whose loans are at 9.5%. Just looking on the bright side! There isn’t a day that goes by where I don’t think about the interest I’m paying. I’ve crunched the numbers a million times to see what extra monthly $$ would look like, but my financial situation right now means minimum monthlies and twice yearly lump sums.

  • Holly King

    I’m overwhelmingly impressed with so many of these people. Katie, 26: You are a badass lady. I’m your biggest fan. And Jackson, 28. I’m convinced that you are a living, breathing saint. Possibly not a real person. All of you have a ‘can-do’ spirit and I love it!
    As a whole, this post just gave me the extra push I’ve needed to get a #sidehustle situation started. I’ve been toying for months with the idea of doing something in addition to my full time gig in marketing. For reasons that really don’t make sense, I’ve been putting it on the back burner. But no longer! Back to the job hunt!

  • I loved this post. I’m fascinated by money and how people handle theirs. Student loans are no exception. I also can relate to what you said about not knowing what we’re getting ourselves into at the age of 18 when we sign that dotted line. Never, ever would I have done things the way that I did. Thanks for all this food for thought!

    26 and Not Counting

  • kash

    Like a bunch of the people in this post, I just work more–I tutor/do application consulting/take on whatever little jobs I can. That money is earmarked for debt repayment

  • i_archer

    Great post! I am with Sara on wanting to live a good quality of life and expecting paying more overtime by making my larger loan based upon ICR ( i always pay over it though) while I have another one regular 5 year payoff. All these folks are badasses and gave me the extra push for a side hustle.

  • Sarah

    I went the income-based route so I could have a better quality of life over time. I do pay more if I can that month, but knowing how much I have to pay, this option would still allows me to live reasonably. I’ll have the loans paid off around the age of 40 at this rate. In the end, it’s just accepting that you took out the loans and making the repayment a part of your life.

  • I find it interesting that only one out of these 12 people is male. (Maybe two– Alex could be a man.)

  • Shaney

    I find posts like this so interesting as I am from New Zealand and we have interest free loans. After 5 years of study, I have a 30k debt and my repayments automatically get taken out of my pay based on how much I earn. We can make voluntary payments as well but generally for people around my age (23), this doesn’t happen unless you have relocated overseas for six months or longer, which is when the loan switches from interest free to gaining interest and monthly payments are required. Reading this makes me admire the value of a good work ethic so much and allows me to be more aware of how other countries work their education systems. There are also so many things I would have done differently in those 5 years of study to reduce my loan – 18 is just so young to make such a big financial commitment! Thanks for the post 🙂

  • Christine

    I am also currently on an income-based repayment plan. My loans total in the high six figures, and there’s just no way I would be able to afford the minimum payments on the standard 10-year repayment plan and still live. I had no idea what I was signing up for when I signed those papers at 18-22, like so many others, and I totally believed my parents that I would get an amazing job and pay them off so easily after school.

    Luckily, my job qualifies me for the public service loan forgiveness program. If I work full time for a non-profit organization for 10 years, I will be eligible for forgiveness – but the total of my loans at that time will be considered taxable income for that year, so I’m going to have an enormous tax bill that year. That’s going to be rough, but it’s a LOT less than the amount I would be paying if I paid off the loans without forgiveness. Hopefully this program still exists in 10 years – it started in 2007 so the first people who will be eligible for it haven’t even gotten to their 10 years yet. I’ve read articles about the government/politicians/whoever wanting to put a limit of $57,500 on this, which I totally understand because right now, there’s no limit on the amount of grad plus loans you can take out, and no limit on the amount that can be forgiven, which is a huge loop hole.

    Anyways, I LOVE seeing posts about student loans on TFD – keep em coming!

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