4:47 PM How to Pay Off a Big Student Loan | ||||
#fast student loans # This Millennial Paid Off $23,375 in Student Loans in Just 10 Months"If you have a game plan, you can accomplish your goals," says 22-year-old Jordan Arnold.Like many millennials, Jordan Arnold graduated from college five figures deep in student debt. Unlike most of his peers, he paid off all of his loans less than a year after graduation. Bluffton, Ind. When he started paying it down: May 2013 When he became debt-free: March 2014 How I started building debtI always knew I was going to go to college, though I figured I d go to community college for a year or two because it s cheap. But my parents started talking to me about this private Christian school, Indiana Wesleyan in Marion, Ind. I took a visit, and I really liked it. It s only like 3,000 students on campus, so it s a tight-knit community. Tuition and room and board was about $31,000 a year. And the first year I hadn t applied for federal student aid, since I didn t commit to the college until about 10 days before classes started. I got some scholarships and a grant from my church, though. So, ultimately, I owed approximately $9,000 that first year. Getting to $23,000I could only borrow up to $5,500 in subsidized loans from the government each year, so I worked to cover the rest so that I didn t have to take out private loans. I also graduated in three years, which helped. Still, altogether, I had to take out $15,150 in subsidized federal loans and $2,000 in unsubsidized federal loans. I borrowed another $6,000 from my parents. My uh-oh momentIn the fall semester of my senior year, I remember being kind of nervous. I knew I had to start paying my debt within six months. It s stressful, when you don t have any money. And I heard all these stories about college students who get out of school, they have all this debt, and they can t find jobs. Getting my debts paid off was important to me. I didn t want to get the point where I d have to be paying student loans for another 10 years. Right now, I m single. I don t have any dependents that rely on my income. But I didn t want to have these loans over my head when I m trying to feed a family and put a roof over their heads. It s not just about me, it s about my future family. My first step out of the holeLuckily, I got a job right out of college at an insurance agency (I had majored in finance). I was on salary, and it was pretty good: $36,000 plus bonuses. I didn t have to pay my student loans for another four months, but over the summer I decided to go ahead and start making payments before interest began accruing. I actually moved back in with my parents which is hard when you have been out on your own. But I didn t really have a reason to move out. And I was blessed that they actually preferred me to live there because I could help out around the farm they own, baling hay or feeding the horses. Living at my parents place for free was a lot better than having to pay $400 or $500 a month for rent. Kicking it into gearAbout four months into my new job, I picked up a second job, delivering for Pizza Hut, to help pay off my debt. I would start work at the insurance agency at 8:30 a.m. change in the bathroom at 4:50 p.m. get to Pizza Hut by 5, deliver pizzas until about 9:30, get home around 10, then shower, eat, and go to bed. My monthly take-home pay from the insurance company was about $2,200, and I made about $1,000 at Pizza Hut. After gas, car insurance, tithing to my church, entertainment and food, I could put about $2,000 towards my debt every month. At that rate, I was projected to pay off my debt in May 2014. But I got a $3,000 refund on my taxes, and paid off the rest of my debt with that. How I celebrated being debt-freeI made my last payment the first of March, then I went to Florida with some friends two weeks later. It was pretty rewarding after a 10-month battle. I had probably worked 65 to 70 hours a week for seven or eight months. It was exhausting, but it was worth it. What I d tell someone else in my placeIf you have a game plan, you can accomplish your goals. I have an account on Mint.com, that s where I kept my budget. That s a big part of it just seeing your progress and knowing you re getting closer. Also, have an emergency fund. While I was paying off that debt, I had a small car accident. I was delivering a pizza, and I hit something in someone s driveway. It cost me about $760 to fix the car. But I had a $1,000 emergency fund, which was kind of a buffer that I kept because life happens. Finally, don t be afraid to move home if you have to. That was a big part of how I got out of debt. My plan for the futureI quit my Pizza Hut job in April after paying off my debt, and now work at a bank analyzing commercial and agricultural loans, which is more in line with what I wanted to do. I actually haven t moved out of my parents house yet. Instead I m saving up for a down payment on a house. I m putting away 50% of my take-home income for that, and I should have a down payment by mid-summer. I also started investing. I started a Roth IRA, and I plan to max it out this year. Staying true to myselfSome people have made the argument, Maybe you shouldn t have paid off the debt so fast because the interest rate is cheaper than what it will be for you to borrow for a home. That makes sense in my head, but in my heart, I didn t want this hanging over me. I want to be responsible with my money and build a strong foundation. Check out Money 101 for more resources:
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