How I Eliminated $34,000 in Student Loans in 14 Months

Student loans. These 2 words still send shivers down my spine. For many people like myself, they were a necessary evil in the pursuit of higher education and a brighter future. Student loans helped me accomplish my goal of becoming a Registered Nurse after I failed to meet the requirements of one of my scholarships in my sophomore year. Due to my lack of financial literacy as a young college student, I made some poor choices and racked up a mountain of debt to finish my Bachelor and Master degrees in Nursing.

A trip down memory lane.

I was scrolling through my Mint profile and decided to take a trip back down net worth memory lane to see how far I had come. I almost fell out of my chair at work when I saw that I used to have a negative net worth of over $70,616 back in 2013. The truth is, my net worth was probably even worse than that before I started tracking my finances. I graduated from undergrad with my BSN in 2006 and completed my Masters degree in 2011. I made the minimum payments on my student loans from 2007-2009 and deferred my loans while in graduate school. There were even a few forbearances sprinkled in the mix for a little razzle dazzle. Pausing the monthly payments on my student loans allowed them to accumulate a ridiculous amount of interest.

The thought of my student loan balances would cause me to become super overwhelmed soI did what most adults do when overwhelmed…I simply ignored the situation. I paid the required minimum payments and tried to pretend like the elephant sized debt did not exist. It wasn’t until August 2018 that I got really serious about becoming debt free. Below are the step by step methods I used to eliminate my debt in 14 months. There were also 2 situations that I consider miracles that assisted me in reaching my goals more quickly.

Rushed for time? You can scroll directly to the bottom of the page to read the steps listed out in order.

Step #1: I prayed about eliminating my student loans.

This may seem crazy to some but I knew I needed God to help me pay off the student loans. My husband used to chuckle sitting next to me in church because this would be my prayer almost every Sunday. I don’t think he really understood why it was so important to me to make the loans disappear. The amount of money that I was shelling out to Great Lakes every month was astronomical. Paying off the debt would allow me to have endless opportunities to do more philanthropic things with my income and live life on my terms without the weight of this debt holding me back. I prayed and believed wholeheartedly that God would do it for me but as every church kid knows- faith without works is dead. I could believe for a miracle all day but I had to write the vision.

Step #2: I created a budget and a plan to attack the student loans.

Once I decided that I wanted to pay off the remaining balance on my student loans, I sat down and looked at my financial situation. I had exactly $34,144 left on the student loans at that time. Once I created a budget, I realized that I could afford to throw an extra $600 a pay period to my principal balance every 2 weeks on top of the monthly payment of $750. I would use the debt snowball method made popular by Dave Ramsey to pay off my debts from smallest to largest.

The proposed plan would be a huge sacrifice for me because I was going on this journey independently. This would mean that I would have to cut out the majority of the things I loved to do for a season like weekend brunch and weekend getaways, shopping until I dropped, and other non-essential spending. My family thought I was being a bit extreme but I wouldn’t let anyone dissuade me.

The goal was to pay off the remaining student loans by the end of 2019.

The first month, I was excited to get the ball rolling so it was easy to stick to the plan. I paid an extra $1180 to debt that month. September was an entirely different story. I dreaded making that payment! I knew from the start that this plan would require a lot of discipline and self control so I wouldn’t let myself deviate from the plan. Your girl had to come to terms with delayed gratification. I had to keep the goal at the forefront. Once I made up my mind that the sacrifice would be worth it in the end, it got easier to let the money go. The debt snowball started rolling.

A little miracle occurred at the beginning of my journey!

I was awakened with the strong urge to seek out a loan repayment program early one August morning around 2 am. At first, I thought about ignoring the thought but I couldn’t shake the urge so I got up and Googled repayment programs for nursing faculty. I had sought out federal repayment programs in the past so I wasn’t expecting to find much but to my surprise there was a repayment program for nurse educators in Texas. The deadline to apply for that year was that very day!! I was like, oh I KNOW this is a sign from God!

I sat up for a while completing the entire application. When I arrived to work, I asked my boss to fill out the employment verification form and rushed to fax it over to the organization. I was hopeful but didn’t want to get my hopes up too high since I was turning in my application on the very last day. Fortunately, I was accepted into the program a few months later! I was so excited. The terms of the agreement were that I would receive $7,000 a year for 5 years as long as I stayed employed at my school. They sent the first payment to my debt at the beginning of 2019.

Then came a minor setback.

I was so excited about my acceptance into the repayment program. The excitement caused me to wrestle with the thought of slowing down my debt snowball. Should I stay on track? Should I pay all but $7000 of the debt since the repayment program would eliminate the remaining balance in 2020? I went back and forth for weeks. I wanted to start a sinking fund towards the purchase of a newer car because my car was on it’s last leg. After much consideration, I decided to continue the journey as planned. Thank God that I did because a couple months later, I received a letter stating that I did not qualify for the repayment program after all.

I was so confused and discouraged. The lender had already received the first payment from the Board so I did not understand the reason I had suddenly become disqualified. I called the organization directly to get clarification. The explanation they gave was that the repayment program was geared towards full time nursing faculty working at public institutions only. My university is a private institution so I shouldn’t have even qualified to begin with. The spokesperson stated that since it was their error, they would not make me repay the $7,000 payment that they made to my creditor but that I would not be receiving any further payments from the program. I was totally fine with that. I thanked God for the blessing and said a little prayer for whoever He allowed to make that “error”. Hopefully, they didn’t get fired.

Step 3: I created a side hustle.

I’m not going to lie…my debt free journey grew tiresome after a few months. I wanted to go on vacation and to do some retail therapy. I wanted to quit so bad. My husband even highly suggested it a time or two or three since I was becoming unhappy with the process but I wouldn’t allow myself the pleasure of quitting.

I did something a bit drastic to stay motivated. I calculated how much I had actually paid in interest over time. To my dismay, I learned that I had paid over $24K in interest to Great Lakes. I was horrified and pissed at myself for not starting this journey sooner. Seeing that number lit a fire inside me to pay off the debt even more quickly. This was a huge turning point in the journey.

The debt payoff process shifted into overdrive.

Dave Ramsey’s YouTube videos taught me that multiple streams of income are necessary to pay off debt quickly. I searched Indeed for a part time job but couldn’t find anything with hours that wouldn’t conflict with my full time job. I sat down and wrote a list of my talents and tried to figure out ways I could use my talents to make extra money. After much thought, I decided to offer tutoring to new graduate nurses preparing for NCLEX. I created a Facebook page and ran an ad for 2 days. By the next weekend, I had acquired 2 new clients. The clientele grew by word of mouth. I threw every extra dollar I made from my side hustle at that debt.

Step 4: I participated in no spend months.

Although I was not spending much money, I had budgeted for small things like ordering takeout a couple times a week. During the no-spend months, I cooked at home and packed all meals for work. The extra money I budgeted for takeout went towards my debt. I also became a homebody during these months in an effort to reduce my gas costs. Any extra money I could squeeze out my tight budget went straight to Great Lakes.

Step 5: I surrounded myself with motivational people and positive affirmations.

This journey is not for the faint at heart. There were lots of times that I wanted to give up. My husband was amazing during the journey. Although he was not helping me pay off the debt, he helped me maintain my sanity. He knew how much I missed traveling so he booked and paid for several mini vacations for us during this time. I also was invited on a couple sponsored vacays during this season which was much needed!

Two of my best friends, Celia and Kami constantly encouraged me to stick with the plan. I also followed the #debtfreecommunity hashtag on Instagram and YouTube to see real life people kicking debt to the curb which help me stay motivated. I constantly reminded myself that the sacrifice was only for a season.

A blessing in disguise.

I’m a living witness that God really does give us the desires of our heart! He will meet us at the point of our needs. God knew how much I longed to be debt free. I’m sure He was probably tired of me talking about it lol. God was like, I see you girl and I’ve got you! He worked that thing out!! One day during a meeting with the new leadership team at my job, I learned a little tidbit that made me question whether I had been paid correctly in former years. After going back and doing some calculations based on what I learned, I discovered a major error to the tune of nearly $20,000!

I had mixed emotions in the moment.

Initially I was pretty angry. I wondered to myself if I hadn’t learned the info in that meeting, would I have ever known that I hadn’t received the correct payment for over 2 years?! My company quickly rectified the situation once it was brought to their attention. My anger shifted to excitement that I was going to be receiving extra money that I could use towards paying off my debt.

After Uncle Sam got his cut, I received payments for around 14.5K. The payments were disbursed over several months. I continued paying the $1200 a month as planned and added any additional funds that I received each month to the loan payment. I was able pay off the last student loan on October 23, 2019. It was so surreal to see that zero balance. All I could do is thank God for his favor and grace throughout the entire process.

Those 2 “errors” that occurred during my journey equated to over $21,500 that I was able to use towards my student loans. I know it was God shining down on my situation due to those continual prayers. While reflecting back on this journey I had to smile and laugh because I noticed the timing of the blessings were at the beginning and the end of my debt free journey. It was like God was subtly reminding me that He is the Alpha and Omega-the beginning and the end. I am forever grateful.

The step by step process I used to eliminate the student loans.

1. I prayed about my student loan situation.
2. Made the tough decision to embark on the debt freedom journey.
3. Reviewed my financial situation.
4. Made a budget and a plan for debt repayment.
5. Set a goal for date of completion and stuck to it.
6. Used the debt snowball method to pay off debt from smallest to largest. Used the money saved from paying off smallest debt to pay on next debt.
7. Sought out debt repayment programs based on my career. Look for local, state, and federal repayment programs.
8. Created an additional stream of income.
9. Reduced unnecessary spending. Participated in a no-spend months to allow more money for debt payments.
10. Surrounded myself with like minded people. Watched Dave Ramsey videos and joined debt free community on Instagram. Spoke to friends also trying to get debt free.
11. Stuck to the plan even when I wanted to give up.
12. Remained prayerful.
13. Paid on the debt monthly according to my plan until student loan balance was zero!

That, my friends, is how I eliminated $34,144 in student loans in 14 months.

A Word of Encouragement

If you are considering going on a debt free journey, I would encourage you to go for it sooner rather than later. It will save you thousands of dollars in interest. Once you create your budget and your end goal, do your best to stick to it. It will be challenging and even frustrating at times. There will be times you will want to throw in the towel. Just remember the sacrifice will only be for a season. You can do whatever you set your mind to do.