Happy but not about our student debt.
Ahh, look at that youthful idealism.

It seems like very few people graduate from college these days without student debt.

While we could spend all day bemoaning the increasing cost in higher education and the direct corollary of higher rates of student debt, let’s take a look at what we did to tackle our student loans.

A Little Background

We both attended attended a private, 4 year institution.

We both worked part time throughout college and we both received financial scholarships and aid.

We were both offered $7000 dollars per year in student loans to cover our tuition after accounting for our family’s contribution and financial aid.

Fortunately I had some money saved up and my parents helped to pay the difference each year beyond the Expected Family Contribution so I wouldn’t graduate with any debt.  Thanks Mom and Dad!

Ramona didn’t have this luxury and ended up with $28,000 in debt by the time we donned our graduation caps.

Paying Down Debt

We both found jobs within a few months after school and earnestly began an aggressive debt repayment plan.

We made payments of $1,500 per month for 17 months and on the last month paid the remaining balance.

We were debt free at the age of 24.

Now I know some savvy investors out there would question why we would pay down student debts so quickly, given the low interest rates (about 5.00%), when we could have invested our money and potentially earned a greater return.

Well, let me propose 3 reasons why paying off your student debt as fast as possible can work to your advantage.

  1. GUARANTEED RETURN  We knew by paying down our debt quickly we were gaining back the 5% interest we would have had to pay over the course of the loan.  While the stock market has historically out-performed a 5% return over the long term, there are no guarantees.
  2. FREEDOM  There is a certain freedom that comes from becoming debt free.  Personal debt has the tendency to weigh on the mind, and the joy of being debt free cannot be understated.
  3. OPTIONS  Removing debt obligations increases the options you can make when choosing where to live and what jobs to take.  By paying off our student loans and becoming debt free, we had more freedom to take the jobs we wanted, not necessarily the jobs that paid the most.

Shortly after becoming debt free, we began to explore opportunities

Opportunities when you don't have debt
Abundant Life Center, Bangkok. We helped put on a summer program for neighborhood kids with these women.

to volunteer in Thailand. With Ramona’s loans out of the way, we began saving all the money we use to pay for student loans.  Pretty soon we had about 6 months of living expenses saved up.  Through some family connections, we found out about a volunteer opportunity in Bangkok. So just 2 years out of college, we both handed in our notices and moved to Thailand. We weren’t sure how far our savings would go. Once we were there, we volunteered for a couple of months with the Abundant Life Center (ALC), helping to run a summer program for kids in the neighborhood.

After volunteering in Bangkok for a several months and spending time with friends and family in Northern Thailand, we landed jobs at Joma Bakery Cafe in Vientiane, Laos.  There I had helped to open a new cafe and pioneer cafe delivery service.  Ramona spent time helping to manage operations at the bakery center, revamping the inventory control system and generally kicking butt.

It's great not having student debt.
Joma Staff enjoying the festive spirit.

I share these stories to highlight the unique opportunities we had when we found ourselves debt free.  I firmly believe that had we not paid off our school loans, we would have never risked quitting our jobs and traveling around world.  Our trip turned into nearly a 2 year adventure living in Thailand and Laos.  We look back now with gratitude for the chance we had to volunteer and work with such amazing people.

So what were the key principles that helped us to to pay off our student debt so quickly?

  1. We tackled debt first before other financial goals.
  2. We lived off 1 salary, and used the other salary to pay down debt and save.
  3. We didn’t take on other forms of debt like credit card debt or car loans.

How have you treated your student loan debt?  Did you make the minimum payments or did you pay them down as fast as possible like we did, and why?

Why We Paid $28,000 in Student Debt Off in 17 Months
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2 thoughts on “Why We Paid $28,000 in Student Debt Off in 17 Months

  • January 16, 2017 at 4:05 pm

    It’s such a great feeling to have no student debt. It is awesome you two combined efforts and absolutely obliterated the debt.

    I’m 24 as well, and I have paid off my student debt from grad school. It’s like 1,000 pounds lifted off your shoulders. It’s so great because we are much better off than other people our age, and with that advantage, we can build on it through investments and strong management of our finances!

    Looking forward to reading more content on Couple of Cents


    • January 17, 2017 at 11:03 am

      Welcome Erik. You paid off grad school debt already at age 24. Impressive. Our debt was from our Bachelors degree so kudos to you for getting it done early. You won’t regret it.


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