My Plan to Pay Off Our Student Loans

Student Loans….a topic that almost everyone can relate to and almost every person in the personal finance community curse.  We’ve all read the reports and the numbers are staggering:  total student loans are over $1 trillion dollars here in the US and the average graduate is leaving school with an average of $37,712 (Source: Student Loan Hero).  My goal today is to discuss my family’s student loan situation, some of the tough discussions we had before incurring the student loans, and then to cap it off, my plan to pay off our debt as early as possible.


My Family’s Student Loans Situation – How we got here

I don’t know if you all have noticed this, but we haven’t covered student loans too much on this website.  That’s because Lanny and I, for two completely different reasons, we able to pay off our student loan debt quickly out of college.  Heck, I believe both of us processed our final payment before we started this website over two and a half years ago.   My strategy was to pay off the high interest rate debt and free up the monthly cash flow to invest as much of the proceeds as possible.  I have to think that freeing up the capital was a major contributor to getting my portfolio in the position it is today (with over $3,250 in dividend income).  I was very fortunate, no doubt about that, as I left college with less than one-third the debt the average student is now graduating with.  So paying off my  student loans early was an easy feat as I started my career in public accounting.  This wasn’t one of those “Pay off an insurmountable about of debt in 12 months story.”   Rather, it was a “I’m sick and tired of incurring high interest rates on debt so let’s end this as soon as possible” stories.

If I paid off my student loans over three years ago, then why am I writing this article?  If you all recall, about 6 months ago (Wow – almost six months ago to this day), my wife and I got married and started a new chapter in our life.  At the time of our wedding, she was enrolled in a graduate school program to become a nurse practitioner.   For all of those who are wondering, yes, I still do feel bad that she was still working, in grad school, and I proposed…adding planning a wedding to that list.   Like most people, we had to take out student loans to fund her studies.  Her student loans are through the government and since she is enrolled in a graduate program, she is paying a premium interest rate on her student loans (approximately 6%).  Not an ideal situation at all; hence why I am here writing this article here today.

Before I dive into the amount of student loans outstanding and the payoff plan, there is one more piece of the story I wanted to tell because I think it is an important piece of the equation that is often overlooked.  Sorry everyone, I am stepping up on my soapbox here…please hang in there with me.  I wanted to highlight the conversations we had before she decided to enroll in school and how important this decision was to determine when enrolling in graduate school will be worth it in the long run.  Too often, with degrees such as MBAs or other graduate school programs, I do not think the following conversation is taken seriously.  As a result, as I have seen with too many friends over the years, they leave their graduate program thinking things like “This wasn’t worth the money” or “How the heck am I going to payback my student loans? It will take forever.”  Therefore, when my wife and I entertained the idea of her going back to school, we ran the idea through a vetting process and made sure that all the boxes were checked before researching the right program.

  • Is this something she passionately cares about?  Yes.
  • Would you quality of life improve as a nurse practitioner be greater than life as a registered nurse?  HECK YES (Don’t believe me, just talk to an RN).
  • Will this increase your earnings power significantly to justify the expensive student loans?  Yes.  If things are according to plan, the amount earned from an increased salary should surpass the cost of tuition in less than two years.

It didn’t take too long to sell me on the idea.  After she decided to proceed with enrolling in the online program, we created an excel file to weigh the costs of the program with the program’s rankings.   We passed on the low-cost provider because of terrible online reviews, saying the school was not helpful with job placement and professors were difficult to get in contact with.  I am all for spending more to pay for quality in the right situations.  We are frugal…not cheap.  You are spending a lot of money on this education regardless of which college you select, so it was a no brainer to pass on the low-cost provider and incur more debt to ensure you are receiving a quality education and it increased the chances of receiving a better job post college.  After much debating, weighing of pros and cons, we had finally settled on the school.  The program was six consecutive semesters for ~$35,000 in tuition.   She would begin in January 2015 and end in December 2016 (Yep – just a couple of weeks away).

Our “Six Semester, six quarter” Student Loans payoff plan

Tuition was $35,000, still below the average graduate’s student loans balance upon graduation.  So again, we are in a pretty fortunate place here.   To make the news even better, my wife’s employer offered  tuition reimbursement totaling approximately $7,000 over the two years.  Further, we have begun the process of paying down the debt over the last few months.  I hate having debt in general and love paying it off as soon as possible, so I  can only imagine how I am going to feel when we find the house of our dreams and the mortgage that will come along with it.   When all is said and done and my wife receives her diploma in a few weeks, her final student loan total will be $23,000 + interest.  Yes, I make sure all my payments round the debt down to an even number.

I’m calling our plan the “Six Semester, Six Quarter” payoff plan because I want to try to pay this loan off as fast as possible considering the high interest rate.  Since my wife’s program was six semesters long, I am aiming to have our student loans debt paid off in six quarters, or by June 30, 2018. This would result in paying off $3,833 in principal quarterly to achieve this goal.  Further, I am earmarking all future funds that I earn from Swagbucks and other side hustles towards this quest.  If I want it bad enough, we are going to make it happen.  Will it be tough?  Sure.   Will it impact my ability to invest?  No, it shouldn’t considering my wife’s increased earnings power.

Also, come January, I am going to explore student loan re-financing options to see if I should lower the interest rate on the loans so that more money will be applied to principal with each payment.  Based on some quick research, we could potentially reduce our fixed interest rate from 6% to 3.5%-4% depending on the institution we select.  Since my plan is to have this paid off in a very short period of time, here is the formula I will use to determine if re-financing is a good idea: If Fees (Origination and Potential early payoff fees) + New Interest < Current Interest Rate, then we will refinance.  If not, well, then looks like the government will be our lender until June 20, 2018.


Operation “Blitz Student Loans” is officially underway.  One thing that is sometimes lost in the shuffle is that all debt is not created equal.  There is good debt and there is bad debt.  While it sucked taking out debt, we considered this good student loans debt.  In this inst It checked all of my wife’s life/career boxes, will make her happier, and increase her earning power over the years.  Further, the fact we had the tough discussions up front and made sure we found the best option for her schooling allowed us to avoid incurring too much debt and washing away some of the benefits of this move.  I look forward to the challenge of paying off the student loans debt in less than two years and hopefully bring new meaning to our “Every Dollar Counts” philosophy.

What are your experiences with student loans and the payoff process?  Do you have any advice or suggestions for side hustles along the way?



14 thoughts on “My Plan to Pay Off Our Student Loans

  1. Sounds like a very solid but also challenging plan. You can do it!
    I am actually in a bit of a similar situation as my wife went back to university too. She finished her bachelor and is working on her master’s degree now. Luckily tuition fees here in Europe are still much lower than over at your side of the pond.
    Congratulations on the increased joint earnings power as of next year. I wonder whether it will affect your goals for 2017.

    • Thanks DIB! Challenging is fun…right?? I’m just excited to be aggressive and get this balance to zero as soon as possible. Good for her for getting her masters degree, what is she studying? Cheaper tuition is awesome and I feel like that would open a lot more doors and potential options to study as you won’t be saddled with debt when leaving school.

      And to end…this will definitely impact our 2017 goals haha Just trying to map it out and have the best blend of investing/debt reduction.

      Thanks for stopping by!


  2. The best advice I could offer, you already know. If you prioritize the debt as urgent and develop a plan to tackle it, you are already passed the hard part.

    The problem I see is that too many people are comfortable being in debt and paying the bank (or CC company) a ton of their hard earned money.

    Operation “BLITZ” will be over quickly I’m betting.

    • Agree completely Divi Cents. Just because you can pay your debt off over time, doesn’t mean that you should accept that fate. If you want it bad enough, sacrifices will need to be made, changes in habits may need to be adjusted, and you may need to even pick up a side hustle or two, but if you want it bad enough…it is within your grips.

      Hopefully you are right and operation blitz is over before I know it!


  3. Hi Bert,
    Is there any reason to wait until January rather than looking into refinancing the loan now? I know this is a busy time of the year but time is money and all that.
    It’s good to pay down the loan as fast as possible given that the loan is ~6% interest; that’s a guaranteed 6% ROI compared to unknowns in the stock market. But hopefully you can find a better refinance rate too.
    Best wishes,

    • DL,

      That’s a fair point. Sadly, I am going to chalk this one up to not having a lot of time. Trust me, I know the benefits of the lower interest rate, which is why I am going to try and pay this one down as quickly as possible. The trade-off between stretching out this debt versus investing just isn’t there; finding income stocks that pay that yield and pay a safe/growing dividend would definitely be difficult.



  4. Bert,
    We, did something similar with a terrible auto loan my wife had right out of school. Had over a 7 percent apr. We weren’t in a position to pay it off as aggressively. But I think we finished a 60 month 19k loan in 1/3 the time. Literally ever spare dollar went to it. Currently we are in a different position. She has roughly 20k left in student loans but with a 1.5 percent interest rate. So we have no incentive to pay it down quickly. We are instead our investing our money since this is our only debt. Of course with two kids in daycare there isn’t a ton of spare money. They almost need to have student loans for that.

    • Seedling,

      That’s impressive! That my friend is how you wipe out some debt quickly and get rid of an awful interest rate. I agree with your approach on the 1.5% debt. With rates less than the average dividend yield, I would also focus on investing versus paying off my debt early. I have a zero percent auto loan for the car I purchased and I am stretching that baby out as long as possible. We don’t have any kids yet, but I have heard the cost of day care is astronomical. Blows my mind haha

      Thanks for the comment and sharing your story.


  5. If your job situation is stable have you considered moving some of that debt onto a credit card with a zero percent in balance transfers or purchases for 12-18 months. I was able to do that for the last year of one of my student loans and pay it off before the higher rate kicked in.

    • Just saw the follow up comment after your response. That is a bold move. We are stable enough for sure, but with a house looming and potentially kids, I don’t know if I am that ambitious here. I would rather keep my options open and just work to pay the debt off as fast as possible. If something changes and I can’t complete this payoff plan, then I am not boxed in with the credit card debt.

  6. Best of luck Bert. I was fortunate enough to have my parents pay for my education but after I married my wife we are paying down student loan debt as well. We even paid off a Sallie Mae loan in a year. Look forward to seeing how you both do. I know for sure in a marriage it’s easier and quicker when both are focused on one goal.

    • Thanks Andre! Agree completely and the two of us are definitely on the same pager here. Hopefully we will blow this goal out of the water. Congrats on paying down your debt as well. Sounds like the two of us had pretty similar situations for our personal undergrads.

      Have a great Sunday!


  7. I admit I was lucky and didn’t graduate with any loans, so I was totally unfamiliar with the whole thing until I got married. My wife came in with… well… a lot (29k + a secret 7k cc account). I was re-balancing at the time and shunked the money over to take care of those (at 4% and 10% respectively, easy choice since both were “bad” debts (not deductible like mortgages (aka “good” debt))). Yeah, I know that I am lucky that I have cash accounts (at least in transit) to be able to do this.

    Then I created a spreadsheet with that total and then started making small payments to those items (once we clear daycare we can start to make some more serious movement on these account) as well as increasing the debt at .25% per month (at least giving a long term return to the lost money (aka tricking my wife to increase our savings rates)).

    • Oh no. A secret CC account. Luckily you were in the position to take care of those and get your family off on the right foot. Couldn’t agree more with your approach to clearing out the bad debt; stuff happens. You buried it and moved on from it all.

      I am not looking forward to the cost of day care and child care. It will take a serious chunk out of our income streams and we have talked about the trade-off of having less income and having my wife watch the kids versus having her work just to cover the cost of day care. I feel like there really is no good option for that expense. How many more years are you on the hook for?


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