For years, I felt so overwhelmed by my student loan debt. I borrowed more than my annual salary and my payments were 50 percent of my income. Paying off $81,000 in student loan debt was the hardest thing I’ve ever done; at times, it felt all-consuming.
To be honest, tackling my debt sucked most of the time. I felt bitter and angry that I let myself borrow so much for school. But in the end, I’ve learned a lot from my student loan debt that I don’t think I would have otherwise.
Here are five unexpected lessons you learn from having student loan debt.
1. The power of a dollar
I’ll be honest: I was pretty clueless about money before I committed to paying off my debt. I wasn’t sure how much I really earned, how much I was paying in interest, or how much I even owed.
When I became committed to paying off debt, I calculated how much interest I was paying per day. At the time, I was paying $11 per day toward interest. I was earning a whopping $12 per hour.
Once I realized this, I started to calculate all of my purchases in hours worked — the Starbucks run would be 30 minutes of work, happy hour could easily equate to two hours of work.
Truly understanding how much debt I was in, how much I was paying in interest, and understanding what my income could afford shifted how I thought about money.
I no longer thought of money as this abstract concept, but rather, something concrete that was costing me time. Once I made that mental shift, I had a better understanding of the power of a dollar and my finances have never been the same since.
2. The value of hard work
I was living on a low income, trying to pay off debt for such a long time. At some point, I realized I couldn’t cut back any further and knew the answer was to earn more money instead.
I wasn’t quite sure how to go about it at first, so I took any gig I could get. I started cleaning houses, working events, being a brand ambassador, and doing odd jobs to supplement my income.
I’ve always been a hard worker, but paying off debt lit a fire within me to work even harder. I worked nights, weekends, holidays, and early mornings.
If I was awake, I was probably working. Though it was tough on me mentally and physically, I learned the value of hard work and perseverance. I pushed myself harder than I would have if I were debt-free. I learned new things, met new people, and got out of my comfort zone.
I did all of those things because I had to. If I had the luxury of being debt-free, I probably would have been stuck in my comfort zone, never feeling compelled to move forward or work harder. Working toward debt freedom taught me the value of hard work and how much it can change your life.
I truly do believe hard work pays off … eventually. It may not happen overnight and it could take several years before you realize the benefits, but working hard can change your life and career.
3. How to live on less
Paying off debt helped me understand how to live on less and illustrated the major differences between needs and wants.
I learned how to live on less and without many attachments. I adjusted to living in a small studio apartment with my partner. I found enjoyment from the little things, like baths or a hot cup of coffee, rather than the next shiny, pretty, new thing.
Looking at my income and my debt, my needs and wants became abundantly clear and I realized I didn’t need a lot to survive or be happy. Many of the things I thought I needed were just wants in disguise.
Sure, it was an adjustment at first, but learning how to live on less is something that will help my finances for years to come. It’s also shifted my values to treasure experiences, not things.
4. Patience is a virtue
They say that patience is a virtue — and for the most part, it’s a quality I severely lack. Many people my age have grown up in an environment of instant gratification. If we want something, we can have it NOW.
Through my student loan debt, I’ve learned the art of delayed gratification and how to accept the struggle of working toward something — and how those things make the payoff that much sweeter.
For example, I’ve wanted to move back to Los Angeles and go to Italy with my mom for the past few years. I could have just said YOLO and made it happen, but I knew that my number one goal was to get out of debt; those two things didn’t align with my goal.
So I pushed those secondary goals back while I focused on paying off debt. It was hard, but I stayed motivated knowing how great it would be to reach those goals later, once I was debt-free.
Now that I am debt-free, I have plans to move and go to Italy this year — which will be my mom’s first time abroad! While it may not seem like a big deal, I’ve wanted to do these things for years and have held back in order to continue to pay off debt. Being able to achieve these other goals, without the burden of debt weighing on my shoulders, is that much more gratifying.
5. How to manage money
Paying off debt, for better or worse, forced me to get real with my money. Debt led me to a financial awakening, where I started tracking my expenses, looking at my income carefully, and thinking about my short- and long-term financial goals.
Getting out of debt taught me so much about managing my money and making it work. Who knows? Without debt, I might still be oblivious and not really grasp many of the financial concepts I understand today.
Getting out of student loan debt is tough and definitely not fun, but there are lessons to be learned from the journey that can impact your life for the better.
It’s easy to complain and feel overwhelmed by debt — for today, try to focus on the silver lining. What have you learned from paying off debt that you might not have otherwise?
“If you take on a big financial project or goal, you will learn a lot about who you are and what you can do,” wrote Amanda on her blog Dream Beyond Debt. “Don’t be afraid. A few of the lessons are harder than others, but each and every one of them is a revelation that can change your life if you let it.”
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.44%4||Undergrad & Graduate|
|3.05% – 6.47%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|