5 Borrowers Share What Their Student Loans Taught Them About Money

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lessons from student loan debt

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Student loan debt can be scary and stressful — but it can also teach valuable lessons about personal finance.

Instead of focusing on the challenges, I asked borrowers to consider what they learned from having student loans. How has their debt made them better at managing money? What advice do they have for other student loan borrowers in their shoes?

Here are the lessons these five borrowers learned from dealing with student loans — and what they hope other borrowers will learn, too.

1. Budgeting is essential to meeting your goals

Zina Kumok owed close to $28,000 in student loans after graduating from Indiana University Bloomington. With monthly loan payments of $350, she quickly learned she’d need to change her spending habits.

“Before I started repaying my student loans, I definitely had a spending problem,” Zina says. “I would buy clothes I didn’t really need or makeup I didn’t wear. Going to the mall and leaving empty-handed was impossible.”

To take back control of her finances, Zina created a budget and stuck to it. “I learned how to live on less and how to stop myself from buying something unless I really wanted it,” she says. “I really learned how to control my impulses.”

For instance, Zina would impose a 24-hour rule before making a big purchase. More often than not, she’d end up forgetting about the item entirely before the day was done. She also learned to identify her spending triggers.

“I would shop when I was bored or feeling sad,” says Zina. Instead of shopping to feel better, she developed low-cost hobbies. “Right now I’m really into drawing, which is really cheap to do,” she adds. “I also like sewing, which is pretty affordable once you get a machine.”

Plus, she learned the value of a good Netflix session with friends.

“Honestly, hanging out with people is the best way to feel better, especially if you hate your job or are feeling lonely,” says Zina. “I watched a lot of Netflix with friends when I was first paying off my student loans — it wasn’t any worse than having a few drinks at the bar, but much cheaper.”

Thanks to her budgeting efforts, Zina paid off her loans in just three years. Now she helps other young people learn to budget and pay off student debt on her blog, Debt Free After Three.

2. You can save money while paying off student loans

When monthly student loan payments eat up a big chunk of your paycheck, it’s hard to think about saving. But building an emergency fund — and even putting money aside for retirement — can still be a priority.

Clemson University graduate Ciara Hautau learned to build up her savings account, even as she paid off major student debt. “I have made a conscious effort to put half of my paycheck into my savings account,” says Ciara, who now works as a marketing coordinator. “My rule is to not touch anything in my savings unless it’s an absolute emergency.”

Saving so much has not been easy for Ciara, who lives in New York City, one of the most expensive places in the U.S. “Living in NYC and having student loan debt is like having an anchor tied to your ankle,” she says. “Sometimes you feel as if you are drowning, but there are ways to manage.”

For Ciara, the expense-tracking app Mint saved the day. “I started tracking how much I was spending on food, going out, luxury items (such as makeup), gas, etc.,” she says. “Every week, I’d set a percentage of how much I wanted to spend on each of those categories and checked my Mint account frequently to make sure I wasn’t going overboard.”

By tracking her spending, Ciara was able to save while paying off her loans. “Balancing loans and big goals can be stressful and seem overwhelming, but breaking up your goals into digestible benchmarks and developing a plan week by week, month by month can make the process more manageable,” she explains.

Plus, now that she has money in her savings, Ciara is financially protected in the event of an emergency or unemployment. “Not touching my savings provides a huge amount of comfort in case anything should happen with my job,” she adds.

3. Extra loan payments cut down interest costs

It’s tough to make extra payments on your student loans when you could use your money in more fun ways. But if you can make extra payments on your student loans, you’ll get out of debt ahead of schedule. Plus, you’ll spend way less on interest in the long run.

“Snowball your loan payments by throwing as much money at them as possible,” says Jordan Slavik, a University of Maryland alum who took out $30,000 in student loans. “The more you are willing to contribute to your loans each month, the less money you are wasting on interest payments, and the less the interest payments will be each month as well.”

Let’s say you had $35,000 in student loans at a 5.70% interest rate. If you paid $383 per month on the standard 10-year plan, you’d pay $10,998 in total interest. But if you could make an additional $73 payment each month, you’d pay only $8,637 on interest. Plus, you’d get out of debt two years sooner.

“By only paying minimum payments, it may take you five to ten years of payments and thousands of extra dollars in interest payments,” says Jordan. If you’re able to increase your payments — whether occasionally or on a regular basis — you could save on interest and move much closer to a debt-free life.

4. Lifestyle inflation can kill your budget

As you gain professional experience in the years after college, your paycheck will hopefully increase to match. But instead of upgrading your car and apartment right away, consider sticking to the same budget you had right after graduation.

That’s how Kevin Han, the attorney behind personal finance blog Financial Panther, was able to pay off his student debt. “The key lesson I learned from having student loans was the value in avoiding lifestyle inflation,” he says.

“I’ve always pointed out that most people seem to live perfectly fine when they’re a student, but then inflate their lifestyle dramatically once they get their first paycheck … If you can just live like a student for a few more years, you can really set yourself up well financially,” he adds.

By sticking to this principle, Kevin was able to shed his student debt quickly. “I personally paid off $87,000 worth of student loans in just two and a half years by choosing not to live like a ‘big shot’ lawyer,” he says.

By resisting the urge to inflate your lifestyle all at once, you can free up more of your budget to save and get rid of debt.

5. A long-term debt strategy is crucial

Lots of borrowers feel hopeless and stressed about their student debt. And while the challenges of student loans can’t be minimized, it is possible to pay them off over time. After years of barely making a dent in her debt, Adrienne Ross proved to herself she could turn things around.

“By the time my husband and I had graduated from college, we had racked up close to $30,000 in student debt,” says Adrienne. “Fast forward a couple of years and imagine our surprise when we realized that our regular monthly payments had barely moved the balance we owed.”

Although she felt discouraged, Adrienne was proactive about changing her payoff approach and settled on the debt snowball method.

“We decided to jump start our repayment plan,” she says. “We started with the smallest loan first and threw every bit of extra cash we could scrape together toward paying it off. Paying off that first loan felt amazing!”

Once they had that first taste of success, they were motivated to continue. “Each loan that we paid off gave us the excitement and confidence we needed to keep going.”

For Adrienne, the snowball method made her student debt manageable. “Breaking down the process of repaying our loans in this way taught me that I can accomplish anything,” she says. “The key is to break big goals into small steps and track your progress.”

Hopefully, the lessons above can help you get out from under your student loans. Even with a mountain of student debt, every small step will get you closer to financial freedom.

Interested in refinancing student loans?

Here are the top 6 lenders of 2020!
LenderVariable APREligible Degrees 
1.89% – 6.66%1Undergrad
& Graduate

Visit Splash

1.89% – 5.90%2Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.09%3Undergrad
& Graduate

Visit SoFi

1.99% – 5.34%4Undergrad
& Graduate

Visit Earnest

1.97% – 8.54%5Undergrad
& Graduate

Visit Lendkey

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of December 1, 2020. Information and rates are subject to change without notice.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 2.99% APR to 6.09% APR (with AutoPay). Variable rates from 2.25% APR to 6.09% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.18% plus 2.32% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 

4 Important Disclosures for Earnest.

Earnest Disclosures

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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 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.

5 Important Disclosures for LendKey.

LendKey Disclosures

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.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 11/13/2020 student loan refinancing rates range from 1.97% to 8.54% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.