Caitlin Navratil found herself needing a dose of inspiration, and she found it among Student Loan Hero’s success stories.
“[I saw] people who had significantly more debt than I did pay it off so well and so quickly,” Navratil said. “It made me feel like, well, if they did it [owing] $126,000, then for sure I can do [it] with less than $20,000.”
Find out how this inspired 2016 graduate paid off $14,515 in student loans in just 10 months thanks to the following strategies (and a little bit of help).
Taking out student loans midway through college
Navratil worked hard to secure scholarships that covered her freshman and sophomore years at Bethel University in Minnesota. When her junior year was approaching, however, she was hit with a bombshell.
“I vividly remember being handed like, ‘Here are your loan limits for the year that you are in college,’ and I was like, ‘Loan limits? I don’t even know what I’m taking out here,'” she said. “And so I had a conversation with a financial aid person. I did understand the concept of, ‘OK, I’m taking this out and having to pay it back,’ but the concept of an interest rate just kind of blew my mind.”
Navratil took out the most she could from the federal government — $7,500 in Direct Loans — and borrowed the remaining $7,015 from her parents. Her fear of private lenders had convinced her parents to keep the debt in the family. She also got a much friendlier interest rate that way.
“My parents charged me 3%, but it didn’t start accruing until after I graduated,” she said. “So, a subsidized family loan, if you will.”
Scared to borrow a second time from the government, her parents, or anyone else, Navratil estimates she saved herself an extra $15,000 by dropping her double major as a senior and graduating a semester early.
Finding her repayment mojo
Now that she works for Thrivent Student Resources, Navratil looks back on her college experience and wishes she’d done more to prepare for repayment, such as working a paying internship or part-time job between classes.
Instead, Navratil did what many borrowers do — she waited. In fact, she didn’t spring into action until the end of her six-month grace period, the cushion federal loan servicers are required to give new graduates before their first bill comes due.
“It just was like a time bomb in my mind I knew that was coming,” she said.
Navratil was also spurred on by her getting a job at Thrivent in 2017, at which point she learned about Student Loan Hero’s content and tools.
She added that watching the “Broke, Busted, and Disgusted” documentary, which details the traumatic effects of student loan debt on real-life borrowers, pushed her to be proactive.
“[People] who had so much more debt than me were talking about how crippling it was later in life,” she said. “I think that like wormed its way in my head and heart, that if I keep paying this off over 10 years then I’m not going to get to do other things that I’m hoping and planning to do with my life.”
Settling into a repayment strategy
Plenty motivated, Navratil threw everything she had at her debt. Her entry-level salary and bonus from Thrivent and her side hustle income as an Alpine skiing coach made up the majority of her payments.
What helped her most of all was an assist from her parents. They repaid the original federal loan with their savings. Then they asked their daughter to repay them with a very low, very generous 3.00% interest rate. Call it in-family student loan refinancing.
Navratil also decided to live at home full time, and she’s the first to admit what a “privilege” that was for her.
“I know my friends were living downtown, and there [are] things that I didn’t get to partake in,” she said. “But because I didn’t have a rent payment, all of the money that would be going towards that I put toward my loan every month.”
Initially, Navratil hoped her strategy would zero her debt within three years. But after using our student loan prepayment calculator, she used a downloadable Microsoft Excel spreadsheet that her dad found online to get her on a 10-month payoff schedule. Here’s what that spreadsheet looked like:
Navratil spent those final months attacking the debt like nobody’s business. Her final payment was for $3,735.84.
Developing the right mindset for the repayment journey ahead
You might not be able to mimic Navratil’s exact repayment story. Maybe you borrowed a lot more, have had lesser luck finding your first job, or don’t have parents in a position to help.
But you can adopt Navratil’s mindset — to pay off your debt as quickly as reasonably possible so that you can progress toward your more important financial goals.
Navratil’s best advice is to take advantage of your grace period.
“My biggest regret is not using those six months to start chipping away at it or to not let it compound with interest,” she said. “That would be my piece of advice, to not push it toward the back of your mind.”
Ultimately, Navratil said, you should kick-start your student loan repayment journey as soon as you can on your own terms, not when you’re forced to start paying it back.
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