How to Pay Off $60K in Student Loans in 3 Years (While Making Only $30K)

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Originally published July 16, 2018.

Most of us don’t learn how to pay off $60,000 or more in student loans in school. But you might find yourself managing debt of that magnitude, especially if you take out loans for both undergraduate and graduate school.

That was the case for Robbie Eleazer when he graduated from the Southern California Institute of Architecture (SCI-Arc) with $60,000 in student loans. Plus, he had the added challenge of a relatively low income. But with a little work, he was able to pay his big debt in a small amount of time.

“I was only making $30,000 a year,” said Eleazer. “My rent was $900 a month, and my loan payments were $1,200. But I was only making $2,500, leaving me with about $400 for everything else.”

It was then that Eleazer got serious about paying off the debt. Although his annual salary was only $30,000, he was able to pay off his debt in only two and a half years.

How to pay off $60k in student loans, even with a low salary

Here’s how the future architect tackled his student loan debt quickly on a small salary — and how you can do the same:

1. Do a cost-benefit analysis
2. Get good at budgeting
3. Adopt the debt snowball method
4. Take on a side hustle
5. Put any extra money toward debt

1. Do a cost-benefit analysis

Eleazer’s get-out-of-debt plan started before he even incurred $60,000 in student loans. He went to a state school for his undergrad education to keep costs down, then analyzed his options for graduate school. He could pay $50,000 a year at Columbia University or $15,000 at SCI-Arc.

“For architecture, [the] salary is based on experience, and where you went to school doesn’t matter so much,” he said. “You aren’t going to get a big salary right out of school. So, I sat down and projected out my salary for the next 10 years next to my debt.”

His projections made the decision easier. “It was clear I couldn’t afford to go to Columbia,” he said, and advised “do[ing] the math before you make the student loan decision.”

Check out job-hunting websites to research average salaries for your desired profession and use our student loan payment calculator to determine what your monthly loan cost would be versus your income. This cost-benefit analysis can help you decide if the grad school you want to go to is worth it.

2. Get good at budgeting

For a couple of years, Eleazer wasn’t going out and having fun in Los Angeles like some of his peers.

“I was eating and living very frugally,” he said. “My apartment was cheap for L.A., I didn’t spend money on dinners out and [I] bought the cheapest version of my necessities.”

To make a solid budget, write down your necessary expenses, including rent, student loan payments, food and utilities. Then, examine your credit card bill and bank statements to see where else your money is going. Ask yourself: Where can you cut back? Can you cancel that cable subscription? Can you find a cheaper apartment? Can you cook at home more?

All these tweaks will add up to big savings, which means you’ll have more money to put toward your student loan debt.

“It hurt my social life living on an extreme budget,” said Eleazer. “But in the long run, I was ahead. I get to live a different lifestyle now being debt-free.”

3. Adopt the debt snowball method

Shortly after graduating, Eleazer got exposed to author Dave Ramsey and adopted the debt snowball method he popularized.

“He has easy-to-follow rules,” Eleazer said. “List your debts from smallest to highest, regardless of interest. You pay off your smallest first while paying the minimums on the others because it gives you a high. Then, use the money from the small payment and put it toward the next debt until everything is paid off.”

Let’s say you have student loans with balances of $5,000 and $10,000. Pay off the $5,000 loan first while paying the minimum monthly balance on the $10,000 one. Once you repay the smaller loan, use that monthly payment money to pay down the $10,000 debt. Keep following that pattern until you’re debt-free.

You also can look into the debt avalanche method, which focuses on the interest rates of the loans rather than the balance while paying down debt.

4. Take on a side hustle

If you aren’t making enough money, you need to figure out how to earn more.

“In addition to my job, I found side work,” he said. “Find ways to supplement your income. I worked nights and weekends teaching workshops at UCLA, worked for professors and spoke at seminars around the world to bring in extra cash.”

Eleazer was able to find side gigs that were in his line of work, but you can take on a variety of side hustles that don’t require a particular background. Become an Uber driver, deliver food for DoorDash or help someone with some handy work with TaskRabbit, to give a few examples.

5. Put any extra money toward debt

Bringing in extra income through your side hustle is only half the battle — you need to put that money toward your debt.

“I still always lived like I only had that $400 a month,” said Eleazer. “All of the money I made from my side hustle, which was about $10,000 to $15,000 a year, went toward paying my student loan debt. Then, I got a $4,000 gift from my grandmother and $2,000 from my now-wife. Every penny went to the debt.”

If you get a bonus, tax refund or birthday money from your mom, resist the urge to spend it on a new pair of shoes. Instead, pretend like you don’t have that extra income and put it immediately toward your loans. This effort will help you tackle your debt quickly.

Paying off your student loan debt fast

It can seem daunting to repay your student loans when you’re not making much money. But it can be done. Eleazer made sacrifices for a few years, but he now can live a life free of money concerns.

These tips could help you get out of debt without having to worry about bringing home the big bucks (of course, that would help, too). If you make more money, you should put it toward paying off your debt before using it for any other type of spending.

“My relationship to money has changed completely,” said Eleazer. “I still live by the philosophy to never stop working even when you pay the debt off.”

“It’s now a lifestyle choice,” he added. “I have fun, but spend money differently than other people do.”

For more strategies, including refinancing, head to this guide on how to pay off your student loans faster.

Rebecca Safier contributed to this report.

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3.80% – 9.36%3Undergraduate and Graduate

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2.20% – 6.17%4Undergraduate and Graduate

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1.05% – 11.44%5Undergraduate and Graduate

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1.82% – 11.32%6Undergraduate

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N/A7Undergraduate and Graduate

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1.12% – 11.23%8Undergraduate and Graduate

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1.15% – 11.01%9Undergraduate and Graduate

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* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
 
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 7/22/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.


2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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.  If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. 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 0.15% effective Jan 1, 2021 and may increase after consummation.


4 Important Disclosures for EdvestinU.

EdvestinU Disclosures

EDvestinU is a product of the nonprofit New Hampshire Higher Education Loan Corporation (dba The NHHEAF Network) NMLS ID#1527348.

APR range and repayment rates displayed assume a $10,000 loan disbursed in two equal disbursements. APR low assumes immediate repayment and 7 year repayment. APR high assumes deferred repayment and 15 year repayment. APR’s presented include a .50% interest rate reduction for electing to have payments automatically deducted from a bank account. The interest rate reduction for authorizing our servicer to automatically deduct monthly payments from a savings or checking account will not reduce the monthly payment, but will reduce the monthly finance charge, resulting in a lower total cost of loan. All examples are provided for educational purposes and actual terms may vary based on credit history, loan amount, applicable repayment term, and chosen repayment plan and method. Please note that the interest rate on variable rate programs may increase or decrease over time. The variable rate example assumes the same standard rate for the life of the loan. The NHHEAF Network reserves the right to modify or cancel its program at any time.  

Eligibility: Dependent and independent U.S. citizen students. Currently residents of Washington and California are not eligible for EDvestinU programs.
Students must be enrolled at least half-time at a U.S.-based Title IV, degree-granting college or university.
The borrower or cosigner (if applicable) must have a minimum adjusted gross income of $30,000.

Loan Limits: Minimum loan amount of $1,000.
Maximum loan amount is cost of education less aid received.

Repayment: Standard or graduated repayment options available during repayment; 7, 10, or 15 year term selected by the borrower.
6-month grace period available to borrowers electing a full in-school deferment. 
No prepayment penalty.
Payments may be postponed during repayment by qualifying for an economic hardship deferment.

Cosigner Release: Cosigner release allowed if an account is in current standing, after 36 months of consecutive & on-time payments with a borrower FICO >749 for EDvestinU Private Student Loans and minimum income requirement of $30,000 with no foreclosures, repossessions, wage garnishments, unpaid tax liens, unpaid judgments or other public records having an open balance exceeding $100 during the last 7 years. The borrower must not currently be involved in bankruptcy proceeding or had any bankruptcy filings during the past 10 years and cannot have any defaults on education loans.


5 Important Disclosures for Earnest.

Earnest Disclosures

  1. Rates include 0.25% Auto Pay Discount
     
  2. Explanation of Rates “With Autopay” (APD)
    Rates shown include 0.25% APR discount when client agrees to make monthly principal and interest payments by automatic electronic payment. Use of autopay is not required to receive an Earnest loan.

    Available Terms
    For Cosigned loans – 5, 7, 10, 12, 15 years. 
    Primary Only – 10, 12, 15 years

    In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).


6 Important Disclosures for Ascent Student Loans.

Ascent Student Loans Disclosures

Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: >AscentFunding.com/Ts&Cs;.

Rates are effective as of 07/01/2021 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes income-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: >AscentFunding.com/Rates.

1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.


7 Important Disclosures for Funding U.

FundingU Disclosures

Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.


8 Important Disclosures for SoFi.

sofiDisclosures

UNDERGRADUATE LOANS: Fixed rates from 4.13% to 10.66% annual percentage rate (“APR”) (with autopay), variable rates from 1.12% to 11.23% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 10.90% APR (with autopay), variable rates from 1.10% to 11.34% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.08% to 10.86% APR (with autopay), variable rates from 1.05% to 11.29% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 10.66% APR (with autopay), variable rates from 1.20% to 11.23% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. 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. Information current as of 4/1/2021. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (>www.nmlsconsumeraccess.org).


9 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

Undergraduate Rate Disclosure: Variable interest rates range from 1.15% – 11.01% (1.15% – 10.24 APR)Fixed interest rates range from 4.18% – 11.70% (4.18% – 10.83% APR).

Graduate Rate Disclosure: Variable interest rates range from 1.89% – 10.66% (1.89% – 10.41% APR). Fixed interest rates range from 4.64% – 11.23%% (4.64% – 10.95% APR).

Business/Law Rate Disclosure: Variable interest rates range from 1.89% – 9.22% (1.89% – 8.50% APR). Fixed interest rates range from 4.38% – 10.44% (4.38% – 9.72% APR).

Medical/Dental Rate Disclosure: Variable interest rates range from 1.89% – 8.02% (1.89% – 7.72% APR). Fixed interest rates range from 4.28% – 9.24% (4.28% – 8.94% APR).

Parent Loan Rate Disclosure: Variable interest rates range from 1.97% – 7.06% (1.97% – 7.06% APR). Fixed interest rates range from 4.94% – 8.58% (4.94% – 8.58% APR).

Bar Study Rate Disclosure: Variable interest rates range from 4.44% – 9.58% (4.44% – 9.52% APR). Fixed interest rates range from 7.39% – 12.94% (7.40% – 12.83% APR).

Medical Residency Rate Disclosure: Variable interest rates range from 3.53% – 7.03% (3.53% – 6.76% APR). Fixed interest rates range from 6.99% – 10.49% (6.98% – 10.09% APR).

Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of June 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%. 

Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer.  Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.