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

 October 16, 2020
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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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College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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.

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  • Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of September 1, 2022, the 30-day average SOFR index is 2.23%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
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