Refinancing with Earnest
Refinancing rates from 2.57% APR. Checking your rates won’t affect your credit score.Check out Earnest
As a nurse practitioner, Schauren Hinson made an excellent salary. Bringing in about $80,000 per year out of school, her income should have been enough to afford a comfortable lifestyle.
However, crippling student loan debt — to the tune of $140,000 — ate up huge portions of her paycheck.
“I tried using just savings to pay for school so I wouldn’t have to take on student loans,” Schauren says. “But when I tried to pay for school myself, just one semester emptied my savings. I was literally at zero.”
Out of money, she was forced to take out student loans to pay for her graduate program. Thanks to high interest rates, her loan balance ballooned in size by the time she graduated.
With a huge loan balance hanging over her, Schauren felt limited in what she could do. She started researching all of her options and came across Student Loan Hero. Thanks to the information and tools she found there, she was able to drop the interest rate on her student loans and pay off $75,000 of her debt in one year.
Getting into student debt
When it came time to get an advanced degree, Schauren says the choice was easy: Duke University was her first choice.
Although Duke was an attractive option, the university’s high cost of attendance — today a single semester costs around $38,000 — wiped out her savings. Despite her misgivings about student debt, Schauren was forced to take out loans to pay for her education.
“It’s a great school,” she says. “It’s worth the cost. But I just didn’t have the money to pay for it. And I’d have to borrow so much to pay for school.”
With her savings gone, she had a tough decision to face.
“I was working as a nurse at the hospital at the time,” she recalls. “Even with my income, a grant from the nursing school, and two scholarships, I still couldn’t pay for my degree. I was talking to a coworker about it, and she told me to just take the loan so I could complete my degree faster.”
Even though Schauren qualified for federal loans, the interest rates were still high. “I had eight different loans in total,” she says. “The interest on three of them was 8.50%. The others were 6.80%.”
By the time she graduated, her loan balance had grown to a whopping $140,000.
Tackling her student loans
After her loan grace period ended, the minimum monthly payment on her loans was nearly $1,800. Even with her high starting salary of $80,000, the minimum payment was difficult for Schauren to afford.
Although she tried to keep on the 10-year standard repayment plan, the monthly bill was too high. Schauren applied for an income-driven repayment (IDR) plan, which made her payments more affordable. But, there was a drawback: While the payments were easier for her, interest kept building.
“Every time I made a payment [under the IDR plan], I saw that my balance grew,” she says.
Her payment wasn’t enough to cover the interest charges, so the balance increased with time. She realized that it would take 20 to 25 years to eliminate her loans under the IDR plan.
Refinancing her student loans
With a sense of urgency to pay off her loans, she used Student Loan Hero’s tools to identify her repayment options.
She signed up for the weekly student loan newsletter for repayment tips and learned about refinancing. By refinancing her student loans, Schauren realized she could reduce her interest rates so more of her monthly payments would go toward the principal balance. With a lower rate, she could pay off her loans faster.
When you refinance a student loan, you take out a new loan to pay for some or all of your current student loans. The new loan can have a different interest rate, repayment term, and minimum payment.
Although it can help some people pay off their debt faster, refinancing does have its drawbacks, particularly if you have federal loans.
“It was a little scary,” Schauren says. “By [refinancing student loans], you lose all these federal benefits and protections. But I decided that the risk was worth it to get rid of them faster.”
She shopped around with several different lenders before deciding on Earnest. Not only did they offer her a great interest rate — about 3.00% — but she felt more comfortable with them as a company.
Other lenders had offered her a loan with very little information, which made her nervous about scams. Earnest required more information and documentation, which made her feel the company was legitimate.
“Their process was a little more rigorous, which was reassuring,” Schauren says.
With a lower rate, Schauren was motivated to pay off her debt as fast as possible. She took Student Loan Hero’s advice to heart and started working several side hustles so she could pay more toward her loan.
“I had three jobs at the time and I just put every extra dollar toward my loans,” she says. On top of her job as a nurse practitioner, she also worked on weekends at a local clinic and did home visits. Between her jobs, she was able to put an extra $4,000 per month toward her loans.
“It was a bit lonely,” Schauren says. “I’d work my job, then head straight to my home visit job for a few hours. And my weekends were spent at the clinic. There wasn’t time for much else.”
Although her schedule was grueling, her hard work paid off. In one year, she paid off nearly $70,000 in student loans.
What’s next after paying off her student loans
Schauren managed to pay off her loans in just six years, including the time she spent on an IDR plan. Even though she no longer has student loans, she hasn’t been able to convince herself to give up all of her side hustles yet.
“Not having $140,000 on my shoulders is amazing,” she says. “I feel much more freedom. But I’m still working weekends at the clinic so I can pay off my car sooner and save up an emergency fund.”
For others facing the burden of student loans, Schauren recommends facing it head on.
“I believe your debt is like a ‘your house is on fire’ emergency,” she says. “Don’t spend a dime on anything other than basics and put everything else toward your debt so it’s out of your life.”
If you’re ready to take charge of your debt like Schauren did, check out our ultimate guide to paying off your student loans faster.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Get real rates from up to 4 Lenders at once
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Laurel Road.
Laurel Road Disclosures
2 Important Disclosures for SoFi.
3 Important Disclosures for CommonBond.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 5.87%||Undergrad & Graduate||Visit Earnest|
|2.80% – 6.38%1||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 7.52%2||Undergrad & Graduate||Visit SoFi|
|2.47% – 7.99%||Undergrad & Graduate||Visit Lendkey|
|2.57% – 6.65%3||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.17%4||Undergrad & Graduate||Visit Citizens|