How Katie Austin Destroyed $50K in Student Loan Debt

student loan debt

When she graduated from college in 2011, Katie Austin was one of the 44.2 million Americans with student loan debt.

Katie started with about $100,000 in student loans; today, she has $0 in student loan debt. Katie had help from her parents, who agreed to pay half the debt, but she was still left $50,000 in student loans to take care of on her own.

Looking at that number, she wasn’t sure what to do.

Destroying debt is never an easy task. It’s even harder when you live in expensive cities like Los Angeles and San Francisco. However, with a plan, a lot of determination, and the right network, it’s possible to demolish your debt faster than you might think.

Deferred payments and food stamps

Katie didn’t start out with the idea that she would aggressively tackle her student loan debt. In fact, one of the first things she did after graduation was fly to Europe. She was able to defer her payments during that time, but that put her a bit behind.

After returning to the United States, she worked as a temp in Austin, making very little money. Katie didn’t think she could begin paying down her debt in earnest because of her low income. “Then I moved to Los Angeles,” she said. “Things were even worse. I was wicked poor and living on food stamps.”

The first turning point in Katie’s journey to paying off $50,000 of debt was landing a job with Lyft. She worked as a launcher, traveling from city to city recruiting drivers. “I didn’t have an apartment. I had a salary and a per diem. Lyft was basically paying for my life.”

It was then that Katie began making payments on her student loans. Even then, it didn’t occur to her to pay the debt off early. “I just made the minimum payments and frittered away the rest.”

One day, shortly after moving to San Francisco, Katie looked at her loan balances and realized that she had enough money to pay off her smallest student loan. It was only a couple thousand dollars, so she just knocked it out. She increased her monthly payments from $250 to just over $500 a month to pay it off faster.

Then she got a new job with ActiveHours as the communications lead and attended FinCon, an annual conference for the financial media community. It was an eye-opening experience for her. Katie became serious about demolishing her debt and made a plan.


Katie’s first step was to refinance her student loans. With her the loans in one place at a single interest rate, it was easier to keep track of everything. It also meant more of her payments went to the principal.

Analyze your budget

After the experience of frittering away her money, Katie decided it was time to analyze her budget. She realized putting $500 a month toward paying off student loan debt was insufficient. Once she looked at the numbers, Katie realized she could put $1,600 toward her debt each month.

That made a big difference. You can pay off your student loan debt quicker by tripling your pay down amount.


Next, Katie knew she had to make it automatic. Having her student loan payments on autopay helped her stick to her spending plan. “I figured I’d be too lazy to change the plan,” she said. “It was easier to just decide not to buy things than go in and change my autopay.”

Change spending habits

Katie realized she was spending money on things she didn’t need. Her constant travel while working for Lyft confirmed her love of minimalist principles. But she also realized she could do plenty of other things to cut back on her spending.

She changed her car insurance. Started going to Safeway instead of Whole Foods. Ate out less. Katie even started freelancing to make money on the side.

It also taught her to stick to her goals and priorities. Rather than being tempted for nights out, she learned to say no. “The cool thing about having this major financial obligation is that you have a ready-made excuse,” Katie said. “When people ask you to do things you’re lukewarm toward, you can just tell them you’re paying off your student loans and can’t.”

Utilize her network

The fact that Katie’s parents stepped in to take on half her student loan debt was the biggest help. However, she also had other help.

Katie’s trip to FinCon introduced her to others living the debt-free lifestyle. She learned about the importance of a positive mindset and surrounding yourself with like-minded people. Knowing others were out there doing the same thing buoyed her up and helped her stick to her plan.

Not only that, but her boyfriend also helped. He bought a portion of her debt through WeFinance and didn’t charge her interest. “Once I didn’t have to worry about interest, it really helped me pay it down faster,” Katie said.

Know your end date

Finally, Katie said, it helped to concentrate on the fact that you can live with almost anything for a short period of time. Because she was so aggressive and planned to pay off her debt quickly, Katie knew she would only have to deal with the restrictions of her budget for a couple of years.

“Having an end date was a real help,” she said. “You may have to give up stuff for a year or two, but it’s bearable because you know exactly when you’ll be done.”

What about the buffer?

Katie acknowledged that she was a little uncomfortable at times. She put so much toward paying down her student loan debt that she didn’t build an emergency fund. “I knew I might be screwed if things went wrong.”

On the other hand, once her boyfriend bought her debt, she breathed a little easier, knowing she could make arrangements if necessary. She also said that she felt some confidence that her parents could help if things got really bad – although she didn’t want to go to them.

In the end, Katie got lucky. She didn’t have any health problems or unexpected expenses. However, she doesn’t recommend living as close to the edge as she did. “That buffer is really necessary,” she said. “Sometimes I wish I had built something up.”

After the student loan debt

Katie made her last student loan debt payment early in January 2017. Now, she’s trying to figure out what to do with the extra money she will have each month. “I just got my first paycheck where most of the money isn’t going to student loans,” she said. “I need to figure out what to do with that money now.”

She knows she doesn’t want to just mindlessly spend the money, though. “I want to spend wisely. This money isn’t for shopping sprees and eating out.”

Katie thinks she’ll put a good chunk of it toward retirement savings and other goals, including travel. In order to stay on track, she plans to set goals and check in with her boyfriend. They sit down each month and talk about what they want to do. Then they help each other stay on track.

“Knowing I’m accountable helps keep me in check,” Katie said.

In the end, Katie is glad she took an aggressive stance toward her student loan debt. Now she’s debt-free and she has more options. While she understands that not everyone has the same help she did, she does think it’s possible for most people to pay off their debt with planning and determination.

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