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Imagine paying off your student loans in two years — and then deciding to take on yet more debt. When assistant professor and HR consultant Matthew Burr realized his choice in a master’s program prevented him from growing beyond his specialty in human resources, that’s just what he did — after paying off $74,000 in his first round of student loans.
The thought of investing more money into education after finally paying off a mountain of student loan debt may seem overwhelming. But Burr realized what he wanted and went for it, with strong results. Here’s how he managed to do it, and what his experience can teach you about managing your own student loan debt.
How to pay off $74,000 in student loans in two years
Living on less than $1,000 per month to pay off student loans
Taking on more student loan debt
Paying off new student loan debt
What you can learn from Burr’s success
Some other options for managing your student loan debt
When Burr graduated with his bachelor’s and master’s degrees, he was left with $74,000 in student loan debt. Once he calculated the interest he was paying on his student loans each month, he decided to act fast.
As Burr tells it, he was a few months into his repayment when he started tracking the interest and discovered that it was increasing by $100 every week — and that was all the motivation he needed to start paying off his debt, fast.
Just as Burr did, you too can calculate the interest on your own student loans to see how much interest you’re paying every month, and how much of your payment is actually going toward the balance of your loan. Go to Student Loan Hero’s interest repayment calculator here.
Burr aimed to pay all his student loans off in two years, so he created a budget that had him living off of less than $1,000 per month.
Living in Northern Michigan and being able to find reasonable rent certainly helped, but so did a decision to use only basic cable, to not buy a new car when his current car was paid off and to avoid credit card debt. He then used a signing bonus at his first job and all of his tax refunds to make lump-sum payments on his debt.
Burr was paying anywhere from $2,500 to $4,000 per month on his loans — all because he decided a speedy payoff was more important to him than fulfilling any instant gratification that spending his hard-earned money would bring.
And it worked. In fact, it worked so well that he decided to write a book about paying off his debt. Burr attributes his success in paying off his $74,000 student loan debt in two years to sacrifice, dedication and goal setting.
So why would someone who already paid off a significant amount of debt go back into it? In Burr’s case, he’d always wanted an MBA, and realized the work he most enjoyed involved finance and operations.
He wasn’t afraid to wade back into debt, as he already knew this was something he could manage. Thus, he pursued his MBA dream, going into $117,000 in debt for the new degree.
And so far, he has yet again been successful in paying his student loan debt off. As of April 2020, Burr has not only paid off a significant chunk of the MBA he completed in 2017, but he has in fact taken on even more debt for another degree — a master’s of jurisprudence in labor and employment law.
“Thus far, I have paid off roughly $102,000 in student loan debt in 26 months and owe roughly $15,000” on the MBA, Burr said.
His third master’s degree is in progress, due to be completed in May 2021. At time of writing, Burr stated he currently has around $31,000 in debt.
“My goal is to have all debt cleaned up by mid-2021, and owe $0 on student loans forever,” he said.
He noted that he’s using the same methods he did the first time to manage his debt this time: living well below his means, avoiding other debt and paying for everything in cash when possible, keeping the student loan interest accruals as close to zero as possible and paying the higher-interest loans first (he has three loans in total). While concentrating on the higher interest debt first, Burr is using the avalanche method of debt payoff. This differs from the snowball method, which would have him focusing on paying off the smaller loan balance first.
The principles Burr has lived by can provide lessons for all of us when it comes to paying off student loan debt:
- Understand how much you’re really paying in interest.
- Create a budget.
- Learn to sacrifice and live off of very little.
- Avoid other forms of debt, such as credit card debt.
- Consider whether you want to focus on the higher-interest payments first (avalanche method) or pay off the smaller loans and move on to the higher ones as you do (snowball method).
Seeing how much interest you can save if you get rid of those student loans fast can be a real motivator. You can check out our prepayment calculator to get a better idea of how getting rid of your student loans fast might impact your overall payments.
Burr’s experience represents one person’s strategy for paying off student loans quickly. Here are some other options you can consider as well.
- Refinancing: Refinancing often works best with private student loans, but it’s also possible to refinance federal student You’ll have to refinance with a private lender, so you’ll give up the benefits that automatically come with having federal loans, such as income-driven repayment and loan forgiveness programs. Consider all factors carefully before you take this step. If you do decide refinancing is right for you, explore your options with these student loan refinancing lenders. You can also check out Student Loan Hero’s refinancing and refinancing vs. consolidation calculators to further explore these options.
- Student loan forgiveness and income-driven repayment programs: Depending on the field in which you work, particularly if you are in public service or education, you may be able to get some or all of your debt forgiven. You can also look into income-driven repayment programs, which can lower your payments to as little as 10% of your discretionary income.
- Deferment or forbearance: In times of financial hardship, you may be able to temporarily stop making student loan payments by taking advantage of deferment or forbearance
Check out our deferment, income-based repayment and public service loan forgiveness calculators to further explore your options. Here, as well, is a guide specifically to repaying student loans for your MBA.
Shannon Insler contributed to this report
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 8.70%1||Undergrad & Graduate|
|1.74% – 7.99%2||Undergrad & Graduate|
|4.44% – 8.09%3||Undergrad & Graduate|
|1.74% – 7.99%4||Undergrad & Graduate|
|1.89% – 5.90%5||Undergrad & Graduate|
|1.74% – 7.99%6||Undergrad & Graduate|
|2.05% – 5.25%7||Undergrad & Graduate|
|1.86% – 6.01%||Undergrad |
|N/A8||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for CommonBond.
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. 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 Apr 22, 2021 and may increase after consummation.
4 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. 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. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
5 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
6 Important Disclosures for Navient.
7 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.