Can you imagine paying off a $74,000 debt in two years — and then deciding to do it all over again? 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.
It’s never easy to accept that the thing we invested in studying has turned out to be the wrong choice. And the thought of investing more money into a different education could be almost too much for some people to consider.
But Matthew realized what he wanted and wasn’t going to stay stuck. Since he had already knocked his student loan payoff out of the ballpark once, he knew he could do it again.
Now, he’s about to finish an MBA, has landed a job as a professor at his alma mater, and is running his own business. Here’s how he’s managing to do it all — and how he plans to replicate his student loan debt payoff success.
Paying off $74,000 in two years
When Matthew graduated with his bachelor’s and master’s degrees, he was left with $74,000 of debt. Once he calculated the interest he was paying on his student loans each month, he decided to act fast.
As Matthew tells it, he was a few months into his repayment when he started tracking it and discovered that it was increasing by $100 every week. Incredulous that it was moving that fast, Matthew’s feelings then turned to anger that so much money was being made off of his payments. That was all the motivation he needed.
Even though some of his friends thought it was too ambitious, Matthew decided he was going to pay it all 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 returns to make lump-sum payments on his debt.
Matthew was paying anywhere from $2,500 to $4,000 per month on his loans — all because he decided 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.
Matthew attributes his success in paying off his $74,000 student loan debt in two years to sacrifice, dedication, and goal setting.
Deciding to jump back into school — and more student loan debt
One of the best things about paying off debt is the freedom of choice it brings. Just as Matthew was paying off his student loan debt, he also realized that he wanted more from his career.
Having transitioned into building his own business as a human resources consultant, Matthew started to feel “handcuffed to HR.” In reality, he’d always wanted an MBA and began to understand that the work he most enjoyed involved finance and operations.
At the same time, Matthew scored a gig as an adjunct professor at his undergraduate alma mater, Elmira College. He realized an MBA would help him teach even more courses and open up more opportunities to do the work he craved.
So, Matthew made the calculated decision to leap into graduate school again.
With or without the MBA, things are going well for Matthew. His hard work paid off and led him to debt freedom. He was able to celebrate with a dream trip to Ireland, and was given the opportunity to move out of adjunct and become a full-time professor at Elmira.
Of course, that also means he’s busier than ever. Now in the last few months of his MBA program, Matthew is teaching full-time and running his consultancy. And he makes sure to talk to his students about debt so that they can be empowered to face it head-on and with a winning strategy.
But what about that looming debt?
Next up: Pay off $117,000
Why would someone who already paid off a significant amount of debt go back into it? In short, Matthew wasn’t afraid to wade back into debt since this was a problem he could solve.
To be clear, Matthew is not a fan of debt. In his words: “I don’t believe in good debt and bad debt. I believe there is horrible debt and bad debt. I don’t want any debt.” It’s all about taking it “one day at a time” and looking for small victories to create and celebrate.
And it doesn’t hurt to enable your friends to motivate you either. As Matthew says, “I’m surrounded by a network of people that are supportive and keep me focused.”
Finally, Matthew understands that the situation is temporary, which makes it easier to stay focused. “I work all the time. It’s the decision I’ve made right now to achieve the goals I have for myself. Yes, it’s hard work, but the harder you work, the luckier you get.”
What we can all learn from Matthew’s success
Once he finishes his MBA this winter, Matthew plans on having the same exact budget he had before, although the higher amount of debt could mean stretching the two-year payoff goal.
The principles he lived by the first time, and plans to use again, are principles that we can all follow in our financial journeys:
- Know the difference between a want and a need.
- Avoid mass marketing and its creation of a desire for instant gratification.
- Learn to sacrifice and live off of very little.
- Create a budget.
- Avoid credit card debt.
- Prioritize for basic needs and saving for wants.
And seeing how much you can save if you get rid of those student loans faster doesn’t hurt, either.
All of this is simple enough in theory but can require a great deal of focus to maintain. In the end, the reward can make it all worth it — a life free of student loan debt.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 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% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 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.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). 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 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|