How I Paid Off My $90,000 MBA 736 Days After Graduation

Eric Rosenberg

Updated on August 12, 2019

August 12, 2019March 6, 2020Success StoriesFeatured, Student Loan Repayment1209Eric Rosenberg

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This report was originally published Nov. 19, 2016.

In March 2010, I completed my Master of Business Administration degree at the University of Denver and received my academic hood. Earning an MBA from a private university can be an expensive undertaking, and when I started my studies, the estimated cost for the entire program was nearly $92,000. Tuition alone was $67,000.

Even so, a little over two years after I graduated — 736 days to be exact — I made my final student loan payment. Here’s how I made it happen and how you, too, can pay off your student loans in just a few years.

Before my $90,000 student loan debt

I come from a very academically focused family. I always knew I wanted to follow in my grandfather’s footsteps and get an MBA at an early age. My grandpa managed to graduate from Georgia Tech with an undergraduate degree at 19 and got his MBA a few years later, so I had some tough shoes to fill.

I completed my undergraduate program at the University of Colorado debt-free, thanks to a full scholarship from the Boy Scouts. I then went on to begin my career in banking a couple of months later.

Like many millennials looking to save money after graduation, I moved back in with my parents and started putting aside thousands of dollars each month. After all, my only expenses at that point were my car, a new grown-up wardrobe, and nights out on the town with friends.

It didn’t take long to realize that I was not in the right job, so I left the company after about six months to work on something new. At that point, I had saved the majority of my salary for half a year, which left me with the biggest bank balance of my life.

Working during school

When I left the bank, I started looking for finance jobs in different industries. I also decided it was time to start working on that MBA.

I studied hard and rocked the GMAT, gathered my transcripts and started applying for MBA programs while applying for jobs. I also worked as a restaurant waiter for a few months to keep the cash coming in while I looked for something new.

I decided at that point that I was going to work full-time while getting my MBA full-time. Crazy? Maybe. Hard work ahead? Definitely.

Shortly after getting accepted by my top-choice MBA program, I got a call back from a big telecommunications company I had applied to. A week later, I had a job offer as a financial analyst.

I made it very clear during my interview that I was going to get the MBA and wanted to figure out a way to study and work full-time. There were no surprises when I showed up on day one with an MBA start date just six months away.

I worked out a deal with my boss that I would get all of my work done — putting in time from home on evenings and weekends if necessary — and in exchange I could leave early when needed for my evening classes.

When I started working on my MBA that September, it hit me how hard this was really going to be. However, I knew I could do it if I put my mind to it. I started the journey and made my first MBA tuition payment from a combination of student loans, savings and income from my day job.

Making student loan payments during school

I received a combination of subsidized and unsubsidized Stafford loans to help pay for my MBA program, which added up to a total of about $40,000. The subsidized loans didn’t accrue any interest while I was still in school, but the unsubsidized portion started piling up interest right away. I did not want to see those loan balances grow while I was still in school.

I moved into off-campus housing a month before school started, but knew I had a huge expense in my near future. I found a place with a roommate for $400 per month and kept myself on a strict budget while in school, using an expense tracker to help keep me focused.

I started making student loan payments the month my first loan was issued. Even though no payments were due for over a year and a half, I started making payments of around $250 per month to chip away at the loan balances.

Laser focus on debt repayment

When I graduated with my MBA, I had a big student loan number in front of me, and the subsidy period was ending for the subsidized portion of my loans. With a 6.8% fixed interest rate, I wanted to get my loans paid off as quickly as I could, in order to save thousands of dollars in interest.

I stayed in an inexpensive apartment, with rent of just under $700 per month, and kept other expenses as low as I could. I increased my loan payments as well. Rather than making the minimum payment each month, each payday I paid double the minimum.

In addition, every time I had a cash windfall, such as a tax refund or a bonus at work, I put 100% of that amount into my loans. In my case, that led to an extra $5,000 to $10,000 per year in student loan payments.

With a payoff strategy like that, I was destined to be debt-free in under five years. But that wasn’t good enough for me. Did I mention I hate paying interest?

While keeping my budget low, I watched my checking account balance slowly climb each month. After putting away a modest emergency fund, I started plowing anything left over each month into the student loans as an extra payment. Even after rent, utilities, car expenses and bar tabs, I had at least a few hundred dollars left over each month, which all went into the loans.

The final payoff

Two years later, I found my balance was sitting around $3,700. If I dipped a little bit into my emergency fund (maybe not the best idea in hindsight) and put all of my next paycheck to my loans, I could pay it all off on my next payday.

So I did.

There is one big downside to this story: If my payday had been a week earlier, I could have called this article “How I Paid Off My Student Loans in Less Than Two Years.” However, two years and six days is what it took.

Wherever you are on your student loan journey, do not look at it as something “I can’t do.” Yes, I do have a couple of fancy finance degrees, but there is no reason you can’t do the same thing I did.

Work on growing your income, managing your budget and, as much as you can, putting every cent into extra student loans payments. If you do that, you may just find yourself looking at a balance that you can pay off on your next payday.

Every dollar counts, and paying off your loans all starts with the next dollar. Don’t believe me? Enter your information into our Student Loan Prepayment Calculator to see how soon you can be debt-free.

Peter Fleming contributed to this report.

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Earnest Disclosures 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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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%. 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Enrolling in autopay is not required to receive a loan from SoFi. To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. ⁵ Important Disclosures for LendKey. LendKey Disclosures 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. 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