So You’ve Paid Off Your Student Loan Debt — Now What?

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Cue the orchestra, break out the party balloons and start the celebration: You finally paid off student loans in their entirety.

Now that you’ve checked a massive goal off of your adult “to do” list, you may be wondering what comes next. There are many ways to move forward after loans have been paid, from paying down other forms of high interest debt to tackling your 401(k). Here are some of those possible next steps.

I paid off my student loans

When Rachel Gerner, 34, and her husband Matt, 35, were married in September 2013, they had over $30,000 in undergraduate student loans dating back to 2007 with fairly high interest rates (4% and 6%). Together, the couple had a combined salary of approximately $40,000 from their jobs at the University of Arkansas in Fayetteville.

Matt, who is a chemistry instructor, and Rachel, who works in the information technology (IT) department, managed to pay off their loans by working side gigs in the evenings and on weekends. This included tutoring high school students, teaching English as a second language online, and finding other jobs via Upwork. Rachel also sold her plasma for a few months and Matt picked up a second teaching job for one year.

“We doubled down on the debt because we knew if we worked intensely hard for a season, we could have the satisfaction of being debt-free,” Rachel said.

The Gerners’ student loans were finally paid off in full in 2015, after eight years of diligently paying them back.

“We spent two years tackling our student loans [together] with a combination of side hustles and frugal living,” Rachel said. “We were also very self-disciplined and kept a budget so, at a glance, we could know how much in our accounts.”

5 next steps after you’ve paid off student loans

“So, I paid off my student loans; now what?” you may ask yourself. It’s natural to feel adrift once a goal is met, so here’s a short list of suggestions of what you to do once you’ve paid off your student loans:

1. Celebrate
2. Pay off other high-interest debt
3. Save up an emergency fund
4. Re-energize your retirement contributions
5. Tackle other goals, such as homeownership

1. Celebrate

This is definitely something you want to prioritize after you finish paying off student debt. You’ve just accomplished something significant, so what better time to treat yourself (within reason)?

The reasons to make sure you take time to celebrate are two-fold:

  • Celebrating allows you to relax and regroup before attacking your next big financial goal.
  • Rewarding yourself has been proven to improve your self-control. That means you’re less likely to get back into debt if you take the opportunity to treat yourself.

Whether it’s going on a vacation, upgrading your home decor, or even buying a new pair of shoes, be sure to take the time to savor this success. For example, the Gerners celebrated with a week-long trip to Belize when they paid off their loans.

“It was amazing and a place we had always wanted to visit,” Rachel said.

2. Pay off other high-interest debt

Many college graduates carry credit card debt in addition to student loans. If you have other high-interest debt after paying off your student loans, it’s best to use your payoff momentum to tackle it before focusing your attention on other major goals.

You should especially focus on high-interest debt like credit cards, as these typically have much higher interest rates than the ones that come with student loans.

The Gerners didn’t have any other high-interest debt other than their student loans. They acknowledged that it would have been difficult to pay them off if they had been saddled with credit card debt.

3. Save up an emergency fund

During your debt payoff journey, you may have been contributing every spare penny to paying off student loans. Keeping your eyes on the prize is likely how you were able to meet your goal in the first place.

Now that you’ve paid off your student loans, it’s time to start thinking about the future. Setting up an emergency fund is a good first step. Experts recommend saving three to six months’ worth of living expenses in the event of true emergencies such as unexpected medical expenses, costly home repairs, or a job loss.

This will keep you out of the debt cycle — you don’t want to have to rely on credit cards or personal loans in the event of an emergency, especially after working so diligently to become student loan debt-free.

By funneling your student loan payment amount into a savings or money market account each month, you could save up a sizable emergency fund in no time, which will increase both your net worth and peace of mind.

“We didn’t have any debt other than student loans, so after we paid off the school loans completely, we shifted the extra money into our ‘dream fund’ for personal goals, investing it in laddered CDs, stocks, and bonds,” Rachel said.

4. Re-energize your retirement contributions

If you’ve been putting retirement contributions on hold to pay off debt, now is the time to play catch-up.

Once you’ve paid off student loans, other debts and built an emergency fund, consider automating contributions to your 401(k) or IRA. Remember: The more you contribute to your retirement now, the more time your money has to grow.

“For the last three years, we’ve flooded our retirement accounts, contributing 30 to 40% of our income into our 403(b) accounts and contributing toward HSA accounts,” Rachel said.

5. Tackle other goals, such as homeownership

Now is the time to begin thinking about other major milestones, such as buying a home. Your debt-to-income ratio is now low, or lower, thanks to being debt-free, which will make it easier to qualify for loans such as a mortgage.

Of course, homeownership isn’t for everyone. “We are not homeowners,” Rachel said. “We’ve done the calculations of what it would cost to buy a home in our area, even with a 50% down payment, we would get a greater (return on investment) on renting and investing what we would otherwise need to pay for the home.”

The couple has, in their opinion, an ideal rental situation (with their rent costing less than 8% of their combined income), which allows them to enjoy the flexibility to travel internationally, search for job opportunities, and pay close attention to their investments, rather than owning a home.

What else did you dream of doing while student loan debt held you back? Now might be the perfect time to plan that wedding, start a family or travel the world.

Just remember, take a moment to savor and celebrate before diving back in. Your financial goals will always be there waiting for you, and, best of all, after paying off so much debt, you now have more money to make your financial dreams come true.

Maya Dollarhide contributed to this report.

Interested in refinancing student loans?

Here are the top 6 lenders of 2021!
LenderVariable APREligible Degrees 
1.89% – 5.99%1Undergrad
& Graduate

Visit Splash

1.99% – 5.64%2Undergrad
& Graduate

Visit Earnest

1.99% – 6.84%3Undergrad
& Graduate

Visit CommonBond

1.91% – 5.25%4Undergrad
& Graduate

Visit Lendkey

2.25% – 6.53%5Undergrad
& Graduate

Visit SoFi

2.17% – 4.47%6Undergrad
& Graduate

Visit PenFed

Check out the testimonials and our in-depth reviews!
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 Feburary 1, 2021.

2 Important Disclosures for Earnest.

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: 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%. 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 October 26, 2020, 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 10/26/2020. 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, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 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.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

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 Jan 1, 2021 and may increase after consummation.

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via 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 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 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 02/17/2021 student loan refinancing rates range from 1.91% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.

5 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: 1. Fixed rates from 2.99% APR to 6.99% APR (with AutoPay). Variable rates from 2.25% APR to 6.53% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.12% plus 2.38% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. 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. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The discount will not reduce the monthly payment; instead, the interest savings are applied to the principal loan balance, which may help pay the loan down faster. 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.

6 Important Disclosures for PenFed.

PenFed Disclosures

Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.99%-5.15% APR and Variable Rates range from 2.17%-4.47% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. 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.