Jessica Elberfeld dreamed of breaking into the music scene and launching her career as a country music star. But after graduating from school with $113,000 in student loans, she had to reevaluate her goals.
She made big changes in her life and made difficult sacrifices, but is now debt-free.
Below, find out how Jessica tackled her debt and how she made peace with her decision.
Pursuing a dream
Jessica always wanted to be a country singer. She even moved to Nashville to be part of the city’s vibrant music scene and build her career.
She attended Belmont University, majoring in music business and taking out $68,459 in student loans, including federal and private loans. She interned for an artist management firm while still in school, and they hired her after graduation.
“I was a contractor and paid hourly. And because I wasn’t salaried, I also didn’t get benefits. That’s common in the music industry,” says Jessica.
Even though it was thrilling that she landed a role in her chosen field right after school, the job paid just $30,000. The salary meant her budget was tight for her loan payments.
Because of high interest rates, her loan balance ballooned. Over the length of her repayment period, she paid back over $113,000.
Reevaluating her life
Jessica still intended to pursue her dream, but the idea of making large monthly student loan payments for years scared her.
“I knew I had to be aggressive,” says Jessica. “But I couldn’t stomach paying over $1,000 a month for years.”
She took a hard look at her finances and goals. She knew she had to increase her income, but the money just wasn’t there in the music industry.
“If I wanted to get rid of the debt, I realized I needed to do something different,” says Jessica. “It was difficult, but I had moved to Nashville to become a singer. While I was working in music, I wasn’t doing what I really wanted anyway.”
She reevaluated her situation and ultimately decided to leave the industry. “I was working around the clock to further someone else’s career. So I quit my job with the firm and worked part-time at a restaurant while I looked to break into corporate America.”
Eventually, she found a job as a sales representative with a technology company. While she found the transition difficult at first, the change proved to be worth it. And now, she works for an apparel manufacturing company.
“The atmosphere is very different; it’s much more stern. But I work on commission and average about $55,000 a year,” says Jessica.
She also kept her part-time job at the restaurant so she could throw more money at her loans. With her increased income, she had more room in her budget for her loans.
Paying off her loans
Between her new job and her side gig, Jessica was able to accelerate her repayment. When she first graduated and had a lower-paying salary, Jessica struggled to keep up with the minimum payments of about $500. But with her new job, she was able to put over $2,000 a month towards her loans.
Through her hard work and sacrifice, Jessica was able to pay off her loans in seven years instead of 20. And because she had a high interest rate on some of the loans — as high as 10.75% — she saved thousands of dollars by paying them down ahead of schedule.
Now that she’s paid off her loans, Jessica looks forward to the future — she plans to quit her server job and go back to just one full-time position.
With the money she used to put towards her loans, she’s now saving up an emergency fund. She also started contributing about $450 a month to a Roth IRA to boost her retirement nest egg.
Making tough choices
Jessica acknowledges that giving up on a dream is a hard choice for anyone to make.
“It all comes down to priorities. For me, I didn’t want to have to move back with my parents to make ends meet. I can still be involved in the music industry, just in a different capacity. It’s a tradeoff,” she says.
Jessica follows the industry closely and stays in contact with professionals she met during her time at the artist management firm. Though her decision was a necessity because of her debt, she says she doesn’t regret her choice.
“For people who want to break into a competitive industry like music or fashion, you need help to survive. Many need help from their family because the gigs are so low-paying. If you want to make it on your own, you may need a second job or another roommate. Otherwise, you may do what I did and leave to pursue a higher-paying field,” says Jessica.
For more information about accelerating your debt repayment like Jessica, check out this ultimate guide to paying off your student loans faster.
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 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% 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 firstname.lastname@example.org, 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|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|