If you owe $100,000 in student loans, you might feel worried you’ll never pay off your debt. Columbia University graduate Melody Wilding has been there, having graduated with a $100,000 loan debt for her degree in social work, a field not exactly known for its high pay.
But Wilding was motivated to get rid of her debt as fast as possible. Even though she had a low starting salary, she was able to pay off her student loans in just five years. Here’s how she accomplished this daunting task.
- Starting a career in social work
- Researching repayment options
- Accelerating debt repayment
- Becoming debt-free
Starting a career in social work
Social work is a challenging field, as those who work in it are tasked with helping people cope with issues in their lives and serving as advocates for those who need assistance. If you pursue this line of work, you can practice in schools, human services agencies or private practices.
The job can be rewarding, but the pay is relatively low. The median salary for social workers is just $50,470, according to the Bureau of Labor Statistics. That’s lower than the national average salary — $53,490 — for all occupations.
“Social work is historically known as one of the lowest-paying professions, but it’s filled with incredible, well-meaning people who just care deeply,” said Wilding.
To make matters worse, most social work positions require candidates to have a master’s degree. Going to graduate school can add thousands to what you owe and can cause you to have higher debt on a smaller salary than your peers.
That was certainly the case for Wilding. After undergraduate and graduate school, she owed over $100,000 in student loans. Thanks to interest charges, her balance quickly ballooned to $129,000. Her first job as a social worker paid just $24,000 — which made her payments impossible.
Researching repayment options
With her low salary, Wilding couldn’t afford her monthly payments under the 10-year standard repayment plan.
“At first, I was in a denial phase,” she said. “I signed up for an income-driven repayment plan for two years. My salary was so low I qualified for a $0 payment.”
Many social workers with student loans plan on pursuing Public Service Loan Forgiveness (PSLF) for their federal loans. With this approach, you can sign up for an income-driven repayment plan and make reduced payments.
After 10 years of making qualifying payments, the government will forgive your loans. Wilding considered this option, but she ultimately decided it wasn’t for her.
“Many think they will get PSLF, but it only works for some fields,” Wilding said. “I wanted freedom from my debt. I didn’t want this limiting my life decisions for years.”
With PSLF, your career path can be narrow. Since it requires that you work in a nonprofit or other qualifying organization for 10 years, it can mean limiting your earning potential for a decade.
And although income-driven repayment plans can give you breathing room in your budget, it can be tough to save for other goals — like buying a home or retirement — on a nonprofit salary. Wilding wanted to give herself more options.
“When I used the interest calculators and saw how much interest would accumulate, and how much I’d have to pay, it scared me,” Wilding said. “I became super motivated to pay off the debt as soon as possible.”
Accelerating debt repayment
Wilding switched her repayment plan back to a 10-year plan. Her payment was over $800 a month, but she was determined to make those payments every month to become debt-free.
To make it work on a small income, she took several different steps.
Moving in with her parents
Wilding worked in New York, but knew she couldn’t afford New York’s sky-high rental rates. The average cost to rent a one-bedroom apartment is $2,940, according to housing search engine Rent Jungle — that was more than Wilding’s whole paycheck.
Instead, she lived with her parents in their New Jersey home and commuted into the city. It took her over two hours each way, but it was worth it because of how much she saved.
According to Wilding, having the option to live with her family was a huge help. Indeed, it’s a luxury that might not be possible for everyone. However, if you can live with family or friends for free or at a reduced cost, it can help you get on your feet.
Boosting her income
In addition to cutting down her housing costs, Wilding also focused on boosting her income.
“I had multiple side hustles,” she said. “Social workers have so much opportunity for that. It’s widely acceptable to have per diem work.”
Social workers often take on per diem work, meaning they work for another agency or private practice in addition to their full-time job. Per diem workers supplement the organization’s usual staff, filling in when someone is ill or when they need additional help.
Wilding also leveraged her experience and education in other areas. She teaches social work at the City University of New York and began an executive coaching and supportive counseling business. She also became a professional speaker, using her social work experience to talk about issues like workplace wellness and emotional intelligence.
With all her side hustles, Wilding was able to pay even more than the $800 minimum payment each month.
Becoming debt-free
Wilding juggled her schedule of working full-time and managing several different side hustles to keep up with her payments and pay down her loans faster. Her hard work paid off, too. In just five years, she paid off her $100,000 in student loans in full.
“My career took a winding path, like many social workers now,” said Wilding. “But getting rid of my loans gives me so much more freedom and peace of mind. We mentally and psychologically need our finances to be in a secure space in order for us to feel in control of our lives.”
She encourages others in the field to explore all of their options, whether that includes refinancing student loans for better rates or increasing their income with a high-paying job.
“Social work is such a broad field,” said Wilding. “Look at the path others have taken. There are jobs in traditional social work with direct-service in hospitals or agencies, but I’ve known others who recognized their skills could be used in other areas. They’ve pursued careers in fields like human resources, which can be much more high-paying.”
But the biggest thing she recommends is confronting the truth about your debt and facing the real numbers.
“It’s easy to defer the decisions and avoid looking at the hard stuff,” she said. “As social workers, we help people through difficult decisions, but we often neglect our own needs and self-care.”
If you’re ready to take charge of your debt like Wilding, here’s how you can pay off your student loans even faster.
Rebecca Safier contributed to this article.
Interested in refinancing student loans?
Here are the top 9 lenders of 2021!| Lender | Variable APR | Eligible Degrees | |
|---|---|---|---|
 | 1.88% – 6.15%1 | Undergrad & Graduate | |
 | 1.88% – 5.64%2 | Undergrad & Graduate | |
 | 2.50% – 6.85%3 | Undergrad & Graduate | |
 | 1.89% – 5.90%4 | Undergrad & Graduate | |
 | 1.99% – 6.59%5 | Undergrad & Graduate | |
 | 1.88% – 5.64%6 | Undergrad & Graduate | |
 | 1.90% – 5.25%7 | Undergrad & Graduate | |
 | 2.39% – 6.01% | Undergrad & Graduate | |
 | 2.13% – 5.25%8 | Undergrad & Graduate | |
| Check out the testimonials and our in-depth reviews! 1 Important Disclosures for Splash Financial. Splash Financial DisclosuresTerms 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 June 1, 2021. 2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest. Earnest DisclosuresInterest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions. Auto Pay Discount Disclosure You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. Student Loan Refinancing Loan Cost Examples These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product. Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America. © 2021 Earnest LLC. All rights reserved. 3 Important Disclosures for CommonBond. CommonBond DisclosuresOffered 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 Laurel Road. Laurel Road DisclosuresAll 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. 5 Important Disclosures for SoFi. SoFi DisclosuresFixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 1.99% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 6 Important Disclosures for Navient. 7 Important Disclosures for LendKey. LendKey DisclosuresRefinancing 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 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay. 8 Important Disclosures for PenFed. PenFed DisclosuresAnnual 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 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% 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. |
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