Student Loan Hero Success Story: How Blake Paid off $380,000 in Student Loan Debt in Just 21 Months

student-loan-debt-success-story-blake

Here’s a story from SLH reader Dr. Blake Hillstead. Blake graduated from dental school with a tremendous amount of debt, which he recently finished paying off. Take it away, Blake!

Well, I finally did it. I paid off my $380,000 student debt load just 21 months after graduating.

Dr. Blake Hillstead

Dr. Blake Hillstead

A recently graduated orthodontist, I finished school in August 2013. I worked throughout undergraduate and dental school, and even moonlighted during my residency. Paying off my student loan debt this fast wasn’t easy, but it was definitely worth it. Here’s how I did it.

How I got into so much student loan debt

As you can imagine, becoming an orthodontist is expensive. My journey included taking out a ton of student loans.

So, how bad was it? Well, for a few years, I couldn’t bear to even sign in to look at my student loan balances. While my Stafford loans at 6.8% APR didn’t seem so bad, I also started to build a massive loan at the Grad PLUS level of 7.9%.

I tried to make interest payments whenever we could save up some extra money—just a few thousand here and there to minimize the compounding nature of interest. But when I graduated, I was shocked to see that my loans had reached a staggering figure of $380,000. The weighted average interest rate on my loans was 7.1%.

I felt overloaded and stressed by having to now repay this debt and interest, and at the same time, trying to support a family and raise young children.

Creating my payoff plan

My wife and I had many conversations about how we would pay off our student loans. We discussed whether we should pay them down aggressively or opt for the slow and steady approach so that we could immediately upgrade our lifestyle and spending habits.

We decided that we’d save a lot of money and stress if we could just pay my student loans off quickly, even if it meant making some short-term lifestyle sacrifices.

For starters, I realized that the annual interest alone would cost me about $26,000! With this in mind, my first goal became clear: refinance my student loans to save money on interest.

I used a few different options to accomplish this—

  1. Graduate loan refinancing program. I refinanced $55,000 in loans down from 6.8% interest rate. This was a 7-year term with a variable interest rate tied to the LIBOR. While I thought that choosing a variable rate loan might be risky, I figured the economy was still going to be slow for awhile, so I took the risk.
  2. I took out a home equity line on our house. This was a little gutsy—and in retrospect probably a little too aggressive. But I was able to completely get rid of my 7.9% APR loans and change them to a 3.75% fixed rate! The fixed rate was nice here since it balanced out some of the risk of my student loan portfolio.
  3. I refinanced through a private student loan lender. Through one of Student Loan Hero’s refinancing partners, I refinanced the remainder of my loans. This reduced my interest rates from 6.8% to 2.74% variable.

With these three refinancing options, I was able to reduce the annual interest paid by about 70%. Now my hard-earned money would go even farther as more of it started getting applied to the principal than to the interest.

Paying off my loans—as fast as possible

After refinancing my student loans, the second part of my strategy kicked in—work as hard as possible and earn as much as I could to pay off my student loans.

I not only bought a private orthodontic practice but also continued to work as an associate at other orthodontic offices to supplement my income. I worked long hours and Saturdays, and for six months, I even worked at a job where my shifts were 11 hours long with no scheduled lunch breaks!

To have more money to pay off student loans, I kept my expenses down as much as possible. Some of the best advice my brother and a close friend gave me when I graduated residency was not to make ANY big purchases in the first year after I graduated. Given that my income was about to increase dramatically compared to my student days, I knew this was going to be a challenge.

My brother told me not to buy a bigger house or a new car. Instead, he advised me to save money, pay off loans, and not get in over my head with other big expenses.

With this advice in mind, we moved out of the “starter home” we had purchased a few years ago and found tenants to move in. We decided to rent a smaller house that was comfortable yet inexpensive when we relocated after I graduated.

To keep other expenses down, we kept our old cars, didn’t do anything extravagant, and paid off a good little chunk of our student loans. It was a sacrifice.

In addition, I kept on reading and thinking about how to pay off my debt. Student Loan Hero’s blog posts helped me strategize and stay focused. It was a great resource for me and got me on track to pay off my loans and save TONS in interest.

In addition, reading student loan payoff success stories on the Student Loan Hero blog helped me stay motivated along the way, too.

As I started paying down my loans, it was like a snowball gaining size and momentum—once I got a taste of that feeling of satisfaction, it got easier and easier to commit more money to getting them paid off.

My final student loan payments

All the struggle and effort paid off. Pretty soon I had cut my loans down substantially! When I had only $150,000 left in student loans, I felt the burden had lifted. My loans were now much more manageable than the massive $380,000 balance I started out with. I kept at it, knowing that the end was within reach.

In May I celebrated my 31st birthday, and I had saved up quite a bit of money. For a birthday present to myself, I sent a check in the amount of roughly $120,000 to my last student loan servicer. I just received the letter saying my check had cleared. Now I can proudly say I am free from my student loans!

Lessons learned – how you can pay off your loans too

We traveled a hard and disciplined road to get where we are now—in a tremendously powerful financial situation.

I would recommend that student loan borrowers try their best to pay their student loans down early. It reduced the stress in my life and has made me feel so much better about my professional career decisions. It’s also opened the door for me to start saving now for my children’s college educations, our retirement, and other financial goals.

No matter what amount of debt you have (or what your income is), I believe the principles for paying off student loans remain the same:

  1. Figure out how to pay off student loans as efficiently as possible. In my case, refinancing my loans helped me save a ton of money, which I could then put toward loan principal instead.
  2. Work REALLY hard. Earn as much as possible and pay it toward your student loans. Although I worked incredibly hard, I knew I only had to do it for a short time until my student loans were paid off. In my opinion, making sacrifices early in your career to pay off student loans is a smart decision.

My education has been the best investment of my life. And after my choice of career, my next best decision was to pay off my loans fast and free up the rest of my life from having to worry about payments every month!

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderRates (APR)Eligible Degrees 
Check out the testimonials and our in-depth reviews!
2.75% - 7.24%Undergrad
& Graduate
Visit SoFi
2.57% - 6.39%Undergrad
& Graduate
Visit Earnest
2.57% - 7.12%Undergrad
& Graduate
Visit CommonBond
2.99% - 6.99%Undergrad
& Graduate
Visit Laurel Road
2.58% - 7.26%Undergrad
& Graduate
Visit Lendkey
2.89% - 8.33%Undergrad
& Graduate
Visit Citizens
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

Published in Budgeting, Debt, Income, Making Money, Pay Off Student Loans, Private Student Loan Refinancing, Success Stories

  • I would never take the risks that you took. I do agree on paying off student loans as quickly as possible, but do not assume income is not at risk. It’s 2 weeks ago today that I was prepared to refinance my student loan from federal fixed rate to private variable rate and also sacrifice my emergency fund to speed up the student loan payoff process. I procrastinated and the next day half my office got their job termination notices.

    I working hard on getting another job , and I’m very glad that I didn’t get a variable rate loan of use my emergency fund to speed up paying off student loans. If I had, I would be in very bad shape today.

  • Kristin

    First congratulations! What a great accomplishment.

    But.. Wait. “I took out a home equity on our house.” … “so we rented a comfortable (but inexpensive) house”

    Which one was it?

    Also, I think it was a brother who said “don’t buy a house or a new car or business” and you bought a business.

    Please explain how you counted your pennies while owning a home and a business. You also I’m sure had employees.

  • Rebecca Ann

    I wish I could do this to pay off my law school loans, but I’m only making enough to cover my expenses (rent, car payment, insurance, and a few other essential bills) and pay for gas and groceries. I’m sure Blake worked very hard (as evidenced by the long hours and extra side job), but I’m willing to bet he was making a whole lot more, too.

    So while his advice is good, it’s also not very realistic for most people, unfortunately.

  • Hi Kristin,

    Thanks for your comment, and I apologize for the confusion. We made some mistakes and omitted some details in the original post that would have clarified this.

    The post has been revised to indicate that Blake previously owned a home, on which he took out home equity. He later moved out of this house and renting it out to tenants while relocating to a new house, which he rented.

    In regards to the advice, that was primarily focused on the Blake’s first year after graduation. He would later buy a practice, just not right away. I have made edits to eliminate confusion in this section as well.

    I hope this clears things up. If you have any other questions, please let us know.

    Thanks,

    Jeffrey
    Student Loan Hero

    • TimeForChange

      I appreciate these clarifications. It’s a little different when one has already gotten sufficiently established to buy a home and take out an equity loan to refinance the loans vs. someone straight out of grad school with no assets or family/spouse support. Plenty of people with whom I graduated law school could not find work right away despite coming from a top ten school. For me, the loan burden has forced me to continually take jobs which have caused stress related illness and I’m now on disability trying to recover. I also worked hard, but had different circumstances and stamina levels/health considerations. Each individual is a unique case. Blake certainly did a great job and was very smart and disciplined, but I don’t see him as a good example to which most of us can aspire. I do appreciate his advice and his success and certainly celebrate for him. I also agree with the prior comments. This is a heavy burden for so many of us, and there is a general lack of understanding as to the weight carried by young graduates, not yet experienced as financially independent and starting out with $100-$200k+ in debt fresh out of the gate. This lack of understanding leads to unfair judgment on top of the core stress of financial strain that can last for perhaps an entire career. So there is good reason why we would like to see stories presenting a more realistic and common picture.

      • Hi,

        Sorry to hear you’re having a hard time. I know student loans are a heavy burden for you and millions of other Americans.

        We understand Blake’s story isn’t relatable for everyone. Here’s another student loan success story that about a more “normal” situation: http://studentloanhero.com/featured/how-to-pay-off-student-loans-68000-5-years/

        Best of luck with your student loans. Let us know if there’s anything else we can do to help.

        Cheers,

        Jeffrey
        Student Loan Hero

  • Hi Rebecca,

    Thanks for your comment. And you’re right, Blake’s story is exceptional. We didn’t mean to imply that everyone can or should do exactly as Blake did. I’m sorry if this post came across this way.

    With this in mind, Blake included the final two points about having a plan to pay off student loans and working extra hard to get this done. These points could potentially apply to anyone, even if s/he doesn’t have the same earning potential as he does.

    I hope this helps clear things up. Let me know if you have any other comments or questions.

    Best,

    Jeffrey
    Student Loan Hero

  • Truth Teller

    Most of the people in student loan debt are still in debt because they’re struggling to find jobs or their jobs aren’t paying as much to stay afloat.

    So Kudos to him, but please post something more applicable and realistic for the people who come on your site.

    • Thanks for sharing your opinion. We totally agree, and we’re hoping to feature more stories in the future from borrowers with all sorts of backgrounds.

      In the meantime, have you checked out our weekly email series? We feature student loan debt stories from around the web almost weekly on there. You can sign up using the form right above the comments section.

  • Edster

    Ok while I commend this man for paying his loans, I myself had 112,000 student loans I paid off in 34 months. There is two differences here that 99.999999999% of the people won’t have. Notice this man had already setup a home, took out a equity loan which is money his house either went up in value or money he already paid into his house. Second he had enough money just lying around to buy his own Dentistry. Again two things factor into paying off HUGE student loans. Help from others, HIGH paying jobs and money spent that was spent frivolously before and now your selling stuff….Another lady paid off 150k I think in student loans, she sold her BMWs, and misc jewelry and stuff and then only had to actually pay back like 30k and she did it in a few years like it was a huge accomplishment.

  • Hi Edster,

    You’re totally right. Trying to follow the exact same path Blake did won’t work for everyone or even most people.

    However, we thought his story was a remarkable one to share. We also have several other success stories from others who don’t have as high income or debt as Blake did. You can find them here: https://studentloanhero.com/success-stories/

    If there’s anything else I can do, let me know.

    Best,

    Jeffrey

  • Emily Caskey Peppers

    Jeffrey: I’m obviously late to the comment section here but I wanted to say thanks. Commenters have pointed out that Blake’s situation when he got out of school is unique among the general population, which is true. However, it is not unique among doctors, and the numbers he disclosed for his student debt are average or below average for dental specialists. Unfortunately, many doctors allow lifestyle inflation to coincide with income inflation – while not taking their loans seriously – and end up trapped by their debt just the same as those with modest incomes. I talk to doctors and other healthcare professionals quite a bit about loans. I have colleagues who can’t make their full student loan payments each month because they refuse to get control of their spending. I wish stories like Blake’s were more common and more widely shared. Thanks again!

  • Emily Caskey Peppers

    Jeffrey: I’m obviously late to the comment section here but I wanted to say thanks. Commenters have pointed out that Blake’s situation when he got out of school is unique among the general population, which is true. However, it is not unique among doctors, and the numbers he disclosed for his student debt are average or below average for dental specialists. Unfortunately, many doctors allow lifestyle inflation to coincide with income inflation – while not taking their loans seriously – and end up trapped by their debt just the same as those with modest incomes. I talk to doctors and other healthcare professionals quite a bit about loans. I have colleagues who can’t make their full student loan payments each month because they refuse to get control of their spending. I wish stories like Blake’s were more common and more widely shared. Thanks again!

  • Alexus Lee

    This sounds like a “let them eat cake” kind of story. Super unrealistic story.
    Author presents the $380,000 in student loans causing stress……. just pay off with a line of equity from the house! (What if you have no house?) Then buy a business! (What if you have no money to purchase a business?)
    Never fear……. just write a $120,000 check which had been lying around not working from the ‘ol the bank account. Easy peasy! Few people just getting out of school have that chunk of money lying around. He certainly didn’t save $120k through the years to pay that, it was instant money from somewhere. Because it would be better to pay it as you get the money to reduce interest, rather than trying to save $120k and then paying it off at the end.