My Student Loan Payoff Plan- Journey From 100k To Financial Freedom Update 1

Welcome to the first article on my student loan payoff plan! I’ll be posting an update every month on how I personally am paying off my debt. My goal is to pay off my student loans fast and hopefully over the course of this journey, I can give you tips as well.

There’s quite a difference between knowing how much your school’s tuitions gonna cost and it actually appearing in your balance in your student loan managing account. If the first time you are going to look at your student loan balance is after you graduate, you are going to be in for a real big surprise. You should be preparing how to pay off student loan debt even before you start school.

Think about it like this: does it make sense to purchase a $100,000 home without knowing how you’re going to pay for it? No, of course not.

So then why is it okay to pay thousands for tuition without having a tangible income stream coming in yet?

I knew how much physical therapy school was going to cost even before I went in- but knowing the problem without actually taking any action against it wasn’t gonna cut it. Knowing is step one, but actually taking an action to help solve the problem is a whole other leap.

I had no knowledge of any student loan payoff strategies. I’m currently in my third and final year of school and every trimester, I’ve always been checking my student loan balance. Every trimester it was always about 11-13 thousand dollars more than it was previously.

Here was my reality check:

I had actually made a $5,100 loan payment last week, so its balance was at $99,709- close enough to $100k, right? And don’t even get me started with that average interest rate percentage..
About two months ago was when my mindset really started turning towards the problem of “How am I going to pay off all this student loan debt?”
My friends who were from out of state probably had even more debt than me- how were they going to pay off all that school debt as well?

Since I’ve been in high school, I’ve been working ways to make money online. I needed a loud wake up call to finally push me towards paying off my student loans, and nearing that 100k mark finally did it for me.

Now before I go over my plan on how I plan on paying off my debt, it’s important to note that actually accessing my loans was quite a bit tedious. It’s not necessarily an account I was logged onto everyday, and every new term, I would have to click “Forgot Password.” If you need help figuring out how to access your loans, I recommend seeing your financial aide office at school- the individuals there helped me out a ton on how I could access my loans.

Now onwards with the plan:

Step 1: Become Financially Literate

I learned financial terms related to student loans. I learned how interest works, what compounding interest was, and what principle balance meant. Sad to say, even as a medical school student- you would think someone would teach me these terms in school, but nope- I was complete financially illiterate, and becoming financially literate was step one.

From what I learned in simplistic terms, the amount of money that I owed to the government was increasing daily- which was what blew my mind. Everyday that passed, the amount I owed back was increasing unless I made a payment to decrease it.

Previously, I had thought that interest only started to accumulate after I got out of school- but I was totally wrong. From just being in school, I had accumulated over $3,000+ extra in interest.

Even with knowing all these terms related to my loans, there was still so much more financial learning to be done. Finance is important. It’s definitely one of the five classes I recommend that every college student take.

If I could sum up the few important things to know, it would be:

  • For some loans, interest accumulates even while you’re in school.
  • Compound interest is interest that builds upon the principal balance plus the interest accumulated on top.
  • Making payments early on your student loans will definitely save you money in the future.

Step 2: Make a Student Loan Payoff Spreadsheet

With the help of my brother who was able to pay back his nursing school loans in 2 years, he helped me organize in what order I should pay my loans. It was overwhelming at first, but organizing and setting targets for your loans made it easier.

Yup. Those are all my crazy loan amounts, but I’m determined to make them all zero.
As you can see the organization was mainly based off of paying the loans with the highest interest rate first. We were able to calculate how much each loan was generating in terms of monthly interest as well, and with all the loans combined, we were able to calculate a monthly interest as well.
If you’d like a copy of this email spreadsheet to input your own loans, just enter your email below. In addition, you’ll also get the latest updates on this journey.


Step 3: Set My Goals

It’s one thing to say that I’m gonna pay off my student loans and make them all zeroes, but it’s the difference of a house if I plan on doing that in 40 years versus 4 years. Play around with this student loan calculator here. It’s not an exact representation but it does give you the general idea of how much a difference it is to be paying off a loan in 40, 10, or 4 years.

I set my goal to pay off my student loans in 4 years which would require a $2,400 or more payment per month. That would be over $15,000 interest paid. Now compare this to choosing to pay off my loans over the next 40 years- I would be paying over $170,000 in interest. Huge difference, but either way, the interest will remain in the thousands roughly.

Another goal I have is to make more money- well of course right? But here’s the thing: I see two ways to pay off my student loans. I can either

1) Become more frugal and limit my life’s expenses and leisure activities or

2) Make more money.

Between these two I would definitely choose to find ways to make more money. The online world has an endless amount of ways to generate income. There will definitely be more savings actions involved but just don’t think that throughout my upcoming 4 year journey I won’t be traveling to exotic places or going out to eat.

Step 4: Assess My Income

Right now, my income streams vary from a variety of a few different places. As said before, I’ve been working online to make money since I was in high school. For a brief overview, here are my income streams:

  • Fiverr
  • CorrCommercials
  • Videography Gigs
  • Print on Demand
  • Misc.

Accumulated, they make roughly about $3,000 per month, which isn’t too bad especially since I’m still a full time physical therapy student.

Right now, my most valuable move in helping me with me income is the fact that I still live with my parents. Hey, but free rent right? It’s one of the most logical decisions you can make to save money especially if you’re trying to repay your debt.

Of course there’s a lot more to this than just assessing my income- there’s forming the mindset, misc. expenses involved, and taxes- but this was just to give you a gist of how much I am going to be left with after I make my payments.

At this point, it may seem completely unrealistic to be able to live off definitely less than $700 leftover a month after paying off my loans- but I’m going to take advantage of the fact that I live with my parents and try my best to increase my income generation over the next 4 years.

Step 5: Execution

If you’ve read my about me page, you would remember that my favorite quote of all time is “Ideas are worthless without execution.” If you have the idea to pay off your student loans, it’s worthless until you actually make that loan payment.

Last week was the first week I was able to make my first loan payment. It felt great to finally take action despite the very large principal amount still left over.

I used my loan repayment spreadsheet to calculate that I reduced my total monthly interest by $30. 

If you’re interested in seeing how I make money on each of income streams, see the links below which are soon to come.

But until then, that’ll do for now! To sum up what’s left:

Debt: $99,709

Repayment: $5,100

Debt Remaining: $94,609

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