If you’re reading this, you might be exactly where I was about five years ago – a little (or a lot desperate), scared, incredibly annoyed, and regularly wondering why you didn’t just get an MBA instead pursuing the heroic career that is social work. If that’s who you are, please rest assured that I sympathize completely with your situation and I want to help you out of it! If you’re just here because I have a good story to tell…well, that’s a fine reason, too.
So five years ago, much like you might be, I found myself in a pickle. I’d gone to graduate school (twice) and had left with a stellar education and a few dollars in debt, which I assumed would be taken care of by Public Service Loan Forgiveness (which I have A LOT to say about, and I will, in future posts) over the span of a ten-year career at a fabulous organization that would take excellent care of me and meet all my needs.
And, sure. I’m sure this happens to some people. But that’s not what happened to me.
What happened to me was something else. I kept paying my PSLF payments, on time, every month, and things kept going wrong. A payment would be received “late” (guys, I promise you, I am so Type A that “late” is not even a possibility in my life) and not count toward the total number of months. Or, I would switch something in my payment plan only to find that it meant that my interest would be capitalized (ie added to my loan balance) at the end of the year (to the tune of- no lie- $9000). All of this, plus it was becoming abundantly clear that I did not want to, and probably wouldn’t be able to, sustain working at my workplace for the required ten years. I also doubted very much that I wanted to find some other comparable place to go start over just to remain on PSLF, which I trusted zero percent would actually forgive my loan balance after the ten years were up.
This all amounted to A) I would need to find a new job where B) I earned considerably more so that I could have a shovel big enough to C) Dig myself out, one dollar at a time, of the colossal hole I had dug for myself.
When I realized the only way out was through, I became obsessed with the idea of paying off the debt as quickly as possible. Why? A billion reasons, but here’s my top five playlist:
- THE BALANCE KEPT GOING UP. Interest accrual on a $121,000 loan with a 6.25% interest rate meant that, despite making minimum payments, my balance was GROWING, rather than receding, every month. There is nothing more guaranteed to spiral a person into perpetual anger than throwing hundreds of dollars at a loan only to see the balance go up.
- I WAS SCARED AND ANXIOUS. ALL THE TIME. When you have that kind of debt, it feels like a literal chain around your neck. I thought about money all of the time. I worried about my payments all of the time. And when I projected out ten years to having nothing saved, little retirement, and a loan balance that may or may not being forgiven, I about lost it.
- I WAS PHYSICALLY ILL. All the stress of having that debt on my back contributed to significant physical issues that became debilitating and difficult to manage. Not surprisingly, it doesn’t feel awesome to be sick all the time, and because our healthcare system is what it is, it takes resources (like MONEY, which I didn’t have) to figure out what’s wrong with you and attend to it.
- I FELT LIKE MY CAREER WAS FROZEN. I’ve been a Master’s level clinician since 2004, so it isn’t surprising that I sometimes had some ideas about going out on my own initiating a private practice or program (both of which I get to do now!), but couldn’t while working at the nonprofit that I was beholden to per PSLF. In order to gain that freedom and pursue more independent work, I had to let go of PSLF, and face that debt head-on.
- I WAS TIRED OF HAVING NO MONEY. I wanted to go out to dinner with my friends more than once a month (which is the single luxury I allowed myself from 24 years old on) without running out of money. I wanted to feel confident that I could pay for a plumber if a pipe burst. I wanted to imagine that a vacation might be possible without putting it on credit.
I can tell you that deciding to repay that debt, and coming up with plan in order to do it, felt scary and overwhelming. It was also incredibly freeing and calming, because I finally felt like I had a way forward out of the mess. And once I saw that the process was working, and the balance was falling, I added our other debts to the pile, too, resolving to get out of debt entirely so we could be financially free.
And…we paid off everything (except our mortgage) this past April, meaning that we killed $151,000 in debt in four years and one month.
Do you relate to this story? Are you somewhere in the beginning of this process, trying to find your way through? If so, I want to help, and I want to hear from you! Email me your story at firstname.lastname@example.org, and subscribe to the newsletter there so you get regular updates on the how’s and why’s of student loan debt repayment!
Take good care,