In this series, NerdWallet talks to people who've paid off their student loans, breaking down how they did it and what they learned.
Amanda Page is student-loan-free, but it was far from an easy road. She earned a master of fine arts degree from the University of Alabama and left there in 2004 with $48,500 in federal student loans from her graduate and undergraduate studies.
Before defending her thesis, she consolidated her loans and signed up for the Department of Education's graduated repayment plan, which lowered her initial payment amount.
Ten years later, after deferring her loans for a time, she realized that she'd paid off less than $1,000 of her total balance. She decided to get serious about her debt. She started a blog called Dream Beyond Debt to keep herself accountable to her goal. After 14 months of hard work, she was free of her loans.
Page, now an assistant professor teaching English and humanities at Mount Carmel College of Nursing in Columbus, Ohio, still maintains the blog as she tackles new financial goals. Here's her student loan story:
What steps did you take to pay off your loans?
The first thing I did was call my lender and have them explain the payments to me. I couldn't understand why some months more money went to interest than principal. … So I decided on my strategy of making "monster payments." I started taking on a lot of extra work: temporary office jobs when my schedule allowed, extra courses to teach, focus group participation, freelance writing gigs and selling some stuff on Craigslist.
I made my first monster payment of $4,300, which I accumulated through extra work. After that, I was hooked. I didn't always know how I would put together a monster payment, and I never knew how much I'd actually have to make one, but I trusted the experiment.
Did you make other lifestyle changes?
I also got in the habit of always carrying my own coffee and water to work, as well as a bag of cheese crackers so I wouldn't be tempted to buy snacks at the cafe or gas station. I started inviting friends to go on hikes instead of meeting for coffee or meals. I also read personal finance blogs daily to stay motivated and worked on my money mindset.
Would you change anything about your approach?
The only thing I can think of is the lack of savings I ended the year with. I would have worked harder to put more money into my retirement accounts. I feel woefully behind on my retirement savings, and I was so focused on eliminating the debt that I didn't think much about that particular piece of the personal finance picture.
How has your life changed since paying off your debt?
The process of paying off the debt helped me evaluate what was really important to me. My dreams are defined. I know what I value, and I know my values. … Once I paid it off, I felt a weight removed. Student loan debt keeps you tied to your past. I'm so grateful it's gone and I can focus on my present and future.
What advice would you give to other borrowers?
I would recommend seriously looking at the story you tell yourself about your debt. For a long time, I resented my undergraduate debt and felt like it wasn't mine to pay. Once I reframed the story, took responsibility for my role in accumulating it and told myself that I was capable of eliminating it, then my life opened up. … [To pay off student loans quickly,] you have to earn more and reduce expenses — doing only one won't move the dial.
While "monster payments" may not be in the cards for every borrower, you can use other strategies to manage your debt and pay off your loans.
If you're having trouble making payments on your federal loans, income-driven repayment plans can help you get your debt under control. These cap your payments at a percentage of your income and extend your loan term to 20 or 25 years. You have to reapply every year to stay on your plan, and at the end of your loan term, any leftover balance is forgiven and taxed as income.
If you're a teacher, like Page, or you work in another area of public service, look into federal forgiveness programs. Those help qualified borrowers get forgiveness faster.
If you can afford your payments but you want to save money on your loans, student loan refinancing may be the answer. Refinancing lets you swap out your existing loans for a new one with terms based on your current finances. The lower you can get your interest rate, and the shorter your loan term, the more money you stand to save.
Most lenders look for a steady income, a low debt-to-income ratio and a credit score of 650 or higher. However, refinancing federal loans means giving up borrower protections like income-driven repayment and forgiveness programs, so you may want to exclude those loans from your application.