The Definitive Guide to Student Loans

How one couple is trying to pay off $600,000 in student loan debt in 5 years

Amber and Danny Masters thought they would never pay off their debt. After grad school, the couple's student loan burden came to $600,000 — more than 27 times the average for college graduates in their 20s.

But now, Amber, a licensed attorney, and Danny, a practicing dentist, are focused on paying off the debt, and quickly. They aim to have the total eliminated in five years.

How they got into the red

Amber and Danny finished undergrad at Brigham Young University with virtually no debt at all. "We were lucky to receive scholarships, Pell Grants and the help of some family members," Danny tells CNBC Make It.

Then, the two decided to further their education. After receiving her bachelor's degree in sociology, Amber went back to BYU for law school. Danny, who earned his bachelor's in business, attended Barry University for a master's in biomedical science and Roseman University for dental school.

"Danny's master's [degree] cost about $60,000. Then each year of dental school cost about $55,000," Amber says. "Dental school is four years. Without interest, that put his debt around $280,000."

For Amber, law school was just under $50,000. However, interest started accruing immediately, with rates as high as 7.9 percent.

The Masters family likes to take long walks in the park.
The Masters family likes to take long walks in the park.

Overcoming denial to get started 

At first, they "thought the debt would magically go away," Danny admits. "We just assumed that we would both have high earning potential after we graduated and that it would all work out. We never looked realistically at our debt until the end."

Then they became parents.

"Our beautiful son was born my third year of law school. Having a child is not the cheapest thing I have ever done, but it is the most incredible," Amber writes on Red Two Green, the couple's student loan advice blog. "[Our son's] birth was the start of us looking more seriously at our finances, and starting to make a plan for how we were going to manage [them]."

Most people told Amber and Danny to pay the debt gradually with an income-driven repayment plan, or not at all. "We scoured the internet, talked with colleagues, financial advisers, our school's financial aid offices, anyone at all who was willing to talk to us," the couple writes. "But in the end, most people agreed that there was basically no way on earth we would ever be able to pay off our debt on our own."

The couple knew that not paying the debt wasn't an option, either.

Amber Masters pregnant with her son, "M."
Amber Masters pregnant with her son, "M."

Getting back to black

Amber and Danny started thinking of ways to increase their income while they were still in school. "We resolved that if we could live within a modest budget and commit to working hard and smart, we could make enough money to pay it off quickly," they write.

Amber worked full-time as an attorney while Danny finished his last year of dental school. The couple also took on odd jobs. They sold $5,000 worth of miscellaneous items they had gathered throughout college. They took online surveys for pay and part-time jobs. They took photos for people to bring in extra cash. And they started collecting coupons.

They are also starting two business to earn additional income. The first is a 90-day fitness and financial program meant to get people in shape, physically and financially. The other is an undisclosed idea they say they are "really excited about."

The couple paid off Amber's law school loans only 18 months after she graduated, so they're well on their way to paying off the balance in five years.

Amber Masters smiles with son, "M," after completing her graduation ceremony.
Amber Masters smiles with son, "M," after completing her graduation ceremony.

"Take the bull by the horns"

Their advice to those in debt: Take charge. Create a budget.

"Neither of us are over-spenders," Danny says, "so we never felt compelled to make a budget in school … but we also weren't thinking ahead about paying off our student loans. If we had a budget in school, we would be able to pay off our loans even faster."

He said there are many pros to budgeting. "First, it teaches you self-discipline. You do your best to try to not overspend in each category of your budget. Then, you can accurately predict where your finances will be in the future.

Now, Amber says, she and Danny will occasionally sit down "with a calculator and Excel sheet and crunch numbers" in order to determine the income they need to pay their loans off in a reasonable time-frame for them.

Thanks to budgets, says Danny, "you don't waste your money and can put [it] to better use, such as paying off debt, saving for a home or [for] travel."

Nearly 44 million Americans owe more than $1.4 trillion in federal student loans and more than 4.2 million borrowers defaulted in 2016. Given that these issues are nearly universal, Amber and Danny hope to teach others the lessons they learned through their own experience and to "raise awareness about the student loan debt crisis."

They say that, when it comes to debt, you should "take the bull by the horns."

"It is tempting to bury your head in the sand and ignore the weight of your debt," Danny says, "but you really have to lean into your situation to get a handle on it. The earlier you come to understand and manage it, the less painful and more manageable it will be in the end."

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