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Updated on Tuesday, April 26, 2016
When Heather Baggs graduated from Weber State University she still owed $14,000 in student loans. “That might not seem like much because I worked full-time through school and paid $200/month through the majority of my education,” she says,” but I also still owed over $12,000 on my car loan,” so debt obviously weighed heavily on her mind.
Baggs knew going into her education that she didn’t want to leave school in a ton of debt, so she worked full-time while earning her degree, which paid for a large portion of the fees for tuition. She also used a federal unsubsidized loan for the remaining amount she owed. “Interest was 6.8% on the unsubsidized loan and 3.4% on the subsidized one,” she recalls.
Despite working full-time throughout school and graduating with $14,000 in debt, Baggs kept up her determination to pay down her loans as quickly as possible. “I decided to attack my school loans and leave no survivors, so to speak,” she said. “I wanted them gone as soon as possible, so I figured out exactly what I needed monthly to get by — including fuel, food, etc. — and then sent the rest of my wages directly to my loan repayment.”
While Baggs was only required to pay $305 monthly on her loans, she ended up paying $300 from each pay period (or $600 monthly) instead. “It was nearly my whole income when I was making $8.50 an hour,” she said. “But as I got promoted and earned a raise, I had more income available so I upped my payments. Once I started making $600 payments each pay period, the amount started dropping rapidly, which helped me stay motivated.”
Baggs also helped cushion her income by cutting back on going out to lunch, expensive activities, shopping for clothes and makeup and basically spending on anything frivolous. “Also, I was living with my parents during this time so it helped remove the stress of rent, which I know is not possible for everyone, but is helpful if possible,” she said.
Baggs graduated in August of 2013 and paid her final debt payment (which was over $26,000, including her car loan), on March 27, 2015. “The trick is learning self-control and spending less on temporary things,” she said. “Packing a lunch every day instead of going out to eat with coworkers, not going to stores when you are feeling impulsive and don’t have a list of exactly what you need, and other sacrifices like that have made the biggest difference.”
In Baggs’ case, the small efforts added up quickly. For recent grads facing a similar student loan situation, she suggests admitting what your weaknesses are and facing them head on. Consolidation also helps, which she did with her car and student loans (check out this piece for the best debt consolidation personal loan options). “It makes it less stressful when you only have one payment to make, and if you do it right, the interest rates will be a ton lower,” she added.
Baggs estimates she saved about $2,375 by consolidating and making larger payments to pay her loans off more quickly than she would have otherwise (her original projected date of final payment was some time in 2018, more than five years after she graduated).
After her experience Baggs’ biggest piece of advice is to not wait to start paying off loans. “If you can send even $10/month to your lending company while you are in school, do it,” she suggests. “Work hard and do your best to have control over your money. If you don’t spend as much, there will be more available to send to your loan. The feeling of being debt free is amazing. It is like a huge weight has been lifted off your shoulders, so trust me … it’s worth it!”