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Updated on Friday, January 15, 2016
Sheila Rodriguez is 29 and lives with her father — a fact that has been awkward at times. “It’s so embarrassing to be at family functions, and your cousins have houses, and here I am struggling,” says Rodriguez, who lives in New Rochelle, NY.
It was a necessary move when she went back to graduate school in 2009, because Rodriguez couldn’t afford rent on top of tuition payments. “It was so depressing that my dad came to my room and said, ‘Are you going through a breakup?’” Rodriguez remembers.
But as sad as she was to feel like she was moving backward, Rodriguez wound up using her situation to accomplish something great: She paid off $30,000 in student loans.
Loans on top of loans
When she graduated from college with a degree in Sociology, Rodriguez was earning a low salary as the manager at a movie theater and paying only the interest on her student loans. One day she realized that a coworker — who had been there for 12 years — was earning the same paycheck. “I thought, ‘What am I going to do?’” Rodriguez says. “This isn’t why I went to college.”
So she went back to graduate school to get a masters in communications, adding more debt to her student loan balance along the way. When she graduated, she had about $60,000 in student loans, split into two $30,000 balances, each with a 6.5% interest rate. “Based on the payment plan they had me on, I would be paying about $500 a month for the next 29 years,” she says. “With interest, I would end up paying a total of $120,000 by the time I was done.”
No luck in the job market
Unfortunately, Rodriguez continued to land low-paying jobs for the next few years, even enduring several months of unemployment. She continued paying only the interest on her student loans and putting as much money away as she could.
Then, at the end of 2014, she finally landed a better job doing digital marketing for a technology firm. She knew she could use her bigger paycheck to move out of her father’s house once and for all, but she had other ideas. “Instead, I made a payment plan to kill one of the loans,” she says. “I thought, ‘If I can just knock out one of those loans, I will save about $40,000 in interest.’”
She threw every spare penny at her loans, which were charging her $10 a day in interest. “I didn’t go on vacations,” she says. “I didn’t do anything. I would pay $20 on the loan every single day, and then on Fridays when I got my paycheck I would pay $200 or $400,” Rodriguez says. “I was dropping $1,500 to $2,000 a month on the one loan.”
By July, she’d saved up enough to pay the first loan off completely, which she did. “I clicked ‘Send’ to authorize the payment and I sat there and stared at the screen,” she says. “I couldn’t believe I actually set my mind to a goal and got it done. It was a great day.”
Making more plans
Although she’s paid off one big student loan, she still has the other $30,000 remaining — but she’s not stressed about it. “I’m not making myself a prisoner to that loan,” she says. “I really want to pay more than I should for the month, but now I have to budget for myself. I want an apartment, I want to travel and live, I don’t want to be tied down with these loans.”
For now, she expects to pay the second loan off — her payment is $200 a month — in 15 years. But she’s happy she had a support system that enabled her to ditch the first loan so quickly — and realizes that not everyone has the same goals that she does. “Just because I did it, it doesn’t mean it’s right for somebody else,” she says. “Some people like buying clothes every other day, some people have a kid or two, some people have pets. You have to assess your situation.”
The next goal on her bucket list? Save up for a place of her own again. “I’m 29 and I need an apartment,” she says. “I need to get out of my father’s basement.”