Finally paid off my student loans!
I finally did it!!
After 3 years since taking out the first of my student loans for grad school, I finally paid everything off.
I originally took out a total of around $67,000 in principal and, thanks to my status of being an international student, had horrendous amounts of interest accumulate daily with my variable interest rates (with the highest at around 12-13%).
Coming from a country where student loans are not as institutionalized in the same way as the U.S., this was my first experience having student loans and didn't fully understand what I was getting into, in terms of how much stress and worry these loans would have on me. Would I get a job that paid more than my loans? Would the interest rate keep climbing? What happens if I don't get a job / my visa expires / I need to pay in pesos? All of these (negatively) motivated me hard to find a good job right after graduation that was secure and paid well enough.
Here are the top 5 things that really helped me pay off my student loans as fast as I could:
#1. Chose grad school that gave me substantial scholarship + underspent during grad school
As an international student, the sticker price of the school was a very high consideration for me. I forfeited admission to other schools I liked better for a school that was good enough and gave me a merit scholarship that covered 97% of my tuition.
Since I didn't have enough personal savings to afford even the 3%, I had to take out international student loans. The loan amount I had to take out was dictated by the school I went to. Of course, tuition was fixed, but the university international student office had estimates for living expenses in the area and school supplies like books that I would have to purchase.
However, I tend to be pretty frugal and was definitely pretty frugal in grad school. While I took some trips with friends from my cohort and did go out for dinner / clubbing occasionally, I didn't make them a weekly thing and definitely skipped some trips I would have liked to go on. I only bought 1 book for school (online quizzes tied to the book manufacturer, anyone?) and instead borrowed copies from the library or from alumni. Instead of buying my grad gown new, I just bought one for $20 from another grad student who was moving out of state.
As a result, I didn't spend all the loan money and immediately repaid the excess after graduation.
#2. Roommates!
I was lucky that my SO and I were living in the same city where I went to grad school. Living with him allowed us to split our room's rent in half...and we also lived with other family members which further made our apartment rent smaller! This was definitely key, as I did my masters in a HCOL and it would have cost waaay more to live alone, even if I lived further from downtown.
Although it also occasionally stressed me out living with other people apart from my SO, I reminded myself this was only until I got a job and could afford to move out. And it really helped!
#3. Started working as soon as possible
As an international student in the U.S., you are not allowed to start working until you get 1 year of schooling under your belt. So even before 1 year was up, I was frantically looking for a paid internship to help me build my U.S. work experience while also helping me financially.
During my entire second year of school, I also worked on campus while studying. My wages from both my internship and my school job went straight to paying off loans.
After graduation, most of my peers pushed off their start dates or took gap weeks / months to take a break after a stressful grad school experience. Me? Nope, I went straight to work right after graduation. While a lot of my peers questioned me and pushed back on me, 2 years later I don't regret it as it definitely was the right decision in my mind. The stress of my loans accumulating would have outweighed the relaxation I would have gotten during those gap weeks / months.
#4. Refinance
I was making fantastic progress paying off my loans during and after grad school, but as interest rates kept rising post-COVID, I continuously tried to find ways to convert my horrendous variable interest rate to a fixed interest rate to stabilize my interest accumulation. Unfortunately, most loan servicers don't allow non-U.S. citizens to refinance due to the risk of the visa expiring and having to return to their home countries. However, after some calls and a lot of research, I found one company that allowed me to refinance even as a non-citizen, and that lowered my interest rate by 4-5% initially, which was huge.
I refinanced for 2 more times (every 6 months), until I got the rate down to a more reasonable ~6.5%, which was the rate when I paid it off.
#5. Put all bonuses
My last tip was related to my bonuses at work. The temptation was strong with this one! I got some bonuses at work related to my yearly performance. While the amount was not crazy huge, I felt tempted to spend it on small "rewards" for myself that I wanted but didn't need.
I largely resisted these urges and put aside a very small amount for myself but paid majority of each bonus into my student loans. I reminded myself that paying these loans is also a form of gift / reward for myself!
I had to practice a lot of discipline during this process, but I couldn't be happier now at the other side with previous-me's choices. Now I can finally move forward and think about my future life without the burden of any of my student loans. 😃
