How I paid off student loans early

Young man considers paying off student loans.

This grad’s strategy gave him a head start in eliminating debt before graduation

Patrick Ortman’s college expenses totaled nearly $150,000. While he was able to reduce some costs by earning a scholarship and working a part-time job, he also had to take out student loans. But he didn’t wait until graduation to start paying off that debt. Here’s how he paid off loans while still in college — and what motivated him to start.

I started out college as a philosophy major, but by the time I graduated four years later, I switched over and earned my degree in finance. Now out of school for a few years, I’ve made money my career: As a financial planner, I help other young families achieve their goals. But, I think my interest in helping others navigate their finances started when I was in college — when I was focused on paying off my student loans.

Thanks to my academic record and high test scores, I earned an academic scholarship worth $48,000. My parents were limited in the financial support they could offer me. And though my scholarship and family support gave me a good start, it wasn’t enough to cover the total cost of my college education including room and board, spending money, books, fees, and about 60% of my school’s tuition.

The game plan

Though you typically have a six-month grace period after graduation to start paying off your student loans, I knew I didn’t want to delay the inevitable. In fact, nothing in particular motivated me to start paying off loans while still in college — I just wanted to knock that balance down as quickly as I could!

After accounting for my scholarship, I had nearly $100,000 worth of expenses and tuition left to pay. That’s where my student loans and part-time job came into play. I took out $79,000 in loans over the course of four years and worked multiple jobs so I could use my income to help cover costs.

As a freshman, I started making monthly payments on my first loan as soon as I started earning a paycheck from my on-campus job. I knew I wanted to make a payment of about $200 per month, so that kept me motivated to work. I worked two jobs during the fall and spring semesters, and took a third job over the summers. I had a job on campus, two different jobs waiting tables, an internship with a commercial real estate firm, and a position as a translator for a film company.

By the time I graduated, I paid off a total of $24,700 in student loans — almost one third of what I owed. About $15,000 of that came from my own earnings. The other $10,000 came as a gift from a family member. During my final semester, I paid for my room and board with my own income, so was able to avoid adding to my student loan balance before I graduated.

“By the time I graduated, I paid off a total of $24,700 in student loans — almost one third of what I owed.”

You can do it, too

If you’re in this situation and want to start paying off loans while still in college, know that it can be done — but be ready to work really, really hard. It’s not always fun to wait tables on a Friday night when your friends are at a party. But that experience helped prepare me for my full-time job after school.

Another tip: If you plan to pay loans off early, target the highest interest rate loans first. I had one variable rate loan at 9.5% and it accrued interest while I was still in school. Getting that paid off first saved me hundreds of dollars. I left the loans with 2% and 3% interest rates for after I graduated.

The ability to pay off your loans while in school is not feasible for everyone. But if you can afford to work and pay a little each month, you can learn valuable budgeting skills and make a significant dent in your repayment plan after graduation.

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