How I Paid Off $132,000 of Student Loan Debt

In today’s post I talk about how I paid off $132,000 of student loan debt. I share the exact amount I paid and the six year history that got me here.

Estimated read time ~ 10 minutes, estimated watch time ~6 minutes at 1.5x.

How it all started.

I took out $118,000 for 6 years of public in state school to get my Pharm.D. which I graduated with in May 2013. My federal student loans had an average interest rate of about 6.5%. After graduation I had $10,700 of capitalized interest added on to my debt.

May 2013 Student Loan Balance: $128,700

Repayment during residency was tough.

I made small income-driven payments as a pharmacy resident because that was really all I could afford on a resident stipend. Despite these payments, I couldn’t keep up with the interest and had $3,300 of capitalized interest added on to my debt. My highest point of student loan debt was $132,000 in July of 2014.

July 2014 Post-residency Balance:

$132,000

When I finished residency in late June of 2014 and finally started making pharmacist salary I really started trying to wipe out my student loans with a vengeance. The fact that I had paid about $4,000 toward my student loans during residency but my loans went up by $3,300 really frustrated me. So I knew the secret was to make high payments, pay extra, and work fast.

All in all in the calendar year of 2013 I paid $2,600 toward my student loans. And in the calendar year of 2014 I paid $12,741.50. During the calendar years that I was a student & resident I paid a total of $15,341.50 toward my student loans. Unfortunately because of capitalized interest I had accrued $19,591.49 of interest…. sigh.

My first year making real pharmacist salary.

Moving on to 2015. In my eyes I was finally making bank as a pharmacist. Earnings are all relative, to this day I feel loaded compared to resident salary and working two jobs as a student to scrape by. I went to school for so long and paid so much to make good money and I’m so grateful I’m able to earn such a comfortable living. Anyway, making good money meant I could really go after my student loans with serious effort.

In the calendar year of 2015 I paid $24,548.32 toward my student loans. And it felt like a lot of money. Of those payments, $7,409.80 went to interest. So if you combine 2015 with the previous years, I paid $39,889.82 toward my student loans, and $27,001.29 went to interest.

2015 Student Loan Payments:

$24,548.32

Despite the fact that I had paid nearly $40,000 over the past 2.5 years since graduation I had only reduced my principal by less than $10,000 ($9,888.53 to be exact). I was frustrated & beaten down but knew there was only one way out and that was forward.

The tax deduction that started it all.

In 2016 I remember filing my 2015 taxes, and submitting the tax form to claim the interest deduction on my student loans. I wasn’t a particularly savvy borrower and didn’t know a whole lot about the deduction, other than I filled in the box on TurboTax. But this year, when I filled in the box, I got a wakeup call.

I couldn’t claim the deduction because I was above the individual income cap. I lost it, I screamed at my laptop as though my rage could melt this ridiculous limit out of tax law. The only reason I made above the individual income cap was because I busted my ass in school and took out six figures of student loan debt to become a pharmacist. The government was taking my money twice, first when they taxed my income, and second when they collected thousands of dollars of interest, I was furious.

I felt like was working hard and getting screwed. Come on! I had paid so much toward my student loans… for what? To see the balance decrease by under $10,000… there had to be a better way!

This frustration started my entire journey to becoming a savvy repayer and dedicating myself to developing student loan repayment expertise. Because of this incident, you’re reading this very blog!

It turns out there was a better way, but I wouldn’t discover that until later in 2016. So for now I continue making extra payments and trying to really tackle my student loans.

Time to lower my interest rate.

In 2016 I paid Navient $10,500 (just under $3,000 was interest) before I refinanced my remaining $99,000 of student loans with Earnest for a 3.36% variable interest rate. I found out about refinancing from a friend and started researching. Ultimately, I got estimates for a few different companies and then chose Earnest and a variable interest rate because it was significantly lower than the offered fixed rate (around 1.2% lower) and I knew that if it started to creep up I would refinance again.

If you’re reading this and thinking about refinancing be sure to start with the Student Loan Refinancing Strategy Guide. Refinancing was the right choice for me but might not be for you.

2016 Refinancing Details:

Balance: $99,000

Interest rate: 3.36% variable

So for the second half of 2016 after refinancing I paid $14,000 toward my student loans, but unfortunately don’t have documentation of the amount that went toward interest. My 2016 grand total was $24,500 toward my student loans.

2016 Student Loan Payments:

$24,500

The year of the fence.

In 2017 my boyfriend at the time (now fiance) bought a house, no homebuying for me since I still had a mortgage worth of student loan debt. We decided to fence in the yard for my dog Link, that meant some tree removal and the cost of a fence. We split the costs evenly but it was still thousands of dollars.

I’m happy we spent the money on the fence. Link loves the yard and I love not having to let him out on a leash in whatever undesirable weather we’re having.

Link is really important to me, I love him dearly. It makes me so happy to play fetch with him in the yard and see him running around sniffing to his heart’s content. Money spent on the fence was money I couldn’t use to pay down my student loans. A worthwhile exchange for me, because that spending still gives me a lot of joy.

My variable interest rate had crept up to just over 4%. So in July 2017 I refinanced again, this time locking my remaining $73,000 in for a low fixed interest rate of 3.37%. But with all the money I spent on a fence, my student loan payments suffered a bit in 2017. I paid $24,000 toward my loans that year.

2017 Refinancing Details:

Balance: $73,000

Interest Rate: 3.37% fixed

Student Loan Payments: $24,000

2018 was the year of the rally.

I looked at my remaining balance and realized I could be out of debt before I turned 30. So I set a new goal and started ramping up my payments to make sure I paid my student loans off before August of 2019.

A few things really helped me tackle my debt in 2018. The first, was a new job with a significant salary increase. The second was the nearly 300 hours of PTO I cashed out when I switched jobs. That money helped me pay for my wedding and my student loans.

In 2018 I put $44,000 toward my student loans. I was paying the lowest amount of interest ever and the principal balance was dropping fast.

2018 Student Loan Payments:

$44,000

In 2019 I finished this thing!

So here we are in January of this year. I’m starting out with a student loan balance of just over $22,000 . After six years of repaying my student loans, I realize I’m finally going to pay them off!

I finished my student loan journey by paying $22,500 in 2019 toward my student loans and only $180 in interest. I made my last student loan payment ever July 3rd 2019. I’m finally free and I can’t believe it!

Just over six years after finishing pharmacy school I paid $154,585.55 on my student loans. For me, this repayment pace had some balance. I repaid my debt fairly quickly and sacrificed some things to do it but was also able to travel a little and spend money on what mattered most to me.

Where are you at in your repayment journey? Leave me a comment below or on the Repayable Facebook page. I love hearing from my fellow repayers. Student loan repayment is a long road and the time goes by better with company!

*A quick note about the numbers. Some of my student loan repayment history is incomplete. I don’t have complete records from the lenders during my entire repayment period, especially early on and in the middle when earnest was bought out by Navient. I relied on bank statements to see how much I paid over time, but couldn’t see the amount of interest and remaining loan balance.