Money

Stuck in a Student Loan Standoff? Get Stubborn!

There is nothing like a 1,000 pound brick hanging over your head.  Imagine that brick following you everywhere you go, no matter what you do.  You can go around ignoring the brick, but eventually you know it’s going to fall on you and it’s going to hurt.  That’s what it’s like with student loan debt.

As of 2018, Americans collectively have $1.5 trillion of student loan debt according to Forbes.  Safe to say that is an enormous brick, weighing above the heads of 44 million borrowers.  And debt truly is a crushing burden that can negatively impact your path to financial freedom.  

So the next question is this:  What do I do?  Well it’s simple.  Get stubborn.  I mean really stubborn!  Know that it is going to take pig-headed determination to tackle student loan debt.  It means foregoing that new jacket, those new shoes, that shiny new WhateverYaCallit and face your opponent dead in the eyes.  Be honest with yourself.  Look at the amount, look at the interest, and come up with a plan.

My wife and I were able to pay off more than $70k in student loans by being stubborn.  Our plan included paying off the highest interest loan first known as the debt avalanche method, followed by the remaining highest, followed by paying off smallest loan remaining known as the debt snowball, and then lastly paying off the last loan.  For a good explanation of both of these methods click here.  We got the money together and made some large sacrificial payments all at once, and simply threw additional funds towards them (above the minimum payment) until they were eradicated.  I remember one particular payment was enough to pay for a good used car – OUCH!

Advantages and Disadvantages

It should be noted that there are both advantages and disadvantages to paying off your student loan debt early.

Advantages:

  1. Less paid interest over time which means less money paid for the loan overall.
  2. Freedom to allocate the money every month needed for payments elsewhere, let’s say towards investments, vacation fund, savings, etc. once student loan debt is paid off.
  3. No more brick over your head = no more student loan debt worries.

Disadvantages:

  1. Student loan interest deduction on your taxes.
  2. Opportunity cost of paying other higher interest debts off instead.  For example, paying off a 15% interest credit card instead of a 5% interest student loan.
  3. Opportunity cost of making higher returns on investments.  For example, making 10% returns on a stock investment instead of paying off a 5% interest student loan.  Not to mention compound interest over time!

Come up with a Plan

So you’ve decided to stubbornly attack your student loan and pay it off.  How long will it take?  How much extra money above the minimum payment can you throw at it?  The choice is yours but whatever you do, come up with a plan.  Write it down.  Write down your goals.

Let’s use an example:

$30,000 student loan with 5% interest rate and 10 year payoff schedule

Estimated monthly payment of $318.

Once you’ve crunched numbers, you realize that you could pay $350 towards it each month without sacrificing too much.  The difference of $33 amounts to less that one dinner at a restaurant per month.  Using this student loan prepayment calculator you discover that you can trim off 1 year and 1 month and save $1000!

If you need help coming up with a plan, feel free to contact me.  I’d be glad to help.

45 Comments

  • gamefly

    Wow, amazing weblog layout! How long have you been running
    a blog for? you made blogging glance easy.

    The full glance of your web site is magnificent, let alone the
    content!

  • gamefly free trial

    Wow, amazing blog structure! How long have you ever been running a blog for?
    you make blogging glance easy. The overall look of your website is excellent, let alone the content material!

  • gamefly

    An outstanding share! I have just forwarded this onto a co-worker who
    was doing a little homework on this. And he actually bought me lunch simply because I discovered it for him…

    lol. So allow me to reword this…. Thanks for the meal!!
    But yeah, thanx for spending time to talk about this issue here on your site.

  • gamefly free trial

    I’m now not positive where you’re getting your info, however great
    topic. I needs to spend some time learning more or
    figuring out more. Thank you for magnificent info
    I was searching for this info for my mission.

  • gamefly free trial

    This is very interesting, You’re a very skilled blogger.
    I’ve joined your feed and look forward to seeking more
    of your fantastic post. Also, I’ve shared your site in my
    social networks!

  • minecraft free download

    I’m amazed, I have to admit. Rarely do I come across a blog that’s both educative and
    interesting, and let me tell you, you have hit the nail on the head.
    The problem is something that too few people are speaking intelligently about.
    I am very happy that I stumbled across this during my search
    for something relating to this.

  • download minecraft free

    Thanks a lot for sharing this with all folks you actually understand what you are talking about!
    Bookmarked. Please additionally discuss with my web site =).
    We could have a link alternate arrangement between us

  • g

    I think this is one of the most significant info for
    me. And i am glad reading your article. But want to remark on some general things, The web site style is perfect, the articles is really great : D.
    Good job, cheers

  • g

    Thank you for the good writeup. It in fact was a amusement account it.
    Look advanced to far added agreeable from you! However, how could we communicate?

  • g

    Heya i’m for the primary time here. I found this board and I to find It truly helpful
    & it helped me out a lot. I hope to present something again and aid others like you aided me.

  • g

    I seriously love your website.. Great colors & theme.

    Did you make this site yourself? Please reply back as I’m planning to
    create my very own website and would like to find out where you got
    this from or exactly what the theme is called.
    Thanks!

  • g

    hello!,I really like your writing very so much! proportion we keep in touch more approximately
    your article on AOL? I need an expert on this space to resolve my problem.
    May be that is you! Taking a look forward to peer you.

  • g

    It’s a shame you don’t have a donate button! I’d without a doubt donate to
    this excellent blog! I suppose for now i’ll settle
    for bookmarking and adding your RSS feed to my Google account.
    I look forward to fresh updates and will share this blog with
    my Facebook group. Chat soon!

  • g

    Hello there, You’ve done an excellent job. I will certainly digg it and personally recommend to my friends.
    I am sure they’ll be benefited from this web site.

  • minecraft free

    My brother recommended I might like this blog. He was totally right.
    This post actually made my day. You cann’t imagine
    just how much time I had spent for this info! Thanks!

  • minecraft free

    It is appropriate time to make some plans for the future and it’s time to be happy.
    I’ve read this post and if I could I desire to suggest you few interesting things or suggestions.
    Perhaps you could write next articles referring
    to this article. I wish to read more things about it!

  • minecraft download free

    Hi! I just wanted to ask if you ever have any trouble with hackers?
    My last blog (wordpress) was hacked and I ended up losing months of hard work due
    to no backup. Do you have any methods to prevent hackers?

  • minecraft download pc

    It’s perfect time to make some plans for the future and it is time to be happy.
    I have read this post and if I could I desire to suggest you few interesting things
    or advice. Perhaps you could write next articles referring to this article.
    I desire to read more things about it!

  • minecraft free download

    Write more, thats all I have to say. Literally, it seems as
    though you relied on the video to make your point.
    You definitely know what youre talking about, why waste your intelligence on just posting videos to your weblog when you could be giving
    us something enlightening to read?

  • minecraft download for free

    Hey! I know this is somewhat off-topic however I needed to ask.
    Does operating a well-established website like
    yours require a large amount of work? I am brand
    new to running a blog however I do write in my journal on a daily basis.
    I’d like to start a blog so I will be able to share my experience and feelings online.
    Please let me know if you have any recommendations or tips for
    new aspiring blog owners. Thankyou!

  • mojang minecraft download

    Write more, thats all I have to say. Literally, it seems as though
    you relied on the video to make your point. You clearly know what youre talking about, why waste
    your intelligence on just posting videos to your blog when you could be giving
    us something enlightening to read?

  • free minecraft download

    Hello! This is kind of off topic but I need some advice from
    an established blog. Is it tough to set up
    your own blog? I’m not very techincal but I can figure things out pretty fast.
    I’m thinking about making my own but I’m not sure where to start.
    Do you have any ideas or suggestions? Thank you

  • minecraft free download

    Great beat ! I would like to apprentice while you amend your website, how can i subscribe for a blog site?
    The account helped me a acceptable deal. I had been a little
    bit acquainted of this your broadcast offered bright clear concept

  • minecraft download pc

    I like the helpful information you supply for your
    articles. I will bookmark your weblog and check once more right here regularly.
    I am somewhat certain I’ll learn many new stuff right here!
    Best of luck for the following!

  • oprol evorter

    Do you mind if I quote a couple of your articles as long as I provide credit and sources back to your blog? My blog site is in the exact same niche as yours and my users would really benefit from a lot of the information you present here. Please let me know if this alright with you. Thanks!

Leave a Reply

Your email address will not be published. Required fields are marked *

Sponsor a Child in Jesus Name with Compassion