When you graduate, you’re filled with hope for the future. You want to get a good job and make a good living. If you have student loans, you hope to pay those back easily, too. But it doesn’t always go that way.
When 21-year-old Moriah Joy, co-founder of the blog Our Table for Two, graduated in 2018, she had $34,000 in student loan and was newly married. What should have been an exciting time in her life began with a lot of shame, guilt and anxiety around her student loan debt.
Graduating from college with five-figure debt
Moriah graduated in 2018 with a degree in English with a concentration in professional writing. She took out 11 student loans to obtain her degree, a mix of subsidized and unsubsidized federal loans with an average interest rate of 4.03%.
Right after graduation, she married her husband and immediately started her newly-wed life bringing $34,000 to the table.
“My husband and I got married the day I graduated college, and I was super guilty I was bringing so much debt into the marriage,” she says. “I think that hung over my head a little too much during the first few months when I was working a crappy part-time job with irregular hours.”
Her spouse came into the marriage without any debt. Though the couple agreed to tackle it together, it was still a tough reality to face as newlyweds. Moriah felt guilty about her debt and was stressed and frustrated.
Instead of basking in joy from graduating college and getting married, there was an undercurrent of stress and a literal ball and chain from debt.
Paying off debt on a small income
Moriah owed an “average” amount of student loan debt around $34,000. But what wasn’t so average was her debt-to-income ratio.
It might be easy to pay off that debt amount if you’re making close to six figures. But last year, Moriah made $20,000 as an education specialist and her husband made $30,500. Not exactly a high income — and she owed more than she was making. But Moriah was committed to figuring out how she could pay down debt, as frenetic thoughts about her debt were consuming her.
“I obsessed over student loan debt. It consumed my spare time. I looked for tricks and tips to hack our budget in order to find spare money,” she explains.
Moriah was able to increase her income from $20,000 last year to $33,000 this year as an editorial assistant. The additional income has helped her continue to pay down debt.
After earning more, making cuts to the budget and getting on the same page, the couple began putting $1,000 per month toward her student loan debt. In total, they’ve paid off $12,000 since last year and still owe around $21,000.
Managing debt and other goals
Paying off student loan debt is a journey, but it’s not the only goal in life. For Moriah and her husband, they also wanted to save for retirement and a home.
It’s been challenging throwing so much money toward debt while also trying to save for the future. But Moriah felt joy when she reached her so-called “Zero Day” — where her assets and liabilities broke even, essentially getting her out of a negative net worth.
“The day that we hit Zero Day, I cried. It’s so cliche, but I feel like there’s a weight lifted off my shoulders,” she says. “We’re looking at more long-term goals, like saving for a down payment on a house and creating a longer time horizon for our money goals. But we couldn’t do that until I felt comfortable with the amount of debt we have and the speed at which we’re paying if off.”
Now the couple is no longer in the red and is working to pay off the rest of the student loans while also planning for the future.
Looking toward the future
After paying down $12,000 in just over a year and reaching “Zero Day,” Moriah and her husband want to focus on saving for a house and for retirement.
Currently, the couple has enough money to pay off the remaining debt, though it will remain untouched for now as some of it’s tied up in retirement accounts.
So far the biggest hurdle aside from paying down debt on a low income has been the emotional toll of debt.
“I think the emotions surrounding the debt have been harder than repaying the debt itself. And I don’t think there’s a large enough conversation about that aspect of debt repayment. I’ve felt guilt and shame and frustration and anger,” she explains.
To help combat some of those negative emotions, Moriah has taken note of what her student loans have given her. She didn’t come from an independently-wealthy family and she needed the loans to go to school.
“I’ve shifted my thinking from dreading to thanking because of the experiences they allowed me,” she says.
Moriah encourages other graduates to not internalize the shame, guilt and anger that can come with having student loans. Focus on paying them back and accept what the loans offered you. Shifting your perspective can make the payoff process a bit less painful.
Though Moriah still has more time to go, she’s in a good place to focus on her future and become debt-free.
If you’re on your own student loan journey and want to create your own debt payoff story, contact us for a customized plan.