When Kellie S. graduated in May 2017 from dental school, she was excited to begin her career and start her life with her husband. She wanted to buy a home, start a family and fulfill all of the dreams she’d put on hold while in school. But soon she realized she had more than six figures in debt, and her dreams came to a pause.
Read on to learn more about Kellie’s student loan debt success story and how she’s working to be debt-free within seven years.
Graduating with multiple six figures of debt
When Kellie graduated in May 2017, she had $201,000 in student loans from dental school. But she wasn’t the only one with debt. Her husband had $58,000 in student loans as well. Between them both, they were looking at paying back a whopping $259,000 in student loan debt.
“When I graduated at 26 years old, I wanted to start our lives [with my husband]…we felt like we were standing in a giant hole. That’s not how we wanted to start our lives,” she said.
To combat her student loan debt, the couple sold their condo and moved into a tiny house to cut expenses. After that, though, they split their time living there and with her mother-in-law, who was dealing with unexpected health issues.
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Despite cutting down on living expenses, the debt still loomed over their heads, preventing them from living the life they dreamed of.
“I had gone to school forever and knew I wanted a certain life and lifestyle, and my debt was prohibiting me from having that life. I knew I wanted to get rid of debt as quick as I could,” she explained.
After going into panic mode, she sought student loan help online. That’s when she found Travis Hornsby, founder of Student Loan Planner.
Finding Student Loan Planner
Kellie and her husband got in touch with Student Loan Planner to get a customized plan to help tackle their $259,000 of student loan debt. Out of Kellie’s $201,000 in student loan debt, $170,000 were federal loans while the rest were private loans.
When Kellie contacted Travis, she was paying $1,400 per month with a 25-year repayment term. Her husband, who had graduated in 2013 and was on an Income-Based Repayment (IBR) Plan, was paying $130 per month.
The killer part was that his debt was actually less when he graduated than when the couple got in touch with Travis. The $130 payment on IBR didn’t even cover the interest on his student loans, and the balance continued to balloon.
Kellie knew she didn’t want to be saddled with debt for 25 years and knew the ballooning balance on her husband’s loans wasn’t headed in the right direction.
So when the grace period was up and she got in touch with Student Loan Planner, Travis advised her to refinance her loans and score a better rate.
In January 2018, Kellie refinanced her federal student loans with student loan refinancing company CommonBond. Though her payments have increased, she’s paying off debt faster and making progress.
“My payment went from $1,400 for 25 years to $2,500 for seven years. My balance was $172,500, and now it’s $140,000. It’s exciting to hit little checkpoints,” she said.
By having Student Loan Planner’s help and refinancing their student loans, the couple now had a plan to pay off all of their debt in less than a third of their original repayment timeline.
On top of their focus on student loans, over the past 18 months the couple also paid off $25,000 in auto loans, loans from family and loans for their wedding.
Combined, they’ve paid off $62,000 in student loan debt as well, now owing a total of $197,000 — a departure from the $259,000 they used to owe.
“We broke that $200k mark!” she exclaimed.
Getting a plan in place helped the couple get their student loan debt under control and have a plan for the future.
Two steps ahead, one step back
Having a plan in place helped the couple make progress on their debt. Paying off that debt gave Kellie the confidence to purchase her own practice earlier this year. Her living expenses were still low, and she knew having her own dental practice would help build financial freedom for the future.
On top of that, Kellie and her husband were ready to upgrade their living situation and purchase a home. They got a huge pre-approval letter for a $500,000 mortgage, with no Private Mortgage Insurance (PMI) and an interest rate of 4.25%.
Everything seemed to be going fine, and the loan officer made it seem like everything would go through. But ultimately, the loan was denied.
Because Kellie had just purchased her own practice, as part of the loan application she needed to provide one year of corporate taxes from her business — which she didn’t have.
So they had to take her income off the application. While her husband’s income was enough to cover the mortgage, it wasn’t enough to get approved because of the couple’s debt load.
After feeling like they were making progress and getting their life in order, suddenly they were back to square one. To make matters worse, they did have $40,000 saved up, which could have been used as part of the down payment.
But before all of this happened, one of their cars broke down, and the couple decided to pay $20,000 in cash for a used SUV. On top of that, they threw $10,000 at their student loans. While they felt good about paying cash for the car and paying down debt, that cash could have helped their loan application.
Dealing with this setback has been frustrating — yet another delay to starting the life they want to live. But instead of getting discouraged, this situation has encouraged Kellie even more to get out of debt.
Next year, she plans to refinance again. As she continues to pay off debt with her husband, the plan is also to rebuild their fund for a down payment.
How to reach your student loan debt success story
When Kellie graduated, she felt overwhelmed by her student loan debt. She felt like the life she planned with her husband was out of reach. But getting student loan help has made everything more manageable, despite the setbacks.
“The thing Travis gave me the most of is confidence. I felt so lost when I contacted him,” she explained.
She went from hardly making any progress and feeling unsure of the best strategy to having a clear plan to get out of debt in seven years. Her advice for other student loan borrowers is all about knowing the numbers and getting a plan.
“I would say get a plan and know exactly how much debt you’re in. Know what you can do every month to make a dent. Give yourself that date that you know you will pay off debt…it will relieve the psychological burden,” she said.
Getting student loan help is not only a financial benefit but a mental one as well. For Kellie and her husband, it’s all about progress and balance. The goal is to become debt-free but also work toward buying a home and starting a family. It’s not one or the other.
“Stick toward your goal of becoming debt-free and at the same time maintain your mental health and moving forward with your life,” she said.
Need help with your student loans? Get in touch for a student loan consult!