Teaching is a passion. For 27-year-old Diana, it was her dream job. She entered Syracuse University excited to embark on the career path she wanted. But what she left with was a graduate degree and $201,000 of student loan debt.
“It felt completely overwhelming,” said Diana.
A focus on the dream, not the student loan debt
Diana was focused on getting into one of the best education programs in the country and, of course, making it to her own classroom one day. She took out the majority of her student loan debt during her four years of undergraduate studies.
“For undergrad, it was all I knew to do. My parents told me that this was how I could go to college, so I took out the loans,” said Diana. “I was incredibly naive and didn’t think about how much college was going to truly cost me after four years.”
In 2014, Diana graduated with a Bachelor of Science with endorsements in Inclusive Elementary and Special Education. She then promptly enrolled in graduate school at Syracuse. Diana planned to pursue a Master of Science in Early Childhood Special Education.
A seriously terrifying bill
During Diana’s first semester of grad school, she got a wake up call. Or, as she puts it, “…reality slapped me in the face.” Her private student loans from undergrad went into repayment before her loan servicer knew she was still in school.
The bill totalled $1,400. This was just for her private student loans.
Diana admitted, “I had no way of affording it all and had to acknowledge the debt I took on and really didn’t understand.”
Changing a degree while in grad school
Grad school is hard. But Diana knew she had to change how she was paying for school after getting that bill.
She set a meeting with her school department adviser, who was honest and blunt with her. The adviser showed Diana average salaries for teachers and compared them to her student loans. Diana’s minimum payments would be $2,000 when she graduated and her estimated take home about $3,500. “I was shocked,” Diana said.
Diana had to make a hard decision. The fact was, she wouldn’t be able to afford her student loan debt unless she moved back into her parents’ house in New Jersey and changed her degree. Diana explained, “I didn’t have any other choice without making my situation worse.”
She changed her grad degree to a Master of Science with endorsements in Literacy Education. This degree was more marketable and required about 10 credits less than the one she had planned on getting.
Finding a new way to pay for grad school
Diana wasn’t about to make the same choices of relying on student loans to finish her degree.
She applied for scholarships and grants to fund grad school.
One of these was the Teacher Education Assistance for College and Higher Education (TEACH) Grant. She was awarded the TEACH Grant, which she knew would require working for at least four years in a Title 1 school after graduation. According to Diana, this knocked $18,000 off her tuition bill.
Since Diana was an alumna at Syracuse, she was able to get a discount of 33% off her classes. Her school adviser helped her out, too. The advisor knew there was extra money from a scholarship had Diana applied to but didn’t qualify for and was kind enough to email the person in charge of scholarship, who knew Diana from student teaching in undergrad. About two weeks later, Diana received an email that she had been awarded the funds.
Her hunt to pay for grad school didn’t stop there. She looked for opportunities outside the school through employers and landed a job at a preschool that paid for four credits during two semesters.
“I made drastic changes for grad school and ended up only taking out about $20,000…” Diana said.
Time to tackle $201,000 of student loan debt
In August 2015, Diana finished graduate school with $201,000 of student loan debt. She got a teaching job 20 minutes from her parents’ house at a Title 1 school and started in September 2015.
The first student loan paid off
In Diana’s first year of teaching, she had a 10-month salary of $56,000. She didn’t pay extra to debt, since her salary wasn’t much higher than her minimum payments. Instead, she focused on finding a side hustle to raise her income. She eventually found a tutoring gig and was able to put more money toward repaying the debt.
In 2016, she fully pay off her one student loan with her tax refund. “Paying off the first loan was a huge relief because I finally had some real movement with each payment. It finally felt like I could actually do this,” Diana recalled.
Paying off one loan started the ball rolling on paying off the others. When one debt was taken care of, there was more money available to put toward her other student loans.
Strategies for paying back six figures of debt
Diana feels lucky to have been hit with the reality of her student loan debt while in grad school, stating:
I was extremely fortunate that I got my reality check early. This allowed me to have a plan in place when my job started and I got my first paycheck. I was immediately able to put my plan into action.”
The plan for paying back her student loans was to use the debt avalanche method. This meant she’d make the minimum payments on all loans, and then any kind of extra funds would go toward the loan with the highest interest rate.
To make this happen, Diana sought ways to increase her income and took on summer jobs in addition to her side hustles. To combat not having a paycheck in the summer, she created a sinking fund for savings during the school year so she never missed a payment. Diana found a budgeting system that worked for her and continued living with her parents to keep expenses low.
Refinancing private student loans for a better rate
Diana had a mix of private and federal student loans. She was strategic in which loans she paid back first. She said:
I wanted to save the most money and my highest interest rate was 8.05%. I planned to pay off my private loans first, then my federal loans. Federal loans have so many different programs in place to utilize, I knew it would be better off to pay off the private loans first.”
When Diana had about $45,000 left in private loans, she refinanced with Earnest. Her rate dropped down to 4.97%, which was lower than some of her federal student loan rates.
Even though her original plan was to pay the loans with the highest interest rates first, she decided to continue paying down her private loans after refinancing.
Using these strategies, Diana paid off a little over $134,000 of student loan debt in four years on a teacher salary. She deserves a round of applause for that!
Continuing the hustle of paying down student loan debt
Diana is at a point where she can move forward with her career. She completed her four years of service required for the TEACH Grant and transitioned to a new teaching position as a reading specialist in a private school. This new position comes with a pay bump, and she now makes $60,000 per year.
Because Diana has paid off so much student loan debt, she can afford to live on her own by slowing down her aggressive debt payments just a bit. She was able to move out of her parent’s house to East Stroudsburg, Pennsylvania in June.
Diana plans to pay off the remaining $66,000 of student loan debt by her 30th birthday. She’ll use the same methods, especially increasing her income and keeping expenses low. She shared:
This was the real game-changer for me and sped up my debt payoff a lot. Finding a way to decrease high expenses, like housing, that was a major budget expense for me and allowed me to pay off my debt so much faster.”
Moving in with your parents isn’t an option for everyone. Diana also suggests using a budgeting method — like the zero-based budget, which assigns every dollar a job. She notes that keeping every dollar accounted for makes sure extra money goes toward your debt.
Paying off over six figures of student loan debt is no easy feat, especially as a teacher. Diana took charge of her student loans even when she was feeling overwhelmed. Student Loan Planner® wants the same for you. We’ll meet you right where you’re at. We specialize in tackling some seriously hefty student loan debt with a debt payoff plan that works for your life. Book your consultation to get out from under the weight of your student loan debt.