How I Paid Off Over $21,000 of Student Loan Debt in Under 22 Months

I graduated from my Bachelor of Science degree owing over $21,000. I managed to pay it off in less than 22 months.

My journey out of student loan debt is how Money After Graduation began! In the early days when this website was a personal blog, I chronicled where every single penny went.

How I amassed nearly $22,000 in student loan debt in the first place

I took out my first student loan in my second year of university. I can’t remember the original amount I was lent, but by my final year of school, my total student loan balance had ballooned to $20,580. I remember getting the bill and thinking it was more than I had ever even made in a single year. The sum knocked the wind right out of my chest.

This was in 2010, where my student loan debt was almost exactly average. Today, most students graduate owing much more.

I worked throughout my degree

My student loan debt was small in the grand scheme of things. In fact, it was too small. While I received enough student loans to pay tuition bills, there was never anything left over to live off of.

I worked through my entire degree, often at multiple jobs. I served tables, babysat, tutored, and more. I would work anywhere from 20 to 30 hours per week during the school year, and then 40 to 50 hours per week in the summers.

My jobs paid well, which was lucky. I made tips serving tables and I was paid $20 per hour for childcare. I tutored Chemistry for $30 per hour. By my third year, the university hired me to teach the summer organic chemistry laboratories for $2,500 per six-week session. I often went from one job to the next, my classes sandwiched somewhere in between.

I wish I had been more financially secure to afford to devote more time to my school work. Or at the very least unwind sometimes. Many of my peers had their degrees partly or fully paid for by their parents. They worked for spending and travel money or didn’t work at all. I remember when the amount I made in tips determined how much food I could buy at the grocery store after my shift serving tables.

I lived in cramped apartments and went without a car

My small income and high expenses necessitated a frugal life. I never had the luxury of living alone, always sharing a house with roommates or a boyfriend. I only owned secondhand furniture. My entire wardrobe was made up of $10 items from Forever 21.

I had a driver’s license but couldn’t afford a car. I relied on public transit to get anywhere I couldn’t walk to. A transit pass was included in my tuition, which meant taking the bus or train was no added cost to my budget.

I remember living on as little as $700 or $800 a month. It’s a sum that is often my monthly grocery spend today, and remembering when it represented my entire livelihood feels completely unreal.

I still saved money even when I was broke

Perhaps the wildest thing about my money in my undergraduate degree is I still found a way to save money. I diligently tucked away $50 to $100 per month in an investment account for three years. By the time I graduated, the account had grown to $2,500.

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The habit of saving money even when it feels like there’s next to nothing to save has been the best financial lesson of my life. During my degree, $50 per month felt like such a piddly amount to set aside, while simultaneously putting a huge dent in my budget. But it truly added up.

My little savings added up faster and bigger than I expected. I would ultimately use that $2,500 mutual fund I saved towards my student loans. It let me knock down the balance to a manageable level, reduced the amount of interest I paid, and got me to debt-free faster.

How I paid off all my student loans in less than 2 years

In total, I paid off $21,628.12  in student loans. This total was a $20,580 principle balance plus $1,048.12 in interest. My entire student debt was gone in only 22 months.

Doing so wasn’t easy. It took a mix of hard work, luck, and privilege to achieve. Here’s how I did it.

I scored a job with a $50,000 starting salary and full benefits a few months after graduation

Spoiler alert: I was able to tackle my student debt quickly because I had the income to do so. While it’s true my aggressive debt repayment journey did include discipline and grit, I was only able to make it work because I had money to move around. How much you earn determines how fast you can pay off debt.

While it took a few months to find the job I did, I was lucky. I worked 35 hours per week for $50,000 per year, full benefits, and an employer pension. Second only to getting a post-secondary education in the first place, this singlehandedly was the most powerful force in setting me up for longterm financial security in adulthood.

The first job you get out of school is the most important one. Be ruthless when negotiating your salary and getting paid what you’re worth.

I continued to live like a student

The one small luxury I treated myself to after graduation was living alone. But it wasn’t glamorous. My apartment was $700 per month, with no dishwasher and a coin laundry room. I didn’t have to furnish it because I took it over from a friend that was traveling abroad and didn’t want to put her things in storage.

My grocery budget remained tight, and I shopped a little but not much. I still lived without a car and would continue to rely on public transit for the next 5 years.

Overall my living expenses came in at less than $1,200 per month. It’s a minimal amount, but it felt like complete luxury after my years in extreme poverty as a student.

I started paying off my student loans during the grace period

In Canada, you don’t need to make student loan payments for the first 6 months after you graduate. I did anyway. I figured the balance was accumulating interest so I might as well hack away at it. Now, at least for Federal Student Loans, your grace period is both interest and payment free.

I didn’t pay much, maybe only $100 or $200 per month. But it was enough to start the habit of paying a monthly student loan bill. I remember I calculated and it only saved me about $20 in interest over 6 months, but simply seeing a lower debt balance was good for my mental health. I’m glad I made the effort to tackle my debt as soon as I could. I still make this one of my first recommendations for new graduates.

My personal rule was to double the minimum payment, then double it again

When my student loans did come due, each one had a minimum payment of about $100 per month. I decided to double the minimum payment, then double it again. I customized my repayment terms on both my provincial and federal student loans, setting them as high as $400 per month each.

I started consistently paying $800 per month towards my student loans. Occasionally, I threw an extra amount at it, even if it was small. I didn’t care if $25 felt like pennies towards $20,000. If I had that amount to spare, I transferred it to my student loans.

I used cash windfalls like my income tax refund to tackle the balance

Because I had paid my own way through school, I amassed a ton of tuition tax credits that had carried forward to after graduation. Now that I was making a good income, I could claim them when I filed my taxes.

The first year I filed my income taxes after I graduated, I got a big income tax refund. The same was true for the second year.

When I filed my taxes and received my income tax refund in February of each year, I allocated half to savings and put the other half on my student loans. It always lowered the balance by thousands of dollars. It felt like a belated Christmas gift.

In the end, I transferred my own savings to wipe out the final balance

Two years after I graduated from my Bachelor’s degree, I was ready to go back to school for my MBA. It was really important for me to start graduate school with no lingering debt from undergrad.

I cashed out that little mutual fund I had saved through school, used a GIC that had just matured, and took a bit from my Emergency Fund and made one final transfer to my student loans.

It was gone. I’d vanquished nearly $22,000 in only 22 months.

I have some regrets about my aggressive debt repayment journey

I am and will always be an advocate of a debt-free life, but hindsight is 20/20 and my aggressive pursuit of debt freedom is fraught with mistakes. I know why I did it. I was suffering from debt fatigue and wanted to move forward financially to my next degree. But it wasn’t totally the right choice.

In retrospect, I wish I had taken it a little bit easier on my student loans if only because I stressed about money for 6 years straight. I worried about my income and expenses for the entirety of my undergraduate degree and then continued to do so for 2 years after even though I had a great job.

If I could go back in time, I’d take an extra 6 months to pay off my student loans just to give my budget a little more breathing room.

Additionally, putting so much of my money towards debt repayment meant I had little in the way of savings. When I went back to school for my MBA, my income over the past 2 years was too high to qualify for new student loans to pay my tuition. But I also had little saved.

I scrambled to come up with the $10,000 I needed to pay my first year’s tuition bill and move cities. It was a financial headache. It could have been completely avoided by simply keep as little as $3,000 extra on hand.

Getting out of debt super fast was awesome, and it provided me a lot of financial freedom at a crucial point in my life. But a few extra months on my repayment timeline would have done no harm!