This post may contain affiliate links. Please read my Disclaimer and Terms & Conditions for more information.
Hi, I’m so glad you found this post! If you just started following along, this is Part 1 of a three part series of how my wife and I paid off over $100,000 of student loan debt by the time we turned 28. Feel free to start here if you want to start from the beginning.
Okay, let’s continue…
My wife, Ashley, and I both attended The University of Texas at Austin, where we earned our undergraduate degrees. Even though we attended the same college at the same time, we ended up owing drastically different amounts by the time we graduated.
I’ll do my best to break it down for you.
Ashley’s Student Loan Situation
My wife unfortunately had to take out a lot of private, unsubsidized student loans with high interest rates to pay for her college.
Like many Americans, she grew up middle class, which means her family made more than the income threshold to qualify for financial aid, but also didn’t make enough to pay for her college.
So, she originally took out $71,532 in student loans throughout her time at college. That amount could have been higher, but she saved a full semester of tuition and living expenses by earning her degree in 3.5 years instead of 4 years (good job, love!).
However, 96% of her student loans were unsubsidized and private, which means they started accruing interest from day one. In addition, her interest rates ranged from 2.66% to 12.49%.
All of this created a perfect storm, leaving her with $92,831 in debt by the time she graduated college!
Yes, you read that correctly…Her student loans grew $21,299, or 30%, while she was still attending college!
She worked a part-time job during school, but it wasn’t enough to even cover the interest due each month. For all of us visual folks, below is a chart showing the before and after student loan balance she owed.
No wonder we have a student debt crisis in this country!
And, as luck would have it, she graduated just two years after the Great Recession. Finding a job that paid enough to cover her minimum monthly student loan payments, in addition to housing, groceries and other necessities, was near impossible.
So, she did what every Millennial did – moved back in with her parents to cut costs and try to pay down debt.
Jordan’s Student Loan Situation
As for myself, I had a series of unfortunate and fortunate events growing up that resulted in me owing only $9,464 in student loans by the time I graduated college.
If you’ve read my About Me page, you know I grew up in poverty and my mom passed away from a brain tumor when I was 15 years old. As terrible as these times in my life were, they did have a benefit after I turned 18 and started applying for college.
Since my family made way less than the income threshold required to qualify for financial aid, I thankfully received a generous financial aid package from the federal government. To be specific, I received $47,597 in grants during the four years I attended college.
After my mom passed away, she left me and my older brother her home, which was in terrible shape and had a market value of around $25,000. My brother and I discussed options with our dad and finally decided to fix up the home and sell it. We grew up remodeling mobile homes and other buildings with my dad (who was the real handyman), so we knew what was required to flip the house.
It took us around two months, $3K in supplies and free labor to finish remodeling the home. It was a lot of work tearing out the stained carpet, sanding the hardwood floors, tearing down the garage, replacing the windows and repainting the entire house, but we finished it and were proud of how it turned out. We put a “for sale” sign in the front yard and sold it for $41,000 in less than a month!
Our work and investment earned us an extra $16,000 or 64%. After splitting it with my brother, that provided $20,500 that I put in my savings account. Luckily, the state held onto the money since I was a minor, so I couldn’t touch the funds until I turned 18.
Now onto the fortunate events…
I graduated as Valedictorian of my high school, which in Texas provides you with free college tuition at a public Texas college during your freshman year. This accomplishment saved me $8,100 my first year of college.
I also received a couple of academic scholarships, which I am tremendously thankful for. I still remember opening the scholarship letter I received from UT. I literally had to read it three times before I realized it wasn’t a joke.
I received a $20,000 academic scholarship from UT! All I had to do was maintain a cumulative 3.0 GPA and then UT would reimburse me $5,000 per year.
In addition, I received another academic scholarship from a local company in Fort Worth, TX for $1,000. In total, I received $21,000 in academic scholarships.
So, if we combine the $8,100 tuition waiver and the $21,000 in academic scholarships my total academic scholarships throughout college totaled $29,100.
I’m not one to rest on my laurels, so I also worked many part time jobs during college to help pay for my living expenses. I worked 15 to 20 hours per week at the recreation center on campus during my sophomore and junior years, 40 hours per week during a summer internship and 15 to 20 hours per week as an intern for another company during my senior year.
Combined, I earned $17,986 working part-time jobs during college!
Added together, my financial aid (grants) of $47,597, academic scholarships of $29,100, the $17,986 I earned while working throughout college and the $9,464 in student loans I borrowed paid for 100% of my college education and living expenses for four years.
Below is a pie chart breaking down how I paid for my four year college education, which cost a little over $100,000.
This leads me to my first tip for anyone that is planning to attend or is already in college.
“Focus, study hard, get good grades, apply for scholarships/grants and work at least part time during college. You’re older self will thank you.”
If you’re wondering what I did with the $20,500 inheritance, here’s the breakdown.
I spent ~$5K on braces and dental treatment during college. My teeth were in terrible shape since we never had medical or dental insurance growing up. I was so tired of being embarrassed about smiling when it came to being in photos. So, I made up for 18 years of non-treatment and had braces all four years during college.
I also spent a little over $3K on medical bills during college. I herniated a disc in my lower back and tore my A/C ligament in my right shoulder, which I had to pay for during college.
I used around $1K on laptop/equipment & another $2K on clothes/suits for college and work. I spent another $2K helping family out, which I consider “gifts.” The remainder went towards other expenses, such as new tires for my car, mechanical work, gas, moving expenses, food, etc.
Now that we got that out of the way, let’s move on!
Congratulations! Now Start Paying Your Debt…
Graduating college was one of mine and my wife’s greatest accomplishments. It’s such a fun and exciting time in millions of students’ lives. Our families and friends attend our graduation ceremony, throw us a party, and, if we’re lucky, get us gifts!
But, it’s also a stressful and difficult time in our lives. Soon after graduating, millions of us receive a letter from our student loan providers reminding us of the thousands we borrowed to attend college.
They say something like “Congratulations, Jordan! You worked hard to earn your college degree and you should be proud. As a reminder, you owe $XX,XXX in student loans. Your minimum monthly payments are $XXX.XX.”
Then, all of a sudden, you no longer feel like you’re on top of the world…
Our letters showed us that we owed a combined $102,295 in student loans and our minimum monthly payments were $941 per month!
Below is a little visual showing the damage…
Now you know how we ended up with $100K+ in student loans! Can you relate?
Want to be the first to know about my new posts? Sign-up for my newsletter below!
