9 Vital Ways To Repay $200,000 In Student Loans

9 Vital Ways To Repay $200,000 In Student Loans

Want to know how to find thousands of dollars to pay off student loans?  Free money abounds!  Yes, you heard me: it’s amazing how much you can repay – or reduce – your own debts with simple habits and these key tactics.

student loans paidHow do I know?  I did it.  I graduated with a high-price degree…and a mortgage on it.  But within a few years, I was easing towards freedom, and just under five years, I was debt-free.  Before it was over, I had saved $15,000-$20,000 with a few simple strategies.

Here are the keys – and anyone can replicate these strategies:

  1. First, make a goal, and keep it reasonable.  Start small.  Don’t look at the whole figure.  Look at the pieces.  I’m not paying $180,000, or even that loan of $35,000, even though it’s at 9% right now.  No, I paid $1,000.  Over and over again.  You can too.  If $1,000 is too high, aim for $100; the point is to find a reachable goal.  Then keep reaching it: soon, you’ve built a habit and a confidence.  (Pro tip: focus on the interest, and knock off one cent per day of interest.  You’ll see the power of compounding very quickly.  $0.01 is a latte per year, for life.  $0.05 is practically a steak dinner.)  Dave Ramsey recommends you pay the smallest loan first – there’s power in a real win – and maybe that’s the way to go.

  2. Measure your decisions – and your purchases – against that goal.  Do I really want a coffee today, or do I want to quit buying some banker somewhere a coffee every year for the rest of my life?  Do I want to eat out today, or do I want to quit buying that a steak dinner per year for some banker every year?
  3. Measure the goalpost.  Learn how much you owe.  (But only do this after you set a measurable goal: otherwise, it can be a downer.)  The U.S. Department of Education has a website that should list all of your loans.  Make a spreadsheet.  I used this free one, and I highly recommend it.  Plug in your debts – whatever they are – and then you can use that calculator to rearrange the order, see how quickly extra payments help, and see exactly how many months or years it will take now.  Then focus on shaving that down, slowly.
  4. Be.  Intense.  This is a war.  You’ll lose some battles.  But keep returning to the battle.  Keep your goal posted nearby – I kept mine in my office, tucked away where I only I would see it on the wall, but I would see it daily.  Every little victory is a lasting victory.
  5. Keep living like a student.  This, more than anything else, moves you towards the goal.  Avoid any lifestyle inflation.  Instead, try to downsize things.  Eventually, I left the fancy apartments my professional friends were all renting and instead rented a room in a tiny house with a roommate…and then found out I was renting a southbound room in a northbound house.  Was it ideal?  No, but it was fun, it was strange, and now it makes for great stories – and even greater memories.  And it’s amazing how much you can save when your rent is under $400/month in a major metropolis.
  6. Know what you owe.  Learn your loan terms.  Find those old starting documents and look at them if you have them.  Each loan has different terms, and some may have surprising benefits.  If there’s interest, I’ll post more on this later: you can really save money here.
  7. Refuse the offers: your lenders will ask if you would like to extend that term out another 20 years.  Or 30.  That’ll make them thousands more dollars.  If you can make your payments now, especially on high-rate loans, refuse the offers.  Also, be aware: there may be traps.  The refinanced loans (even at the same lender!) may have new terms, with fewer benefits.
  8. Be nice.  Understand that your lender never answers the phone: someone that company hired out at another company is likely to answer, and the person on the phone has no power over whether you wait for 30 minutes on hold or whether you get a rate reduction.  So kill them with kindness, as the saying goes, because anger – which we’ve all felt – only guarantees he or she won’t go the extra mile for you.  Being friendly, however, may net you more than you can imagine.  More than one lender seemed to like me and simply offered up ideas and programs for how to save money: score!
  9. Be persistent.  The calls and calls and calls to lenders can pay off.  But it’ll probably be slow.  Do it as you have time.  But eventually, it’s easier.  And faster.  You know what questions to ask – you’ve learned.  You know how the company works – you’ve worked with them before.

  10. Ask, ask, ask.  And ask again.  You may find all kinds of savings – and money taken off of your loans – if you just ask for it.  Ask your lenders in particular.  Do you give any interest rate reductions?  You’ll give me a 0.25% reduction on a 9% loan of $35,000?  Then sure, sign me up.  Is there any other way to reduce my rate?  How do I trigger those final loan payment benefits?  Will you give me that rate reduction after 24 payments if I make the 24 payments ahead of time – this month, for instance?  (Pro tip: try this again every single time a loan switches servicing companies; each company may give you different benefits.)  Ask, ask, ask.  Sometimes I would randomly call up a loan company and see if they had any ideas, programs, or benefits they were offering: and once in a while, it worked.  It only needed to work once to make it worthwhile.  What’s to lose?  There are literally thousands of dollars to gain.

These tips should help those with high debt, especially at the beginning.  You may not be able to obtain $1,000, or $100, or $10 then – I started out as a low-level government employee – but even the small changes in interest rates and benefits will save you tons in the long term.  So focus on it.

What about you: how are you saving money on your loans?  Any other key ways?

16 thoughts on “9 Vital Ways To Repay $200,000 In Student Loans

  1. Thank you, and likewise.
    Yes, it’s all part of a new principle I’m learning: *I* manage *my* big expenses, and it’s especially true of debt, where the lender has the leverage. If it’s a big cost, I need to follow up on it at least occasionally to ensure I’m not being overcharged, double-charged, or missing a discount. (More on that when we get to insurance, in fact.)

  2. Great post. Love the ” this is war” idea. And make a goal.

    It wasn’t until I really started to focus on my actual mortgage balance that it started going away. Before that I was just paying that monthly bill.

    1. Thank you! We recently had this realization regarding savings. I don’t know why it took so many years for me to think about savings the same way we thought about the student loan. I suppose the freedom connection is more direct when it comes to eliminating debt, but it’s just as applicable to savings, so now we’re focusing on that, too.

  3. It’s always great to see posts from kindred spirits. It really is a war! A fight on behalf of your totally emancipated future self. That is what keeps me motivated … the great freedom my future self will enjoy. Looking forward to your posts.

  4. I particularly like number 10 – ask, ask, ask. It’s always good to ask and find out ways you can save more on loans, whether it’s refinancing or through some other strategy, there’s no way to know the best way to pay off loans without asking many questions. This whole list is a great resource for anyone with loans!

    1. Thank you! Yes, I could have expounded upon that more, with a whole story of its own, but we were already running long. Instead, I’m planning another post to share that story…short version is: it saved me a TON.

  5. Great job paying off the loans. I’m over halfway done with my $200k+ loans, so it’s always encouraging to see that it can be done.

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