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My One Year Student Loan Payoff Update

  January 28, 2022 marked my one year anniversary of paying off my student loans . Reflecting back on choosing to pay off my student loans leaves me with several take a ways that I want to share with you! In September 2020 I decided to become debt free by utilizing the debt snowball method to pay off all my debt. Before this I had struggled to save and really understand basic financial principles. As a first-generation college student, I received a scholarship to attend undergrad for free, but the scholarship did not cover summers. During the summers I took out student loans to cover costs without paying interest rates or how much I was taking out. By the end of undergrad I had amassed a little under $17K. Fast forward to graduate school I received another scholarship that covered my education. At the time I was a teacher in a new very expensive city and I had missed the cutoff to have my paycheck last me throughout the summer. So, I decided to take out a loan for two summers to keep

Should I Pay My Student Loans?

 

This past week an article came out stating that student loan forgiveness was not in President’s Biden annual budget. I know many of us were like say what now? A few months ago, I did a video on student loan forgiveness as around that time Biden had given the Department of Education’s secretary a task to write a memo regarding if he could cancel student loan debt through executive order. There have not been any updates on that memo and this latest article that student loan forgiveness is not in Biden’s annual budget has somewhat put the writing on the wall that this may not happen after all.



Figure 1: This is a thumbnail from my latest YouTube video on Should I Pay My Student Loans? I have an inquisitive look on my face next to a photo of Biden.

 

I have a student loan balance myself and $10K would basically forgive my debt with a little left over. However, I am unsure if this will happen so I have decided to pay up until I hear otherwise. I actually paid off my second student loan last week and it felt great! In case you did not know, there is a federal hold on student loan interest, which means that whatever you pay will go to the principal balance. This will most likely help you to pay down your loan much quicker. This will end on October 1, 2021.



Figure 2: This is a photo of a green arrow with dollar signs along the arrow as a model for rising interest.


I know my opinion of paying your student loans until Biden makes a decision is unpopular however; the hold on student loan interest is something that needs to be taken advantage of. Also, if your loans are over 10K you are going to have to pay something eventually so what are you waiting for? I know there have been talks on 50K but I’m not even going to go there. I am definitely a person of hope and faith but faith without work is DEAD! So in the meantime I’m choosing to do the work.


Figure 3: This is a photo that says “Do the Work” written in a journal. 


Student loan debt can stop you from reaching your financial dreams and one day you will have to pay. As someone who is currently enrolled in a doctoral program with previous student loan debt another key to not going deeper into debt is to make a decision to not take on any more student loans. I currently work at a university so I receive an employee scholarship and other grant money. Anything left over after these two items are paid out I pay in cash. As I am writing this I just received a $500 grant towards my summer classes. I do understand that finding free money is hard but it is out there so don’t give up.


Figure 4: This is a photo of a $100 bill.


 Also, I would strongly advise against taking out any student loans in hopes that they will be forgiven this is not a good idea! If you’re wondering how I paid off TWO student loans since March I’ve been using the debt snowball method which has changed my finances for the better. Drop down in the comments and let me know if you want to hear more about the debt snowball method. Do you plan on paying your student loans? Why or why not? Be sure to check out my latest video on the subject below!

 

Figure 5: This is a photo of a snowball surrounded by money.


 

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