How I Paid Off Over $20,000 in Student Loans in Three and a Half Years

Laura Shin

In our “Money Mic” series, we hand over the podium to someone with a strong opinion on a financial topic. These are their views, not ours, but we welcome your responses. Today, Senior Editor Laura Shin tells us how she got her student loans and credit cards paid off, and how it felt.

In May of 2008, I graduated from journalism school with a master of arts, new friends from around the world … and a decade’s worth of student loan debt.

I was lucky in that my student loan was, due to a hefty scholarship, “just” $20,500. I was lucky in that my parents paid for my much more expensive undergraduate education and that they paid my living expenses while I was in grad school. I was lucky in many ways, but in one way I was deeply unlucky: I had somehow managed to reach my mid-30s without having a clue how to manage my finances.

My journey to the final loan payment I made in February was filled with so much fear, shame and, above all, anxiety, that when my colleagues at LearnVest suggested I write this piece, I didn’t want to.

I didn’t want the world to know that I’d spent the first two years of the loan payments in a fog of confusion about how to get rid of this debt, or that I’d racked up almost $8,000 in credit card debt, and I had to pay that off too, or that the way I got rid of the debt was by freakishly and obsessively tracking how I spent every dollar. I didn’t want to reveal these things to future editors or to people in the well-to-do, achievement-oriented communities in which I grew up.

But given how many ways I went wrong on my way to becoming debt-free, I thought my own tale of “how I did it”—that is, paid off more than $20,000 in student loan debt within three-and-a-half years—could help LearnVesters and the 37 million Americans with student loan debt get there too.

RELATED: Debt 101 – Getting Credit Cards Paid Off

How I Made a Mess of My Finances

My predicament had nothing to do with bad parenting: My sister, who was raised by the same people, has always handled money well. Purely because of my here-and-now personality, until about two years ago, my basic philosophy toward money was, “Have it, spend it.” I also had no concept of a separation between “I want that” and “I’ll get that.”

As recently as April 2010, I didn’t have a savings account. When I was in college, I remember that my bank told me to get a savings and a checking account, but I never fully understood why savings even existed since, if you actually wanted to use the money, you needed to take it from checking. So when I got my first job in New York, I opened only a checking account and put “all” my money in there. I put “all” in quotes because I lived paycheck to paycheck, not thinking there might be a time when money wouldn’t come every two weeks.

As recently as April 2010, I didn’t have a savings account.

So in spring 2010, two years after graduating, I had a good job and made good money for a writer, but I was digging myself a credit card hole that would, by September, reach $7,500. (The culprits: Gilt Groupe and New York City boutique shopping, a three-week trip to India, constant dinners and drinks out with friends, my book addiction and God knows what else.)

RELATED: No Need for Paid-Off Credit Cards – Bad Money Lessons From My Parents

See why I hesitated to tell you—and the world—what a money mess I was? But if someone as far gone as I was can pull her finances together, then so can you.

When Things Started to Turn Around

In April 2010, when I was $6,500 in credit card debt and $18,432 in student loan debt, I read an article in The New York Times about female-focused personal finance sites. (That was how I got hooked on LearnVest, long before I worked here.) In September, after my trip to India, I took a personal finance workshop, where I learned about this fabulous tool. It was called a budget.

It worked just like the LearnVest Budgeting Tool. You take your monthly income, subtract your monthly expenses such as rent, utilities, etc. Then you do this magical thing: You put some money in savings and keep it there to watch it grow. Next, you make a payment toward your debt or, in my case, payments since I had the student loan and credit cards. As for the rest? That’s what you live on.

I figured out that, depending on how fast I wanted to pay my loan and amass savings, I had to live on between $190 and $240 per week. In cash.

Planning My Spending

I immediately stopped all credit card spending except for items I could only buy online. I unsubscribed from Gilt. I stopped getting drinks almost every night. I stopped buying every single thing that looked good at the grocery and the farmers’ market (I love to cook) and instead started planning out my meals so I only bought what I needed for that week. I even started looking up restaurant menus online and choosing my meal before going out so I knew how much I would spend.

The Student Loan Crisis Infographic

Check out our infographic to learn more about the student loan crisis.

In essence, I started “planning” all my spending.

This is how it worked: I took out the amount I had to spend that week from the ATM, and if I had to buy something with my credit card online, I immediately returned that same amount in cash back to my checking account. I started a Google spreadsheet that tracked every single dollar I spent so if I spent over my limit one week, I knew how much less to spend the next. Similarly, if I underspent one week, then the following week, I knew my how much bigger my budget was.

The sheet also tracked money I hadn’t even spent yet: As soon as I made plans for the next week or the next month, I would mark on that future day a dollar estimate of how much that activity might cost, i.e. “Birthday dinner, $50,” so that when I got to that week, I already knew I had that much less for other spending. It also kept me, when the night finally arrived, from being tempted to have another drink I hadn’t planned on.

RELATED: How I Paid Off Credit Card Debt in 5 Steps

How My Financial Picture—and Life—Started to Change

Not everyone in debt may need to be as obsessive as I was, but since I was trying to undo more than a decade-long habit of buying myself whatever I wanted whenever I wanted, I needed to be hyper-vigilant.

I am not going to lie: Living on this budget had an impact on my social life. But I had fallen in with an international crowd at grad school, so coincidentally, at the same time I was trying to go out less, the last of my grad school friends moved back to their home countries, so my social life naturally became less active.

I had already made some balance transfers so my credit card debt was no longer accruing interest, but for one card, the 0% period was going to end in January 2011, and I didn’t think I would be able to pay it off by then. I was getting heart palpitations just thinking about interest growing on my already sizable debt.

That Christmas, I got a gift from my parents—several thousand dollars they said I should put toward my student loan debt. I’m sorry, Mom and Dad, but the truth is, I used it to help pay off that credit card. (As I type this, tears actually spring up because it really hurts me to tell the world that I lied to them.)

RELATED: Getting Credit Cards Paid Off? Top Mistakes to Avoid

But thanks to that gift and the five months I had spent being really diligent about my budget, by February 2011, I was free of my credit card debt. I had even saved enough money to take a trip to Mexico with 15 of my grad school friends.

Finally Paying It Off

I began to use plastic again, but I stuck to my weekly budget—and I ramped up the student loan payments. By this point, my student loan debt was just over $15,000.

You’re Not Alone

Want to talk to other readers trying to pay off their loans? Head to the Student Loan Debt conversation in LV Discussions. SHARE

Around the same time, I got a new job—at LearnVest—and increased my freelance income with a new regular writing gig. (Increasing your income, whether through a raise or side income, is an under-sung way of helping pay down debt.)

I also started learning more about personal finance, and realizing, not only did I need to pay off my debt, I needed to build an emergency fund. A CFP I worked with counseled me not to worry about my student loan since the interest rate was a “low” 6.8%. She suggested I stop the loan payments, build my emergency cushion, then pay the loan off.

I tried and watched with pride as my emergency fund grew. But I felt dismay every time I looked at the student loan balance. Before meeting with her, the debt had fallen below $10,000, but by the time winter arrived, the interest, which accrued every day, pushed it above $10,000. Again.

Over Christmas, I made a decision: When I got my bonus in late January, I immediately sent a payment in the same amount to the lender. Then I took a massive amount out of my savings account, essentially decimating my emergency fund. The February day it hit my checking account, I quietly logged onto the student loan website while at work and made my final payment.

But I’d been so traumatized by the experience of seeing the interest increase my debt on a daily basis, I still didn’t quite believe my saga was over. It wasn’t until a full month passed and I received a paper letter from the lender showing that I owed nothing, that I finally—finally—breathed a full sigh of relief.

Why are experts calling the current student loan situation an “Impending economic crisis”? In our infographic, we take a closer look at the numbers. See where you fit in.

Editor’s Note, April 17, 2012: Since publishing this story, a number of you have commented on the gift my parents gave me, and many of you implied that they paid off my debt. While I appreciate everything my parents have ever given me, from that gift all the way down to love, I would like to emphasize that their gift was a small fraction of my debt. If I hadn’t received that gift, I still would have paid off the debt, just a few months later.

What really enabled me to pay my loans off was 1. learning to live beneath my means, 2. getting a budget, 3. sticking to that budget day in and day out, and 4. earning more. But even without earning more, I still would have paid off the loans, just a bit later than I did. If I hadn’t started living below my means, my parents’ gift would have done nothing to get me out of debt and I would still be in it today. If you’re in debt and are looking at how you can get out of it, the key for you, as it was for me, will be to live below your means, get a budget and stick to your budget–and if you can find extra work, to earn more. 

More From LearnVest

Why would some community college courses cost more than others? Find out.
Learn the ins and outs of saving for college with our guide.
Student loan debt getting you down? Our free bootcamp might help you out.


  • Frances M Jenkins

    I don’t think people should get so hung up on the gift from her parents. It might actually help to realize that we DO get extra “gifts” of money sometimes and we should apply it to our debt. Anyone get tax refunds? The main idea is to throw everything you can at it. Not look for handouts.

  • Jjshope3

    I am 60 years old and have $21000 in student loans.  I was divorced at 50 and had to go back to school as I had been at home rasiing my children for 15 years and had no marketable skills.  I will finally get my loan paid off (I hope) by the time I am 72 years old – that is if my health will allow me to continue to work.  I have no pension, or retirement plan.  All I will have to live on after I stop working will be my social security (expected to be about $1020 a month).  I feel helpless and trapped.  If I didn’t have this student loan I could be putting away the money I use to pay off the loan every month and at least have something.  Any help you can offer me?  Is it possible to get the student loan “excused” or waived due to my age?

  • Guest

    Anybody who includes the words “my parents paid” as part of their getting out of debt story shouldn’t be writing articles about how to get out of debt. If everyone’s parents were able/willing to pay off our debts, the world would be debt-free! Write something for those of us who want to be financially independent…independently.

  • Michelle

    Great article…but I was completely thrown off by the “my parent’s gave me several thousand dollars” that would never happen to me so from them on this article was totally unrelatable.

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    Paying off 20,000 in three and a half years is not that hard of a thing to do. Honestly I can’t think of anyone with an education who couldn’t do that. I have a way heftier amount of student loan debt and have paid more than $20,000 on mine this year alone, by paying 4 times my minimum payment. If you’re really willing to make sacrifices you can kick pretty much any amount of debt in the butt, and pretty quickly (you can find cheap but shitty housing in a safe area, you can pack your lunch every day, you can give up going out to eat, you can work three jobs). I pay $2,500 a month on my loans. They will be gone in a year and a half and I am thankful for them because they have taught me how to be creative and tough. I do not have a high paying job. I just work three of them.

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    One of the problems with the world today is the lack of compassion, enthusiasm and “way to go you!” from those who .. if they can’t have what YOU have .. tend to complain about their situation instead of figuring out a way to conquer it (like you did). Sheesh. So your parents didn’t give you a check to ‘help’, so you don’t have $200/wk to help, so you don’t make $50k .. SO WHAT? The difference between this writer and YOU is that SHE DID WHAT SHE NEEDED TO DO .. you just complain and make excuses as to why you CAN’T. So shut up if you’re not going to be a positive voice on this thread .. geez. We all have problems, debt, issues .. move forward on them or you’ll stay right where you are .. in Complain City.

    • Emmes

      Stop trying to make her feel guilty for something YOU WON’T do .. not can’t. Do it or stop complaining about why you have debt.

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    Wow, you must be so proud of yourself. You paid a debt for all of the materialistic things that your heart desired. With the help of gifts from you parents and the sense to STOP being a greedy american. You are the exact reason that our society is going where it is going. Kids these days have NO sense of responsibility and the baby boomers in this country never thought twice about raising their children, spoiling them with everything they ever wanted. I pity you. There is more to life than MONEY. There is more to life than being socially accepted by your piers. Try researching what money really is, or what those digits on your bank acccount and credit cards really mean. How are they created? You have no clue do you. What if every American gave a crap about what is going on in this world rather than what they will buy next? What if the people stopped supporting this corrupt system of FIAT currency? Try opening your eyes to bigger things than GREEED!! I’m sure many would like to go to India or Mexico but have never and WILL never be able to.

  • joanne

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  • Logan

    Some of us pay 100% of our living expenses, undergrad degrees, and graduate school degrees. Some work full time through school as well. It would be nice to see an article written by someone with a harder experience but it was a good article.

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