Debt Unicorns: How These 4 People Paid Down Student Debt Really Fast

We researched some of the most inspiring debt pay down stories, we are feeling inspired already!

Mandy: $102,000 in 6 years

How much was paid off: $102,000
How long did it take: 6 years
Main strategies: Snowball method
Salary: $40,000

Mandy Velez paid down $102,000 in 6 years! She attended the University of Pittsburgh and graduated with $75,591 in debt. She then moved to New York City to pursue a career in journalism. On her first job fresh out of school Mandy earned $40,000 a year, which coupled with rent, and living expenses; was merely enough to keep up with her loan payments.
She calculated how much time it would take her to pay off her student debt if she made the $300 monthly minimum payment and came to a shocking realization: it would take her until 2046 to entirely pay off her student debt! At which point she would be 54 years old and would have accrued interest of $96,000!

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She was in disbelief and decided there must be another way to pay it off faster. She started researching and reading about ways to pay it off faster and discovered the Snowball Method. She focused on paying down the smallest loans first while meeting her minimum monthly payments on the bigger loans. Once she finished paying the smaller loans, she would use the freed-up cash to pay the next-bigger loans. This is the Snowball Method.
She really hustled her way in finding more ways to earn extra income, taking up side gigs such as dog walking, cat sitting, babysitting, among others. She also had to sacrifice on some activities outside of work and living in places that had long commutes.
It was definitely not easy, but she managed to make an average monthly payment of $1166 for five years!
When she had about $32,000 left on her balance she told herself she was done with student debt and decided to pay down the remaining balance as aggressively as she could. As a result, she paid down $32,000 in 8 months. In the end, she paid a grand total of $102,170, including around $27,000 in interest on top of her $75,000 balance.
When Mandy was done with her student debt, she decided to throw a funeral for her $102k loan balance.

MaotheMao21: $26,000 in 18 months

How much was paid off: $26,000
How long did it take: 18 months
Main strategies: Avalanche method
Salary: $50,000

Reddit user MaotheMao21 was able to pay down $26,000 of student debt in 18 months! She took out six federal loans and one private loan from Sallie Mae with a 9% floating interest rate! This student prioritized and decided to live frugally while in school and in repayment in order to pay down debt faster.
She used the avalanche method where she tackled the loan with the biggest interest rate first using the entire paycheck she got from her on-campus job, in which she earned $10.50 an hour. During her last semester of school, she found a full-time job and worked 40 hours a week while taking 18 credits! With her job, she was able to make $50,000 a year before taxes and allocate those paychecks to paying down the rest of the debt, while still contributing 10% to her 401(k). She cut back on living expenses to less than $800 per month, shared room, limited groceries to $150, and took public transportation which her company reimbursed.
She explains how she hadn’t bought clothes or gotten a haircut in three years, taken any trips or taking part in anything else that would increase her expenses. While for some this may sound extreme, she was locked-in with her eyes in the prize: paying off debt in less than 2 years.

She took a weighted risk of not saving for an emergency fund, but luckily nothing major happened during this time - but in the end, it was worth paying down student debt and fixing her finances in such a short time after graduating.

Chela: $70,000 in 18 months

How much was paid off: $70,000 in student debt and car payments
How long did it take: 18 months
Main strategies: Snowball method
Salary: Not disclosed

Chela shared her debt paydown story with Buzzfeed back in December. This case is different because it comes from a couple who have joint-finances. They start organizing their debts from smallest to biggest in order to pay them off using the snowball method. The snowball method works by focusing on paying down completely the smallest debt (while still making minimum payments on the other debts) and once the smallest loan has been paid off reroute the freed-up cash to the next smallest loan.
They managed to pay it off in two years by making some sacrifices such as cutting out shopping and couponing for everything. They credit being dual-income as one of their biggest benefits, as well as not having any children. They did not have any help from family members and Chela, the wife and author of the post, says she started a side-hustle to generate extra income. They allocated a certain amount of cash weekly to certain things and everything else went towards the debt. She claims using cash was challenging but it also allowed them to control their spending.
She recalls quality of life was still fine, it was just a collection of small sacrifices that in the end added up. But they ate, slept well and still went on their occasional date nights, and in the end, it all worked out for them.

nskk12: $38,000

How much was paid off: $38,000
How long did it take: 12 months
Main strategies: Avalanche method
Salary: $50,000 fresh out of college → $86,000 by year’s end

This Reddit user’s story is quite interesting and inspirational. When he arrived in the US as an immigrant on an F1 student visa he came with $3,000 in his pockets from his parents. After that, he stopped receiving parental support. He got partial scholarships during his bachelors and tutored other students on-campus and off-campus mathematics and programming to make extra money. He worked 75-95 hours/week during the summer to save up for college and shared a studio apartment with four other immigrant students. During his senior year, he got married and applied for a green card which allowed him to apply for FAFSA. He used it to take out a loan in order to support his family (they had one kid by then) and pay off his spouse’s loan which at that point had already begun to accrue interest. He received graduate research assistantship from the US Department of Energy that fully paid for his tuition and paid him a monthly stipend of $2000/month.

He was able to pay off $30,850 of student debt in one year. He graduated in 2016 with a Bachelor and Masters in Engineering and had originally borrowed $25,500 ($5,500 for undergraduate, and $20,000 for graduate). He started 2019 with a balance of $27,121 with $4 of interest being added into his account every day. His initial salary right after graduation was $50,000 and later saw a bump to $86,000 by year’s end.

He used the Avalanche method where he focused on making the minimum payment on all of his debts and then using any remaining cash to pay the highest interest debts. Using a zero-sum budget he was able to put any remaining money after necessities towards his debt. He recalls how important it was to distinguish wants from needs and to only spend money when absolutely necessary.

In Closing

There isn’t one path to pay off student debt. You don’t have to be confined by paying off the suggested monthly payment. As you can see by these stories, both the Snowball and Avalanche method work, as long as you can stick to it and stay motivated! Some people were more frugal and spent less, some took on side hustles. You have to do what works for you, and hopefully, these ideas helped you see new ways of paying it off.

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