How We Beat $90K in Student Loans Without Consolidating
In 2022, we were staring down nearly $90,000 in student loan debt. Here was the breakdown:
$4,455
$11,527
$8,500
$14,468
$23,321
$8,999
$17,446 (outstanding interest)
At the time, we were 6 years into the government’s Public Service Loan Forgiveness (PSLF) program and hoping the program would pay all of that off at the 10 year mark. But after acknowledging the program’s success rate (2%) and having honest conversations, we decided to take it into our own hands and follow Dave Ramsey’s Baby Steps. We used his recommended debt snowball method from Baby Step 2. And it worked. Here’s we did it:
Lined up the 7 amounts from smallest to largest (ignoring the interest rates)
Paused retirement contributions to free up more income (several hundred dollars) - this was hard to swallow, but worth it to focus all our income on this one goal
Found every dollar available outside of retirement accounts (e.g., selling employer-sponsored stock)
Knocked out the smallest amount first ($4,455)
Then knocked each one out, one by one, with everything we could throw at it
And we did it in less than a year. Each debt we paid off felt like a win. We celebrated every time, too. The momentum was powerful.
What we didn’t do was debt consolidation. It actually didn’t occur to me at the time to even go that direction because I somehow knew it would be much harder to stay motivated with such a large amount.
This analogy represents that daunting feeling pretty well: Picture being in a forest, surrounded by several fires, each one representing a loan. You are running around trying to tame each fire. You then ask yourself “wouldn’t it be easier if we just had one big fire instead?”
That’s what debt consolidation does. Had we decided to do that, we would have had one massive fire to put out. It sounds nice to track just one debt vs. many with a lower monthly payment, but we’d still have a fire—a much bigger one that would keep burning hotter and longer. We would haven’t felt the wins that come with the debt snowball method.
Our goal was to get out of the debt. Now, we’re living debt free (except for our mortgage) and on the path to building lasting wealth. It’s a great feeling—I recommend it.
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