How to pay down $18,000 in student loan debt in 18 months

I hear often that a college degree now is like what a high school diploma was years ago. It might be a saying, but it is the hard truth these days. 

In 1970, 2.9 Million people graduated from high school in the US. 

In 2017, 2.9 Million people graduated with a bachelor’s degree or higher. 

Of course you could argue that populations have grown, and the percentages are different, but a person is a person and they still count as one. It only takes one person to fill a roll in a job that you were well qualified for. Arguments aside, the numbers are unbelievable, especially the number of students graduating with student loan debt. You might have already heard the staggering statistic of the amount of student loan debt being $1.45 Trillion, but what is even more crazy is that it’s $620 Billion more than the total US credit card debt! Even more scary is that the average graduate will have over $37,000 in student loan debt the day they graduate. 

How to pay down $18,000 in student loan debt in 18 months

This isn’t your parents high school diploma

If we take those two stat categories and we combine them, it would be like our parents who graduated high school in the seventies, graduated with over $30,000 in debt. Or we are now graduating our version of “High School” in a mud pit of student loans. 

I’m not here to bash the system or get a petition for change. It is what it is. You can try to fight the 800 pound gorilla or take one bite at a time and get it knocked out as fast as you can. 

I’m here to tell you our story of how we knocked out our $18,000 in student loan debt in 18 months living off of a $30,000 a year salary. It’s not rocket science, but if you try to “wing it” you’ll be paying longer and more than you should. 

Snow Ball Method

I’m not an advocate for Dave Ramsey and nor am I paid by him, but my wife and I took his course “Financial Peace University” and received 10 times the value of the price of the course. If you have never taken a class that dives into all aspects of your personal finance, please take this course. 

One of the topics Dave covered was the “Snowball Method.” If you are an engineer and want to figure out the math on why this works, you are spinning your wheels, because the math doesn’t make sense. What does makes sense is the fact that it works. Here is how.

Most of the time you have multiple loans and you might even have other loans besides your student loans i.e. car payments, medical bills, or credit card debts. Conventional thinking might make you want to start attacking the largest loan first because it will take the longest and it will take the most money. In the snowball method you do the opposite. 

You pay the minimum monthly payments on the loans that are the largest and you put all your extra money towards the smallest loans. I’ll take our situation as an example. 

We had 3 accounts with student loans:

  • $6,000 at 6% 
  • $9,000 at 4.5%
  • $3,000 at 6%

We took Ramsey’s advice and started paying the minimums on the the $6,000 and the $9,000 and put all the extra money that we were able to into the $3,000 account. This allowed us to pay off that $3,000 account within 4 Months! 

The moment we clicked on the “final payment” button, we received one of the best feelings we had since we got accepted into college. This started the “Snowball effect” in our minds. Now we could use the full amount that we were paying on that $3,000 and put it towards the $6,000 account, then the $9,000.

Mathematically this might not make a ton of sense, but the mindset we were in once we saw we were knocking down that 800 pound gorilla faster than we thought we could, was better than any mathematical sense. We were thinking of all types of other ways to pay down the other two accounts faster. We wanted that feeling again and seeing our accounts being drained at a decent pace is super encouraging!

You could stick with the other way and go after the larger account first or the one with the highest interest rate first and that will work, but the burden on your back will never feel lighter. This method and plan allows us to feel lighter and it allowed us to pay off our debts in a third of the time that we were projected to. 


Get Married

By no means should you ever dive into the life long commitment of marriage for any thought of money. So, let’s clear the air here. What I mean by saying “Get married” is that if you are currently married you have a massive advantage on your debts than you do if you aren’t. This also goes for all my “we just want to live together for 10 years and see if we like each other first” friends. If paying down your debt faster wasn’t a good enough excuse to break the camel’s back and finally pull the trigger with your life-long roommate – sorry girl, he’s not the one. 

Marriage actually added debt to my story. I was super lucky to have my college paid for by scholarships and my parents. My wife wasn’t so lucky. She had a good amount paid for, but as you can see from the title of this post, we still had a chunk to pay down. When we got married, her debt became mine and we bared it together. 

Money in marriage is never an easy thing. It’s one of the biggest argument starters and it’s not because of the lack of the money, it’s in how we use it. But, marriage and money can be an awesome relationship. Case in point is the ability to pay down debt. There are so many ways to save money when two people are bringing in income and you are able to share in all the expenses. 

In our situation, when we first got married we were only living on one source of income in my job, while my wife looked for a job. This taught us how to budget and live on one $30,000 salary. Once she started her job, while we never quite were able to use all of her salary towards our debt and expenses, but we were able to use a lot of it. 

One Salary

If you were serious about knocking out the 800 pound gorilla that is your student loans, this is what worked for me. If you were able to live off of one spouse’s income and use the rest to pay down the loans, you would be knocking it out in no time. Yes, this means changing living expectations and sacrifices a lot of your “wants,” but if you wanted to do it, this is how