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© THE STUDENT LOAN REVIEW 2020

An Illumint Project

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Washington, D.C.

  • Kevin Mahoney, CFP®

What Does Student Loan Repayment Success Look Like?

Repaying Student Loan Debt Can Be a Very Lonely Experience, but the Right Success Story Can Inspire Confidence and Hope


About the author: Kevin Mahoney, CFP® is a fee-only financial advisor in Washington, D.C. Kevin's work with his clients focuses on paying off student loans, buying a house, investing savings, and budgeting. Kevin is the founder & CEO of Illumint, a virtual financial planning firm specifically designed to help couples and young families with their financial decisions.

Caitlin Boston: $223,817 in Student Loan DebT


Boston, a 35-year-old tech industry employee who lives in New York, received a lot of attention this week when a YouTube video that she created to celebrate paying off her student loans went viral. Boston paid off $222,817.26 in student loan debt over the past 10 years, including more than $75,000 in interest.


Lila MacLellan tells Boston’s story in an article for Quartz:


“When she finished school and organized her loans, Boston discovered her monthly obligations totaled nearly $1,500 per month. This came as a shock. At the time, she was making close to minimum wage and was lacking guidance to help her deal with her loans.


Even as her wages slowly improved, she came to see that living frugally would not, on its own, allow her to pay down her six-figure debt. She penny-pinched too, of course, cycling to work instead of buying a metro card, as she told Buzzfeed, and living with five roommates to split the costs of rent, utilities, and meals, for most of the past decade.


When she reached the limits of cost-cutting, she chose to focus on the other side of the equation: her earning potential.”


MacLellan describes how pursuing a higher (fair) salary enabled Boston to put significantly more money toward her student loan debt:


“One year, around review time at one of her early jobs, she and a few colleagues were chatting about salaries when they decided to share what they earned. Boston learned that she and two other women of color were earning the same amount as another female colleague, a white woman who she says was hardworking but younger and less experienced. That was one problem. Then Boston asked a male peer who held the same title she did, and had the same amount of experience, to share the amount he was making. When he demurred, she asked if his income was over or under a six-figure amount. Within two questions, she knew his salary range, and the lowest end was still $20,000 more than her salary.


Women basically need to expect that they’re being underpaid compared to men in the same role, her video warns, and women of color can expect that gap to be wider than it is for white women. It’s your job, Boston advises in her captions, to find out what your colleagues make, ‘especially your male ones.’


The message continues: ‘It might make you feel uncomfortable but it’s the sole reason I started making an additional 41% a year.’”


Kiera Carter: $110,000 in Student Loan Debt


When Kiera Carter graduated from New York University at age 21, she had accumulated $110,000 in student loan debt and was beginning her career in a relatively low-paying industry, journalism. She decided she wanted to repay her student loans as aggressively as possible, despite some of the well-intentioned guidance she received:


“Friends and family tried their best to give advice: 'Defer!' 'Consolidate!' Refinance!' But those strategies, which are fine if you have an emergency or can score a lower interest rate, would have only prolonged my loans by years. 'Deferring payments is usually a mistake,' says Taunya Kennedy, a student-loan counselor at Money Management International, a nonprofit that provides financial education and guidance. 'In most cases, your interest will continue to accrue, which keeps increasing your balance.' For me, that was a hard pass.


I briefly looked into refinancing my private loans with a bank that would have lowered my monthly payment to around $600, but it also would have tacked on 10 more years of payments(and nearly $14,000 in extra interest) just so I could live more comfortably in the moment. Hard pass on that too.”


In addition to creating an aggressive repayment strategy for herself, Carter’s efforts involved maintaining a strict budget and minimizing her rent payments. She also made some smart decisions about her income:


“Less than a year after starting my journalism job, I realized I just didn’t have time to play the ‘ask for a raise and wait a year’ game, only to get a 3 percent bump that translated to an extra $40 a paycheck.

Instead, I learned something really valuable: You end up making more money when you switch jobs. This might not work in every industry, but I was able to double my salary in only three years simply by moving employers regularly.


Although some companies may look down on job-hopping, one survey shows that 55 percent of them won’t hold it against you. In fact, by jumping around, I took on a lot of responsibility at a young age, networked like crazy, and beefed up my résumé. And when, at 26, I landed at my fourth employer, I was comfortable enough with my salary that I stayed there for four years.”


Chadwick Matlin: $124,141 in Student Loan Debt


Several years ago, Matlin wrote for Matter (in a post with terrific charts and graphs related to his predicament) about the decisions he made that put him into debt and the tedious process he used to repay his student loans. As Matlin describes:


“My graduating debt was $116,499. For plenty of graduates—and for anybody whose debt payments finally come due—this is the moment of their epiphany. The allure of debt is in its abstraction. In its ideal use, it allows people to take chances they otherwise couldn’t; at its most nefarious, it shackles people to the memory of what they tried to pull off but couldn’t.


The amount of money my parents and I were loaned was actually higher than $116,499—$124,141, to be exact—but my parents had been making monthly payments for years, whittling thousands off. In the end, we had decided to take loans out for seven semesters—all but my semester abroad, which my parents paid for out of pocket. (Turns out, it was several thousand dollars cheaper than a semester at Tufts.) Encouraged by low interest rates until senior year’s 6.5 percent, my father decided to pile on the loans, nearly all under his name.”


Matlin didn’t lean on any one particular financial tactic to repay his student loans in a timely manner. Instead, a variety of thoughtful decisions and good fortune played a role:

  • His parents made the monthly payments until his job situation stabilized after college

  • He consolidated his loans to lock in a low interest rate

  • He lived with several roommates in sub-optimal housing to keep his rent low

  • He skimped on home furnishings, transportation, food, and entertainment

  • He applied all of his discretionary savings to his student loan payments

  • He hustled to secure extra freelance income

In the end, Matlin says this about his success:


“I made it work with a series of lucky breaks: an identity crisis, a motivation-at-all-costs father, a university that supported my ambition, a fellowship that was available only at the university, a company that promoted me, a job that gave me enough exposure that I was employable after I was laid off, a media industry that was increasingly reliant on freelancers, and a former boss who gave me shelter. That is the best domino effect I could have possibly hoped for. And what about the people without such smooth post-collegiate lives? I’m the outlier, the best-case scenario, the happy ending, and still I’m left without much in savings, since it all went to the accelerated repaying of the loans. My fellow debtors took the same risk I did, but it hasn’t worked out for all of them.”