PART 2: MY BIGGEST STUDENT LOAN MISTAKES: AFTER THE DEBT


After graduation, the damage was done.


I went to expensive schools, graduated, and now there was nothing I could do about the debt I had incurred.


Between undergrad ($30,000) and PA School ($150,000), I had acquired around $180,000 in debt.


There was nothing else left to do but to pay it off, just like everyone else in the entire United States, right?


So I thought.


What had not occurred to me at that point was there was a different way, a better way, a superior way that required strategy, some sacrifice, and doing the opposite of what everyone else was doing with their student loans.


First, let me tell you about everything I did wrong so that if you have a chance to avoid any of these you can save beaucoup bucks.


My Top 4 Avoidable Student Loan Mistakes


The following massive mistakes cost me 10s of thousands of dollars in interest in addition to the $180 K.


This is a cautionary tale of what not to do when it comes to student loan payoff, and what to do instead.


Mistake # 1

Lowering my Student loan Payment


Picture it: It was 2007, Justin Timberlake's solo album just released, and 'I'm bringing sexy back" is dominating the radio waves.



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In my infinite new grad naivete, like most people I believed that the next thing to do after graduation was get to making money ASAP so that I could finally put an end to living like a student.


I wasn't looking for lavish. I just wanted regular. To be free of annoying roommates & get my own apartment, a better car than my 2001 Saturn SL1 whom I affectionately referred to as "my little Tupperware on wheels", and just enough money to not have to worry about paying my bills or what I order on the menu.


I had worked my entire life up to that point being good. Going to school, having side jobs, struggling to balance it all, and gosh darn it, the time had finally come for me to live a better life and not have to worry about the basics. At the same time, I aimed to be prudent, not wasteful with the new monetary resources of my first job as a PA in cardiothoracic surgery.


Sound familiar?


In 2007, $80,000/year seemed like a fortune.

My rent at the time was < $900 per month. I bought a used car cash for $5k from a great friend who let me make payments, which I was paying monthly. The rest of my expenses were very reasonable, except for my student loans.


Unconsolidated, my student loan payments were more than my rent. Plus, out of the $180 K, there was about 20 something K out of that in private loans that were at about 9-10% interest. These could not be consolidated.


After a few months of paying the monthly student loan payment assigned to me by Sallie Mae, & barely having any money left for anything but expenses, the burden of the loans became too much.


By the way, if you didn't already know the payment amount they give you is meant in all ways to benefit them, make them the most money out of you by keeping you paying longer and having more and more interest accrue. I didn't know that at the time.


So if you remember just one thing it is this: Student Loan servicers really don't want you to pay off your loans. They make lots more money, if you don't pay fast or even on time, from interest, late fees, and extended repayment plans.

Back to my story.


So I made a call to Sallie Mae to see how they could help me lower my payment. If I had a time machine, this is the point in time I would return to, to warn my former self.


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Oh, they were so happy to help me! They promptly helped me to lower my payment as much as possible by consolidating my government loans to a fixed interest & then signing me up for extended repayment. At the time I didn't know what any of that meant and all I seemed to hear was the words "lower payment", and the rest of the small print seemed to not exist in my universe.


I found out the hard way that this was to be a fatal mistake.


The Lesson:


Although extended repayment allows people with > 30K debt to have smaller monthly payments over 20-25 years, for me, the cons of this move far outweighed the pros. This is because It ended up costing me so much more money in interest. I wish I could have had the knowledge to explore other options like 10 or 15-year repayment and not go straight to the longest repayment. I know now I could have switched back to a shorter loan term, but I didn't at the time, and I wouldn't find this out until 2021.



Mistake # 2

Having a "Normal" Mindset about Money


The reason I probably went so long before even being prompted to think about other shorter repayment options, was because, by all intents and purposes, I was doing what everyone else was doing around me: paying off student loans for years.


It didn't even occur to me to challenge it. After all student loans are considered good debt, right?


Looking back it just seemed like we were all brainwashed into thinking this was normal and ok to have this student loan monkey on our backs.


Until this day I can count with one hand the number of people I know personally that have paid off all their student loans.


What's crazy is that we view the people who paid them off as outliers!



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All it took was one person in my orbit becoming student loan debt-free for me to start paying attention to what they did differently.


This was a regular person like me, who definitely earned less than me, but worked hard, had a side gig but still traveled, and was able to enjoy life.


That's when I was tipped off. Whatever they did, was doable, and I sought out to learn more.


The Lesson:


Just because the education system is broken does not mean we are relegated to follow in the footsteps of the majority. People have freed themselves of student loan debt fast, without any special skills or magic. There is a formula and it is doable. If they did it, we definitely can too.

Mistake # 3

Not implementing a Fail-Safe Budget


If I would have known that the key to fast student loan payoff was getting better at budgeting, I would have done it a long time ago.


Taking a Burnout induced, pandemic sabbatical from the PA profession for 7 months helped me see some of the tricks used by these fast student loan pay-off people. Going down to one income, literally forced my husband I to get uncomfortably close with our money. At first, shining a light on the dynamic patterns of our cash flow was horrifying.



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But it was only when we observed our patterns, that we became aware of what needed changing and that was the catalyst to actionable course correction.


Once we gained intimate knowledge of our money, out of need, we then subsequently budgeted every single penny with zero-based budgeting with the YNAB app. What happened next really surprised us.


Although with me being out of work our income had decreased significantly, by keeping track of our money we were somehow able to pay down 20K in CC debt, save enough to purchase our 2 cars & new couch cash with sinking funds, and even take 2 vacations. Read more about how we zero-based budget here.


The Lesson:


Once you have money clarity and give every single dollar you earn a job, it will be so much easier to allocate whatever doesn't go towards essentials into debt and savings. If I could recommend 1 money move that has the biggest impact it would be zero-based budgeting with YNAB hands down.


I also highly recommend Cash flow Cornerstones by my friend, fellow PA-C, and completely student loan debt-free, Kristin Burton.



Mistake #4

Not doing a Payoff Sprint


I have noticed that the one thing that the Student loan debt-free crowd has in common is that they do a payoff sprint. What do I mean by that?


I mean they pay it off as soon as possible by making all the lifestyle changes necessary to make this happen.


If extended repayment is a marathon that costs you more interest in the long run, then a payment sprint is an all-out 100-yard dash that saves you lots of interest.

This means they continue to live like students after graduation until it is all paid off.


This means avoiding the urge to upgrade your lifestyle until the loans are paid off.


This means keeping the old car until it dies.


This means staying in the cheap apartment.


This means living comfortably but frugally & being super intentional about how you spend your money.


I wish I had done this right out of school, but the past can't be changed, but the present surely can!


This is why 13 years after graduating PA school- I'm doing a payoff sprint right now.




It's never too late to shift out of stale patterns and ways of thinking that no longer serve us.


If you want to come along on my journey to total student loan payoff join me here.


The Lesson:


The quicker you can pay your loans, the more you will save on interest and the less you will pay overall for your loan.


Allocating the money that would go towards a lifestyle creep towards your student loans will save you lots of money.


But honestly more than money, the biggest takeaway from doing a payment sprint is the incredible money habit of saving most of your pay, this will pay dividends for you later.


Just think about how much money you can keep once you're debt-free but keep saving the same amount of money!!


Hello trip around the world and hello work optional, am I right?


The thought of that kind of freedom makes me salivate. To me, real success is having the freedom to walk away from anything that does not resonate with you- toxic job, location, etc.


The Take away:


The educational system is broken, but you can get yourself out of student loan debt for good, regardless of how "late" you may be in working towards this.


There is always time to start now. It is never too late.


At the time of writing this blog post, I had $91,000 left in student loan debt. Follow my journey to student loan debt freedom here.











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