How I Repaid Half My Grad School Debt In 6 Months

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Sign in a field that says "halfway."

This doesn’t look like such a bad place, but probably best to keep moving.

It has been almost 6 months since I officially finished my last semester of school. And while that timing marks the beginning of repayment for many borrowers, for me it marks the halfway point of how long I gave myself to repay my grad school costs.

I am happy to report that I have stayed on track and plan to meet my deadline. Here’s how I’ve done it—and how you could put a dent in your debt too.

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Pay As You Go

As you may recall, my parents agreed to loan me money for grad school. They were kind enough to not charge me interest on what I owe, but that hasn’t stopped me from giving them payments here and there.

Similar to my other student loans, I paid my parents each month—just to chip away at what I owe them. (Thank goodness it wasn’t as much as my regular loan payments!) These small amounts may not have made a huge dent at first, but they showed my parents that I was serious about paying them back.

Even if you don’t have a loan like mine, you still may have times when parts of your loan are free of interest. Subsidized loans don’t accrue interest at certain points. If you’re in one of these times, why not be like me and make little payments anyway? Instead of making your parents happy, you’ll make yourself happy—because you’ll owe less in the future.

Plan Your Paycheck

Transitioning into the real world has been about as smooth as it could be. I love being in a routine and working with all new people. But I must admit, my favorite part is making what my cousin calls “big girl moneys.”

Having a steady paycheck allows me to live comfortably and keeps me on pace to repay my debts. In order to make sure that I keep my priorities straight, I set up my direct deposit to go into two different accounts: “serious money” and “fun money.”

An overwhelming majority of my paycheck goes into that “serious” account, which I use for loans, living expenses, and other necessities. Setting things up so that money automatically goes into the two accounts has made it convenient—and I don’t even think twice about it.

Put “Bonus” Money Right To Loans

Remember that studying I did all summer? Well, it paid off and I am officially done with the CPA exam! By itself, that was a huge relief. However, since I passed within a year of graduating, my employer also rewarded me with a nice bonus.

In addition to this CPA exam bonus, my employer also reimbursed all of my application and testing fees for the exam. When that comes, it will be like another added bonus for the exam—and I plan to put all of this money toward my loans.

These amounts alone will cover almost half of what I owe my parents. Putting “bonus” money (whether it’s from work, a holiday gift, or anything else) may not be fun, but I know that it can definitely pay off in the long run.

Don’t Underestimate Good Luck

Six months have passed, and I am right on track. I have been fortunate up to this point: receiving that interest-free loan, living at home to cut expenses, getting a job right away.

However, this is still all about choices I’ve made. So long as I continue to make smart ones by balancing my expenses, my student loans, and my need to have fun, I should be able to pay the rest of what I owe within the next 6 months!

What’s your secret to successful repayment? Share it in the comments.

(Photo: John Atherton)

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