The DIY Student Debt Repayment Guide

Piggy Bank Succeeding on your own, while paying rent and Sallie Mae

It’s autumn, college classes are in full swing for new and returning students alike. New graduates are making the adjustment to life after college: securing a job, moving out on their own, enjoying life without the worry of homework and exams, and beginning to pay back their student loans.

You probably don’t want to think about the mountain of debt you amassed while pursuing your degree, but the sooner you get to working your way free, the quicker you can get on with a life of financial freedom. Though they may seem harmless now, you can’t ignore your student loans forever.

In fact, if your student loans are still in their grace period, this is the perfect time to start paying them back, and planning on how to pay them off can be a crucial first step. Why? Because after the 6 month mark, interest will capitalize on any unsubsidized loans you have. That means hundreds (or thousands) of dollars will be added to your balance, if you don't take action.

Why It’s Important to Focus on Your Student Loans

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~ If you need some motivation, just take a look at the numbers. ~

Under standard repayment, student loans terms typically last for 10 years. This means that you would be around 32 when you go to make that final payment.

Let’s look at the average student loan debt recent students graduated with: $33,000.00. Over 10 years, at a 6.8% interest rate, you’re looking at paying $12,600 in interest. That brings the total cost of your student loans to $45,600.

You could buy a brand new car for how much you’ll pay in interest for the life of the loan!

What if you were able to pay extra? Even just another $100/month? It would take you almost 3 years less, and you’d save $950 toward interest. At an extra $200/month, you would be able to pay your loans off 4 years earlier and save $2,400 on interest!


As you can see, paying extra can literally pay off, in the long run.

Getting your student loans out of the way early on in life also makes it easier to focus on more important goals, such as buying a house, getting married, or investing. Unpaid student loans are a large financial burden for most graduates, and can be an easy way to harm your credit score early on in life, which prevents many young people from from moving on with their lives after school.

Get Into the Right Mindset


Now that you know why paying off your student loans early will benefit you in the long run, you need to get into the right mindset. Paying off your loans won’t be easy, but if you stay committed over the course of a few years, the benefits will be great.

Throughout your debt payoff journey, you might be tempted to shirk responsibility and live it up with your friends. There is going to be a lot of temptation along the way, and the best way to beat it, is prepared.

Start out by listing some of the reasons why you’re choosing to pay early. It can be some of the reasons we listed above, or your own. Having this list of "why’s" will help keep you on course when you’re struggling and feel like giving up.

Students Loans List

It may be wise to continue living like a broke college student, to some extent. Yes, you’re probably sick of that – but it will really help you when you start out. This isn’t to say you need to continue living on ramen noodles or anything, but don’t fall prey to lifestyle inflation when you get your first “real” job, making thousands a year.

Again, the temptation is going to be there to spend all of that money quickly, but don’t do it, instead, think of how much more you’ll be able to pay toward your student loans, and how much closer that will bring you to paying them off.

Create a Spending Plan


It’s important to have an overview of your monthly expenses, in order to create a plan to get out of debt while living on your own. You might not have anyone helping you financially at this point, and if this is your first time operating independently, having a spending plan will help.

Start out by listing all of the monthly expenses you currently have. Go back through the last 3 months of bank and credit card statements to review any other spending you’ve done, and keep track of those totals. You will want to make sure you account for as many categories as possible in order to plan expenses accordingly.

A basic plan should look like this (note: the numbers are just examples to get you started – be sure to use numbers that are realistic to your situation!):

Student Loans Budget Table

It goes without saying that your expenses should add up to less than what you earn. If they’re over what you’re bringing in on a monthly basis, you need to cut your spending, otherwise you’ll end up in even more debt. If that’s the case, analyze each category, line by line, to see where you can trim the fat, and make changes.

Here is a list of budget templates you can download, if you’d like to plug your numbers in there. It’s worth it to note that services like will pull your expenses automatically if you use your debit or credit card for purchases. It’s the hands-off way to keep track of your spending.

Like a diet log, the purpose of having a spending plan is to keep yourself accountable. Paying off debt does not necessitate complete deprivation, as you can see, you can include an entertainment section in your budget, for those times where you do want to live it up with your friends. Just make sure you can afford it first!

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Track Your Spending

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Okay, now that you have your spending plan set up, you need to fill in the “actual spending” column because it’s vital to know exactly where your money is going!

You will want to make extra payments on your student loan debt, so that you can pay them back quicker. The best way to “find” that extra money is to see where all of it is being allocated.

(This is especially important for those of you who use cash. You probably don’t remember what you spent your money on in the past 3 months, and this will give you a better idea of where your funds are going.)

When we say track your spending, we mean all of it. Little purchases here and there can really add up! It’s up to you to choose how to track your spending, whether it be a pen and paper; manually entering amounts into your spending plan spreadsheet; or using a program like Mint.

Credit Cards

Along with tracking what you spend, you should also make a list of your values and goals, as those will make it easier to prioritize your spending. This is important if you are prone to impulse purchases. Weigh your options – if you spend money on something, make sure that it is a high priority, as that is money which can’t go toward your student loans (or anything else).

Lastly, it’s a good idea to set reminders on your phone for when bills are due. The last thing you want to do is to miss a payment! If you feel comfortable with it, you can even enroll in auto-payments, as most companies offer them as an option. If you do, just make sure to always keep a small reserve in your checking account, so you avoid any overdraft fees.

It’s best to think of these first two steps as cornerstones for learning how to manage your money.

Create an Emergency Fund

If you’re trying to pay off your student loans, shouldn’t all of your money go toward that? Yes and no.

If something happens to your car, how are you going to afford the repair? What if you get a speeding ticket? Or if your pet falls ill?

After you graduate, you will need a small emergency fund for the little things in life that can and will happen.

Rack Up Pull Quote

If you don’t, then your debt repayment progress may come to a halt. Imagine that your car did break down – and it cost $500 to repair. You charge that $500 to your credit card, but now you have to worry about paying that off in conjunction with your student loans. You don’t need any added stress which could be easily avoided with a little planning.

Some financial gurus say that $1,000 is a great starting point. Most college graduates aren’t going to have too many liabilities, so $1,000 should be fine to cover any small things that may pop up. From there, work towards having three to six months’ worth of expenses saved in your emergency fund (after your debt is repaid).

Decide what’s best for you, and work toward saving that amount, while still paying extra toward those loans. Your budget will be key to helping you keep on track with this.

Take On Extra Work

If you’re having trouble coming up with extra money (it can be difficult to get a well paying job right out of college these days), consider taking on some extra work. Can you work overtime at your current job? Pick up another part-time job or two? Pet-sit or babysit? Do you have a skill that you can charge for?

Do a Google search for “side hustles,” and you’ll find countless ideas of work you can do to earn extra money. Many of these ideas can be done from the comfort of your own home and on your own time and schedule. If you really want those student loans gone quick, you have many options available to do what it takes.

Think about it: if you can earn $400 extra a month, all of that money can go toward your student loans. That’s a huge chunk! Besides that, it will help you gather up enough money to have an emergency fund, or to replenish it in case something does happen and you need to use the funds. A little fund can go a long way towards reducing stress and making you feel financially secure.

Creating a Student Loan Debt Repayment Plan

Now that you have all the building blocks together, you can get started on creating a debt repayment plan.

(This is going to look different for every individual, so don’t feel like you have to follow all of this to a T. For the sake of this guide pertaining to student loan debt, that is what we will be covering here. If you have other debt besides student loans, you can still follow this guide.)

The first thing you need to do to create a student loan debt repayment plan, is to lay out all of your student loans individually. You might have loans with different lenders, making it a little confusing to gather all of them together. The National Student Loan Data System is a great resource and will pull up all of your student loan services together.

The next step is to create online accounts with the institutions that you owe. Most will send you a letter in the mail, notifying you of your impending student loans, with compiled information and instructions on how to do that.

This example shows the easiest format all of your information, and plug it into yet another spreadsheet:

Lender Chart

You want to organize everything in order to have a snapshot to refer to during your payoff process, and to help decide which loan to focus on first.

There are two main methods to figuring out which loans to pay off first:

Snowball Method: This entails choosing the loan with the lowest balance (in this case, Nelnet), and paying the minimum on the other 2 loans, while putting however much extra you can manage toward Nelnet.

This method is mostly used if you want to gain momentum, by starting small before tackling larger debt. It can be overwhelming to look at $4,000, let alone $10,000, so this method allows you to start small and work your way up.

After you pay off Nelnet, you’ll then snowball your payments into Sallie Mae, and continue to pay the minimum on Great Lakes.

Once Sallie Mae is paid off, you’ll be ready to tackle that $10,000 with the extra payments you had been putting toward both Nelnet and Sallie Mae, enabling you to pay much more than $83, and thus accelerating your payments.

In action: Pay $200 toward Nelnet; Upon completion, snowball that $200 into the $41 you’ve been paying toward Sallie Mar for $241; then snowball that into the $83 you’ve been paying toward Great Lakes for a total of $324 per month. You’ll be knocking out Great Lakes in no time!

The following demonstrates what would happen if you went this route. In this case we’re assuming you can pay an extra $200/month toward your loans:

UnburyMe Calculator 01

The above illustrates the Snowball plan, where the smallest loans are payed off first, before moving on to the larger loans.

UnburyMe Graph 01

This method helps eliminate loans quickly and limit paying interest to multiple lenders.

UnburyMe Table 01

Avalanche Method: This involves focusing on the loan with the highest interest rate first (in this case, Great Lakes). This is the optimal approach, as you’ll end up paying more in interest over the life of the loan on Great Lakes than you would on Nelnet. As we’ve already discussed, high interest rates are not your friend.

Contrasting with the snowball method, you’ll only pay the minimums on Nelnet and Sallie Mae. Once Great Lakes is paid off, you can throw the extra money you have toward Sallie Mae, and then to Nelnet.

Take a look at the graph again – same details, but with the avalanche method chosen. You’ll be paying a little less in interest:

UnburyMe Calculator 02

The above plan illustrates the avalanche strategy of paying off the largest loans first.

Unburyme Graph 02

Notice that the total interest payed using the Avalanche method is nearly $250 less than is payed with the Snowball plan.

UnburyMe Table 02

It’s worth noting that it really doesn’t matter what method you choose, as long as you’re going in the right direction of paying down your debt. If your highest interest loan happens to be a ridiculously large amount that you don’t want to face right now, choose another loan to tackle.

Take a deep breath, whatever you decide, just make sure you’re focusing on one loan at a time. Remember that paying $20 extra to all of your loans is not going to be as effective as paying $100 extra toward one loan. You’ll chip away at it quicker by focusing on one.

Repayment Plans

What if, despite your best efforts, you simply owe too much, and cannot afford to make the minimum payments on your student loans? Fear not – there are a few payment options available to you. Your student loan servicer may highlight some of these options on their website, but here is a comprehensive resource that goes over each repayment option in detail.

You should know that in the meantime, you’re responsible for making any and all payments as they are due. You need to let your loan servicer know beforehand if you can’t make a payment.

Late Pay Pull Quote

The best thing to do, if you are in a pinch, is to call your loan servicer and explain your situation. They might be able to offer you a different repayment plan, but this is not a reason to let the due date go by without a payment.

It is important to know that, if you stick to any of these alternate plans for the entire duration of your loans, you will end up owing more than you would if you stayed on the standard repayment plan.

Another option is Loan Consolidation. This method can simplify loan repayment by centralizing your loans onto one bill and can also lower monthly payments by giving you up to 30 years to repay your loans. Though it is important to note that you will be paying more over time, you might also gain access to alternative repayment plans you would not have had before, and you’ll be able to switch any variable interest rate loans to a fixed interest rate.

As you already know, if you increase the length of your repayment period, you'll also have to make more payments and pay more in interest. It is important to compare your current payments to what payments would be if you consolidated your loans.

Deferment is another option which can be available upon request. A deferment is a period during which repayment of your loan is temporarily delayed. During a deferment, you will not need to make payments. It is also important to not that, depending on the type of loan you have, the federal government may pay the interest on your loan during a this time.

If you are unable to pay your scheduled loan payments, but don't qualify for a deferment, your loan servicer may be able to grant you a forbearance. With forbearance, you may be able to delay making payments or decrease the size of monthly payment for up to 12 months. This is a last ditch option however, because interest will continue to accrue on your subsidized and unsubsidized loans.

If you are experiencing financial trouble and want to look into these other options, check out the Federal Student Aid.

Get a Support System


No one likes to go through things alone. If you have friends with student loan debt, try talking to them about your struggles. Explain why you’ve chosen to pay off your loans early, and see if they will join you.

If they do, you’ll have an accountability buddy or two. Make it a friendly comparison to see who can pay their loans off faster. This might sound a little silly, but it has the ability to transform the dull nature of paying off debt into something a bit more engaging, and gives an additional incentive to pay off your loans quickly.

Remember to Reward Your Efforts


Whether you decide to go it alone or with your friends, make sure to reward yourself along the way. If you hit a milestone (every $1k or $5k of debt gone), take time to celebrate!

You can still live your life while paying off your student loans. It shouldn’t feel like a prison sentence. Building little rewards...into your spending plan can be a great incentive. Choose a mini-luxury for $10 or less and allow yourself to look forward to it and enjoy it after reaching a certain milestone.

It’s a Long Road Ahead, But It Will Be Worth It

Remember to keep your list of “whys” handy throughout this journey to refer back to when you’re frustrated. It’s easy to feel like you’re not making any progress when you’re in the thick of it, but every so often, go back and look at how far you’ve come. In just a year, you’ll be surprised at how much you’ve managed to accomplish.

Also, you never know when an unexpected windfall may come your way. Tax returns and bonuses are great for paying down a large chunk, and it helps to see your balance drop dramatically. Even though you think you can only afford to pay X amount toward your loans a month, you won’t be counting any bonus money you may receive. Keep that in mind for when the going gets tough.

Break everything up into digestible chunks. Don’t look at this journey in terms of years – look at it in terms of what you can do on a monthly basis to increase your payments. Don’t overwhelm yourself with planning.

Keep your debt payoff date nearby at all times, and keep yourself motivated by visualizing how awesome it will be to finally submit your last payment ever.

We here at Total Mortgage wish you luck on paying back your loans and continuing on with a life free of student debt.

Good luck!