What I Wish I Knew Before Racking Up $100,000 In Student Loan Debt

Dealing with student loan debt starts well before graduation. Here’s how to get ahead of it.

What I Wish I Knew Before Racking Up $100,000 In Student Loan Debt
[Photo: Maminau Mikalai via Shutterstock]

After spending six whole months in the “real world,” the class of 2015 is about to confront one of the most dreaded realities that some 40 million Americans struggle with today. Last May’s graduates are making their first student loan payments right now. Most of them will be writing those checks for years to come.


I graduated in 2009 with an economics degree and $100,000 in federal and private student loans, which I’m still paying off. Looking back, there are plenty of things I wish I’d known–not just when I graduated, but before I even set foot on campus. I’m sure I’m not alone; with combined student debt in the U.S. topping $1 trillion, loans create huge obstacles for young, degree-holding workers trying to launch their careers.

Fortunately, there are a few strategic steps that can help you pay down your debt responsibly during the crucial first few years after entering the workforce. Here are some lessons I’ve learned in my own reckoning with student debt, and as the head of a startup geared to helping others do the same.

1. It Pays To Read The Fine Print

Step one in paying off debt is to cut down repayment time. That’s a basic rule that anyone who’s ever owned a credit card understands, but the size of most college loans leads many students to underestimate it. Students need to know the implications of some of the more popular options like deferment, forbearance, and income-based repayment. They might seem appealing because they cushion the blow of paying off your loans immediately.

But take my experience as a lesson: I graduated with $74,000 in debt and chose to defer repayment. Soon enough, my total debt skyrocketed to over $100,000. Looking back, I probably would have begun making payments right away to avoid excess interest charges.


When selecting a repayment plan, read every detail of the options available to you. If you don’t understand the fine print, keep asking questions and doing research until you have a good grasp of the particulars. There’s too much money on the line not to. Know how your repayment plan impacts your finances both in the immediate and long terms. If a certain offer will make you go further into debt later down the road, explore another option. I wish I had.

2. Earlier Is Always Better

When I started college, I hadn’t actually calculated how much my four years would cost me. As I eventually learned, dealing with student loan debt begins well before graduation. You should have a clear financial path for those four years and beyond before the first day of class. But if, like me, you didn’t plan properly from the beginning, it’s vital to put a repayment plan in place as soon as possible.

Two popular loan repayment strategies are the “debt snowball” and “debt avalanche” methods. In the former, you pay off loans starting with the smallest balance first, then work your way up to larger balances until all debt is clear. This option can be emotionally rewarding since it lets you celebrate small wins early on, motivating you to take on larger chunks of debt.

The avalanche method, on the other hand, emphasizes paying down your highest-interest loans first, which saves more money over time. Neither is necessarily better, and your financial and employment situations can dictate your options after graduating. But it’s important to think strategically about your approach, including switching it up as needed. In the past year, I’ve paid down $18,000 by using a combination of these two strategies.


Don’t dismiss refinancing, either. As before, the fine print matters, but I refinanced my loans earlier this year and dropped my interest rate from 6.8% to 5.9%, which will save me thousands of dollars in interest.

3. Location, Location, Location

Where you attend college has significant financial consequences. For instance, is the school located in a metropolitan city or in more rural, less expensive area to live in? Are there residences on campus available for all four years, or do students ever need to move into off-campus housing? These answers come with different price tags and are worth weighing up as you apply to schools.

Where you live and work after graduating also has a huge impact on your wallet. Living expenses, including rent, groceries, and transportation, vary dramatically by city, and a lower cost of living can put additional savings toward loan payments.

After living in New York for years, which has notoriously high rent and living costs, I moved to Texas. A strong deciding factor for the move was that I could spend less on my living expenses and put more money toward my loans. As a result, I now save roughly $400 in monthly rent and about $10,000 in income tax–no small chunk of change.

4. It Takes Commitment

Only 5% of Americans say their student loan debt is their number one financial priority, according to a survey my company commissioned the polling firm YouGov to conduct this August. It isn’t that young professionals are being dismissive of their debt burdens, it’s just that many of them see launching their career paths and other matters as even bigger challenges. But the fact is that they’re deeply intertwined. And unfortunately, that debt is never going to go away unless borrowers choose to make it a top priority.


Paying off debt is a marathon, not a sprint. You won’t eliminate your student loans overnight, but you don’t have to live a miserable, penny-pinching lifestyle until they’re gone, either. Making smart financial choices, like budgeting, finding creative ways to boost your income, and sticking to a structured repayment plan can go a long way.

I might have learned these lessons the hard way, but I’m gratified to have discovered that it is possible to dig your way out of a $100,000 hole. Even better, though, is not getting yourself into one in the first place.

Andrew Josuweit is the CEO and president of Student Loan Hero, a company that combines easy-to-use tools with financial education on managing student loan debt.