6 strategies I used to pay off $81,000 in student loans

Courtesy of Melanie Lockert

Melanie Lockert.

• Melanie Lockert graduated from college with $81,000 in student loans, and spent several years paying the minimum amount due every month.
• When she still had $68,000 of debt left after getting her Masters degree, she decided to get serious about paying off her debt, and implemented the debt avalanche.
• She then put her energy toward earning more, took advantage of any freebies that could lower her cost of living, put cash back toward her loans, and adjusted her tax withholding.
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When I graduated in May 2011, I was filled with anxiety about my student loans.

I had just graduated with my Master's in Performance Studies from New York University. For my BA, I had borrowed $23,000 and for my MA I borrowed $58,000. Between graduating with my BA in 2006 and getting my Master's, I treated my student loan payment like a bill and just paid the minimum.

But after several years of payment and taking on more debt, I graduated and still had $68,000 left. Once I got serious about my debt and faced my debt head-on, I was able to make progress and paid off the $68,000 I had left in less than five years.

Here are the six strategies I used to get out of $81,000 in student loan debt.

1. I used the debt avalanche method

My Grad PLUS loans had interest rates of 6.8% and 7.9%, whereas my undergraduate loans had interest rates at less than 3% (I can no longer remember exactly how much). When I calculated how much money I was spending on interest, it came to $11 per day. After that, I knew I had to ditch my high-interest debt first.

I used the debt avalanche method where I paid the minimum on all my loans, while throwing extra cash at my highest interest debt - the 7.9% loans. I continued to do this, until that was paid off, and then threw extra cash at the 6.8% loans, and so on and so forth. The avalanche method will help you save money on interest over time, which can mean putting more toward your principal balance.

2. I made biweekly payments

One thing I didn't realize about student loan debt is that the interest accrues daily. In order to combat the interest that was growing each day, I changed up my strategy. Instead of making monthly payments as required, I made biweekly payments. I divided my monthly payment in two and paid that amount every two weeks. This helped me keep the interest more manageable without even having to pay more.

3. I put my energy toward earning more

After graduating and not finding a full-time job, I moved to Portland, Oregon. I cut my expenses in half but still only found temp work making $10 to $12 per hour. I had scaled back as much as I could. That's when I realized if I wanted to make real progress on my debt, I had to focus on earning more.

I began to side hustle any way I could. I worked as a brand ambassador, working as the public face of a company at public events. I pet sat for coworkers, found gigs on TaskRabbit like helping someone move, and once I found a gig on Craigslist where I ended up selling water bottles overnight at an underground dance party.

The holiday season was especially lucrative. I worked for a wealthy family assisting with their Halloween party. I worked as a coat check for holiday parties. I pet sat during Thanksgiving and passed out appetizers during Christmas parties. Any gig I could find, I'd do. I put all that extra money toward my debt.

4. I took advantage of free items

One way I was able to keep my expenses low was to take advantage of free stuff. I was lucky enough to get some free samples of soap, free coupons for food items, etc. with my brand ambassador side hustle.

I started working as an event assistant for a congregation. From that side hustle, there were many leftover items of food and wine, which helped lower my food budget.

If I had to shop and buy something, I researched free coupon codes by typing "[company] + coupon code". Taking advantage of free things helped keep my expenses low.

5. I put my cash back toward my loans

If I had to spend money on something, I wanted to make sure I was making some money in return. When I shopped online, I used Ebates, a site where you can get cash back at certain retailers.

I also had the Capital One Quicksilver card, where I got 1.5% cash back on all my purchases.

These are the best cash-back credit cards of 2019 »

I took the cash back that I got from Ebates and my credit card and put it toward my student loans.

6. I adjusted my tax withholding

Like most people, I was excited every year to receive a tax refund. But then I realized I'd be better off adjusting my tax withholding and boosting my paycheck each month. That way, instead of receiving a lump sum once a year, I'd have more money to work with each month. I used that extra buffer of cash to put more toward my student loans.

Becoming debt-free has been one of the great joys of my life. It wasn't easy or glamorous. It took a lot of dedication and hard work. Using these six strategies, I was able to streamline the debt payoff process and get out of debt faster.

• Read more about paying off student loans:
• I paid off $40,000 of student loans in 2 years thanks to a math-based strategy I'd recommend to just about anyone
• Here's exactly how much time and money you can shave off your student loans by paying $100 more each month
• I paid off $40,000 of student loans in 2 years thanks to 3 smart habits
• A financial planner has advice for a 30-something with over $100,000 in student loans who wants to buy a house near San Francisco: Don't

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