Raise your hand if you have or will have student loan debt? Ok…just about everyone here? That’s what I thought. According to finaid.org
, over 65% of undergraduate seniors with a Bachelor’s degree in 2007 – 08 graduated with an average of over $23,000 student loan debt. But the borrowing doesn’t stop there.
reports that at least 55% of graduate and professional students borrow more to pay for their continuing studies; in fact, they borrow anywhere from $30,000 to $120,000.
Joe Mihalic was no different. An undergraduate from University of Michigan, according to Poets and Quants
, Mihalic worked a few years in Austin before heading to Harvard Business School
. After graduating, Mihalic had nearly $101,000 in student loan debt, which included accumulated interest.
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He got a job with Dell upon graduation from Harvard, making twice what he made after graduating from college, reports Poets and Quants
, and began faithfully making payments to his student loan debt. But it didn’t take long for him to realize that he wasn’t doing enough to put a dent in his student loan debt – so he decided to do something extreme and document it on his blog, nomoreharvarddebt.com
, where he writes:
Since graduation, I’ve made 21 monthly loan payments at $1,057 each. After paying $22k towards my $101k of loans, the balance stands at $90,717. That’s absurd. The math indicates that I’ll pay $42k in interest if I go to term (10 and 15 years) with the various loans. Thanks, but I’ll pass. Enough is enough. I’ll do everything in my power–short of lying, cheating, and stealing–to pay down this debt in the next ten months.
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Essentially, Mihalic took his budgeting strategy to a new extreme. Poets and Qaunts
elaborates: “Mihalic gave up all dinner dates and didn’t go to a single movie. He stopped contributing to his 401K plan, decided against going home for Christmas and missed his friends’ parties and weddings.”
But he didn’t stop there. On his blog
, Mihalic details looking for part-time work on Craigslist, renting the extra rooms in his home out to strangers, selling his second car and motorcycle and starting his own landscaping business.
However extreme his approach may be, it worked. Mihalic not only paid off his student loan debt
, but he did it in seven months, just three months short of his initial deadline.
You can follow his story in full on his blog, nomoreharvarddebt.com
. It might be worthwhile to mirror his lifestyle for the next few months, and see where it takes you on your student loan repayment plan.
What do you think of Joe's plan? Is it something you would try?