How We Did It

Every year, millions of Americans successfully repay their student loans. How do they do it? What can you learn from them? Here are some tips from actual Sallie Mae customers about how they were able to successfully repay their loans—often ahead of schedule and sometimes in spite of financial difficulties.

Make a budget and stick with it

For Laura, a Sallie Mae customer from Rochester, MI, the key to successful student loan repayment was making a budget. “For us to succeed, we made a budget (with some wiggle room) and we stuck to it,” said Laura. “It has been a tough journey with a great reward. We have no loans except for our primary mortgage and it wasn’t because of our incomes—it was because we communicated a plan and tried our best to stick with it.”

Have a specific goal

In addition to having a budget, it can be helpful to have a specific goal in mind. That worked for Beth of Sucasunna, NJ. Beth and her husband set a goal of paying off her debt before they had their first child. “Once we committed to the payoff, we put every extra dollar we had at the end of the month towards an additional payment,” said Beth. “We worked extra hours and extra jobs and we finally paid it off in 2 ½ years. We had a nice celebration the night we made our last payment.”

Make extra payments when you can

Most Sallie Mae customers won’t be able to pay off their loans as quickly as Beth did. But her strategy of paying something extra each month is both sound and popular. James, of Silver Spring, MD, made a real science of it:

“My three golden rules were: 1) Pay something toward the balance [principal] every week on Fridays—at least $50 more than the accumulated interest; 2) Increase each week’s payment by at least one cent over the preceding week; and 3) In any month where I had more money, I paid at least 10% of the extra toward the loan before touching the rest [of the money],” said James.

Even if you can’t make extra payments right from the start, it’s helpful in the long run to pay a little extra whenever you can. That’s what Sean of Charleston, SC did. “My salary for the first few years after law school was not particularly high and did not allow me to make full payments,” said Sean. “So I deferred part of my payments. Once my career was underway, I was able to make more than the required payment to start paying down the principal much faster. Even an extra $25-$50 can make a big difference in the total time it will take to pay off your loans.”

Pay interest while in school

Suzanne, of Pittsburg, PA also found that making extra payments helped her successfully repay her loans. But she wishes she had started paying interest on her loans while she was in school. “First and foremost, I strongly recommend to start paying the minimum amount on loans that begin accruing interest immediately. This was the greatest mistake that I made. I ended up paying $9,000 for a $6,500 loan that I could have managed payments of $50/per month [on] while still in college,” said Suzanne.

Pay more than the minimum

Jennifer, of Livonia, MI is of the same mind. She started paying her loans while she was in school and paid more than the minimum amount. She notes: “I also tried to make a payment every pay period so in my case, every two weeks, giving me 26 payments versus 12 payments a year.”

Make student loan repayment a priority

What do these successful Sallie Mae customers have in common? They all made repaying their student loans a top priority and were self-disciplined, living within their means so they could stay on budget and secure a brighter financial future for themselves.

As Sallie Mae customer Ana, of Minneapolis, MN put it: “The best advice I can give to others is pay [your student loan] off while you are young and have no other large expenses to pay for. Just limit yourself to the necessities, and once you’re done you can spurge a little. It is a great feeling when you are sitting at a table with everyone complaining about their student loans and you don’t have to say a word.”