After graduating from college with $15,000 in student loan debt, Daniella Flores made several mistakes when it came to repaying her loans. She didn’t prioritize her student loan payments and faced job switches, layoffs, and surprise expenses. She also didn’t fully understand how student loans worked, putting her loans in forbearance and deferment without realizing the consequences. Additionally, she fell for a loan consolidation scam, resulting in extra fees and a loss of money. These mistakes led to her accumulating an extra $4,500 in interest and fees.
To tackle her student loan debt, Daniella set a repayment goal and enrolled in automatic payments to avoid missing payments and incurring additional interest charges. She also decided to pay more than the minimum amount each month, increasing her monthly payment from $111 to $350. To increase her income, she took on side hustles such as freelance work and reselling items, in addition to her full-time job. By managing her time effectively and communicating her schedule with her spouse, she was able to make significant progress towards paying off her debt.
In order to educate herself about managing her money and loans more effectively, Daniella read personal finance books and learned about different repayment options and relief programs. By increasing her financial knowledge, she felt more confident in her repayment decisions. She advises others to avoid common debt pitfalls and seek guidance from resources like the Federal Student Aid website if feeling overwhelmed. There are options for lowering or suspending payments in case of financial setbacks, as well as potential loan forgiveness or cancellation under certain circumstances.
Ultimately, Daniella was able to pay off her nearly $20,000 student loan debt in eight years by following a structured repayment plan and increasing her income through side hustles. By prioritizing her debt payments and educating herself about financial management, she was able to overcome the mistakes she made earlier in her repayment journey. She encourages others to learn from her experiences and avoid falling into the same debt traps that can end up costing more in the long run.
