The first student loan I ever paid off was my Parent Plus loan.
Why?
I felt like I owed my parents money. The loan was not only in my name, but their name as well. So I took it as my responsibility to pay that loan off first, which gave me peace of mind.
What about the next loan?
Well…that’s the thing. Here’s the oath I gave to myself for not only my second student loan, but any other debt I ever maintained.
I could never maintain debt that I was unable to pay off right away UNLESS it was business debt of some kind that maintained a sole focus of business growth.
But the second student loan I was never in a rush to pay off because…well, I could pay it off at any time and the interest rate was so low.
Why would I focus on paying off a low balance with a low interest rate, when I can get 20–30% or more with the same capital I would use to pay off the loan from investing?
It doesn’t make sense and would essentially cause me to lose money.
If you’re wondering if you should pay off your student loan, ask yourself a few questions:
- What is the monthly bill? The first step when it comes to elevating your financial status is awareness. Without awareness, you’re running blind.
- Is the monthly bill sustainable? If the bill is not sustainable, consider consolidation or income driven repayment to lower the bill. Keep in mind, this will keep the debt with you longer, though.
- When do I want to pay off the debt? My only goal was to pay off the Parent Plus loan. After that I only had one more loan to pay off, which I did not rush to do.
- How much do I need to pay per month to pay off the debt by my intended date? For some people, 20–30 years is their preferred timeline. For others, they’d like to get rid of that sh*t within 5–10 years. Others 1–3. Whatever your timeline is, choose it with conviction, and make sure you are elevating your net worth with whatever path you decide.
What kind of debt might you consider paying off sooner?
- Credit card debt
- Personal debt
- Car debt
These often have much higher interest rates, can steal away peace of mind, and don’t offer much value to your financial situation in the long-term.
Kill these before you kill the student debt. Unless it makes sense to go for the student debt first.
I Went Back to School for 3 More Degrees
Another thing.
Get your school paid for.
There are scholarships, employers, programs, and hidden gems lying all around waiting to be discovered to pay for your school.
When I decided to go back to school and get my fourth bachelor’s and two master’s degrees, I was determined to leverage my income and as many other opportunities as I could to get my school paid for.
If you can avoid it, there is no real reason to go into debt for information you can acquire online. So get your credentials for free. You’ll come out of whatever program you decide with more knowledge that can help increase your wealth AND you’ll come out wealthier since you didn’t rack up a bunch of debt.
Maximize Your Education
When I went to school for the first time, I told myself, I’m not getting fewer than three degrees because that would be a total waste of time and money (for me personally).
So I was like look bro let’s get three, plus I didn’t know which path to pursue, so I gave myself three options.
If you can, when you go into these programs, come out with double or triple. There is often not astronomical deviance in the price since you can overlap classes with some programs.