Interview With a Person Who Paid Off $48,000 in Student Loans in Four Years

Marnie Gallowy! The Internets told me that last week—eight years after you graduated from our ol’ alma mater—that you paid off the last of your $48,000 in student loan debt. IS THAT TRUE? Are you a wizard?

Hey JShine—you found me out, I’m a wizard! My student loan debt totaled $48,000 and change ($33-ish from undergrad, and $15K from a poorly advised year in grad school). The bulk of my undergrad debt was federal student loans, but bundled in there was a nasty $8K Sallie Mae with a 12 percent interest rate. My grad school debt was also a mix of federal and private, but the private loans I got at that time were comparatively reasonable.

 

You paid it off in eight years! How did you do this!?
Really we weren’t in a position to start paying off anything but the minimum on our debt until after we got married in 2010, so jeez, all of this was paid off actually in about four years?

For my first year out of college, my mom helped pay for my student loans. She had just landed the first well-paying job of her career, so she wanted to help out, and I was grateful for the time to figure out what I was doing with my life. After that year when she was paying the minimum contribution and I picked the payment back up, my partner Tom (now husband) and I looked at the balance compared to what it was when I graduated and were shocked that it was higher than before. The minimum wasn’t even paying off the interest.

In 2007 we moved to Chicago because Tom got into a great Ph.D. program, and I got another secretary job. We were living exclusively off my $25K/year income, pinching pennies and eating a lot of rice and beans. After a year of that, I decided that my way out of secretary life was to start an MFA program to be an artist, so there was a year when neither of us were making money other than my part-time job in the department and Tom’s funding.

 

Okay, so four years ago you and Tom decided to go after your student loan debt. What did that look like?
After we both had more predictable income, we made a plan to prioritize paying off debt. That year when we weren’t even paying the interest made me vengeful, and Tom has always felt insulted by debt—he’d rant to anyone listening that it’s a tax on our future. We decided that we were able to live just fine at $25k/year, so that was what we lived on even though we were making more. Everything extra we made went straight into savings, and then every few months we’d throw a big chunk of that savings into the debt hole. (First to go: adios, Sallie!) We fought really hard against lifestyle inflation: kept cutting our own hair, buying things second hand, taking an eight-hour Megabus trip instead of flying, etc., even though we could afford not to. We don’t have a car, but even public transit started feeling like too much: I realized I could save $100/month on train fare by biking to work instead of taking the el.

In the last two years we both lucked out and got pretty solid jobs: I got a full-time job in design, and he was King of the Adjuncts (teaching eight classes at a time) before he got a totally sweet research job last September. That really helped: we were still living off our mega-condensed budget, and suddenly had a lot more money to throw at debt. Last fall we were taking a train back from a wedding in St. Louis and realized kind of unexpectedly that we had enough money gathered among all our savings-buckets for a down payment for a house…or enough to obliterate my debt, which was about $18K at the time. It was scary to think about moving all that money, so we waited a little longer. This month, we upturned those buckets and finished the debt off once and for all.

 

Holy crap.
I do want to say, the last thing I want is for this to sound like a bootstraps story: “We were able to pay off a boat load of debt, so anyone could!” Nope. We had a hell of a lot of luck and privilege. Neither of us got sick or have chronic illnesses; neither of us had huge family crises that required us to stop working. We’ve been together for years, so we’ve been able to share expenses and lean on each other when jobs disappear. We live in Chicago, which has super affordable neighborhoods and jobs that pay enough so that people can live in the nicer neighborhoods, you know? We both have pretty elite educations, so the jobs we were able to get when we finally found footing in the job market have been pretty well paid. Frankly, having the choice to live under our means is a luxury, and one that we realized might not always be around.

 

Did you have health insurance during this time, either/both of you?
Tom was without insurance for the year that he was without funding, but the rest of the time we both had some kind of coverage. I paid for an emergency-only policy out of pocket during the years when I was working multiple part-time jobs. I got my policy through Fractured Atlas, which is kind of a union for artists, so the insurance I got was pretty affordable—like $75/month? I never went to the doctor, though, which is partially habit from having grown up without health insurance. I got the coverage in case I got hit by a bus or doored when biking around town; it was more for peace of mind than actually getting health care. When I got my full-time design job it came with full benefits and because we were married I was able to get Tom on my policy, so we’ve both had pretty nice insurance for the last year and a half or so. It was so great to be able to get new glasses!

 

It sounds like you gave up a lot or delayed or deprived yourselves a fair amount. Is that true?
Good and tricky question! We try very openly and conscientiously to orient ourselves towards life/money in a positive way rather than negative. [Sometimes it was] really rough. There were periods when we were both really demoralized and depressed from working so many late hours and early mornings without feeling like we were getting anything out of it. [But] we made lifestyle choices to build towards what we want—to pay off debt and have the ability to be generous—rather than what we were willing to give up. I mean, would I love to spend a few weeks in Mexico? Totally. But looking at the past few years, I’m really happy and don’t feel deprived. Materially we did go without a lot of conveniences, but again it doesn’t feel like a loss, just a choice.

 

About that $33K logic/philosophy degree. If you could actually go back in time and tell Youthful Marnie what to do, would you advise her to make a different choice about college? If you talked to Youthful Marnie about student loans and how SRS BIZNESS they are, would YM have even understood/gotten/bought it?
Ugh, good question. I think about this a lot. I am really, really happy with where I am in my life and that is of course a result of having made the choices I did, so I don’t think I’d advise my younger self to do anything differently. The logic/philosophy degree gave me a lot of confidence as a writer and as a debater, which is a broadly applicable skill set. I might not have a job that directly relates to that training, but I’ve gotten every arts grant and fellowship I’ve ever applied for and I don’t think that’s because I’m particularly talented–I just know how to craft a really strong argument for myself. One of those grants helped to boost my visibility in the arts field I am working in, which has opened a lot of doors for me. And the graduate program I went to for a year, which was very expensive and very disappointing, helped me realize that that I don’t need an institution’s permission to make the work that I want to make. That was extraordinarily liberating. I also met great friends and colleagues who inspire me to make better work, to keep challenging myself, which remains hugely valuable.

I do wish that someone—time-traveling adult Marnie, or better yet a financial counselor—had been available to help me really learn about money when I was younger, maybe even younger than college. We both grew up in homes with instability, barely making it paycheck-to-paycheck, and, boy, do I respect what a challenge that must have been for our parents. But that means that neither of us [had] an intuitive grasp on how to think about big-picture finances other than “be frugal and try not to panic.” We’ve tried to teach ourselves, but I see the fluency in which some friends think about money and it’s baffling. I don’t think that my teenaged self would really understand what a burden $48K in debt would be; it seems like such an impossible number. All I knew was that I wanted to go to college, and I’d sign whatever paper they gave me that would let me keep studying.

 

I think that’s the case for a lot of students. How did you finally start to acquire those financial management skills?
When I graduated from college in 2006, I had absolutely no understanding of how to deal with money. I had been mostly financially independent for the past four years, but with the mentality of, “If I don’t look at my balance and don’t spend money, I should be OK! La la la!!!” When I got my first job as an entry-level secretary at a university HR department I was given a form to fill out for my 401(k) and I had no idea what that was. That made me feel like an idiot, which I resented. I spent the next few months apprenticing myself to every personal finance blog I could find and obsessing over my Mint.com charts and graphs, which became a mindless hobby. Check email, check Facebook, check Mint. Lather, rinse, repeat.

 

So our alma mater’s vaunted financial literacy program didn’t make a dent while you were in school, huh?
Ha! No, it sure didn’t. But now that you mention it, I do remember getting a lot of flyers in my mailbox and email blasts about those events. Maybe instead of Time-Traveling Future Self or Personal Financial Advisor I should have wished for someone to shake me by the shoulders and tell me that I should take advantage of free programs instead of feeling too intimidated/embarrassed to ask for help?

 

And how did the finance stuff work in your relationship? What was your household budgeting like in your years of deprivation & penny-pinching? How did you and Tom do that?
In those years of super tight finances, strategizing about money started feeling like a sport: We were battling a behemoth, and had to strategize our best move. It totally became a game. “If we do X a little cheaper, we could pay off that much more!”

Tom and I are both big advocates of putting money right in to savings; our strategies are a little different, but in ways that are complementary. Every paycheck he would put 10% into emergency savings, 10% into retirement, 10% for charity, 10% into a savings fund for family (in case of emergencies), stuff like that. My savings were more directed towards specific predicted expenses, like “Thanksgiving travel” or “book printing” or “my computer is crap and will die any minute.” (That was actually the name of my savings account; the stupid computer was crap and did eventually die, and I had enough money to go buy a new computer. The system worked!) I think at one point I had 16 different savings accounts? A few times a year we touch base and spend an hour or two looking at Mint together (which has all of our accounts linked up) to be sure we are on the same page about things, and make adjustments then.

Auto-debit is absolutely my best friend. On the days my paycheck is set to deposit I have money scheduled to be transferred into my various goals: $15 here, $20 there, for every dollar beyond what my monthly expenses require. They are all slow to accumulate because I don’t have a lot to put in, and that little bit is divided in a lot of directions, but it [has] helped me feel like I was building towards something. That strategy definitely helped me stay on budget: if I needed something beyond what we had allocated, I had to go out of my way to transfer money out of my savings. That was usually enough friction to keep me from impulse-buying a new dress or something.

 

Now that you’ve gotten rid of this burden, how will your financial lives change (or not change)?
You say burden metaphorically, but it has been two weeks since I closed out my student loan account and it honestly feels like a physical weight has been lifted. Before it felt like we were walking on leaves and branches draped over a pit trap, and any misstep would mean falling into disaster. Now we’re on even ground. That difference, that stability, feels momentous. I don’t think we’ll change our spending or savings habits. They’re pretty well ingrained now, but we’ll be able to keep the savings we slowly accumulate instead of throwing it into the pit. GOOD RIDDANCE, PIT!

I think the biggest change is how I feel about risk. I have been as financially risk-avoidant as anyone in a creative career can be, which has worked out well in this arena but has put a bit of a damper on building momentum in my creative life. I’ve prioritized work with a predictable income over time to work on my art practice, which has meant a herky-jerky output. I think I’m going to switch that order around; it feels like a safe time to take a big risk. Now if I stumble, I’m still on solid ground, you know? (PIT METAPHOR!) I think 2014 is going to be a good year.

 

 

Marnie Galloway is a comic artist, illustrator, and printmaker in Chicago, Illinois. Her first book, In the Sounds and Seas: Volume I, won a 2012 Xeric Grant and was nominated for the 2013 LA Times Book Prize for Best Graphic Novel. She is a co-organizer of Chicago Alternative Comics Expo; her illustration and comics clients include Saveur Magazine and Chicago Zine Fest.

Jacqui Shine is a writer with love and attitude. She lives in Chicago, and she thinks you are perfect and beautiful.

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49 Comments / Post A Comment

LookUponMyWorks (#2,616)

Wow! My hero.

coastalelite (#2,528)

This is super inspiring! Congratulations, from someone with $52,000 left to go…

CubeRootOfPi (#1,098)

Wow!

Also 8 classes at once? Whoa.

WayDownSouth (#3,431)

I liked this post quite a bit. There have been any number of discussions about whether to make small impulse purchases. One argument is “I owe $100,000 so a $5 iced coffee isn’t going to make a difference”. As this post demonstrates, every little bit helps. Not making the small impulse purchases adds up over time.

DebtOrAlive (#5,233)

@WayDownSouth Ummm… Did you miss the part where she (rightly and much appreciated!) attributed her accomplishment to “a hell of a lot of luck and privilege?” You know the part where they had no illnesses or family crises that required quitting, and both affordable housing and stable well-paying jobs?

I mean, major (MAJOR!) props to her for filling in the debt pit, but as someone currently filling in my own, living in the hood–which to be sure, I love–and doubling my salary has done far more for those efforts than cutting out iced coffees.

#JustHaveTheLatte

WayDownSouth (#3,431)

@DebtOrAlive I suppose it all comes down to our priorities and how we choose to spend our money. My wife and I paid off our $270k mortgage in seven years. A significant contributing factor was eliminating impulse buys. We put a greater emphasis on living debt-free than spur-of-the-moment purchases. I liked how the writer also chose to make similar decisions.

If you feel differently about buying iced coffees, then by all means please do so. I’m not restricting your choices — you can do whatever you think is best. I’m simply saying that I liked how she and her husband made their decisions.

DebtOrAlive (#5,233)

@WayDownSouth Congratulations on crushing that mortgage in 7 years. Really. I’m sure that took hard work and prioritizing that over impulse purchases. But you know what really helps paying off a $270k mortgage? A job and/or income stream that allows you to pay a $270k mortgage.

Personally, I think the vast majority of iced coffees are disgusting, so I don’t buy them. But my point is that the focus on the latte/iced coffee/yoga/etc distracts from the real issue: that often people don’t have a debt problem, they have an income/job problem. Cutting out coffees is not going to pay 48k in student loans, let alone a 270k mortgage. Does it help? Sure. But let’s not be distracted by such a red herring.

EDaily (#4,396)

@WayDownSouth What also helps is having parents who are able to take on the minimums of your student debt payments the first year after you graduate college while you figure out how you’re going to take over those payments. Having that privilege in the first place helped a lot more than cutting out iced coffees did. Marnie and her husband deserve all the credit for doing what they did, and she could have easily left out all these little details and made this into a “bootstrap” story. But as she admits: NOPE.

Adouble (#4,640)

@DebtOrAlive I don’t think anyone is saying that an income stream isn’t the most important part of paying off debt. And avoiding bad breaks like major medical expenses is huge too. That said, this post read to me as being about a couple avoiding spending anything more than they absolutely had to in order to pay off their debt, so I think WayDownSouth’s point is entirely fair.

Sloane (#675)

@EDaily If her mother hadn’t paid, the author would have paid off her debt in 5(ish) years instead of 4. The point is that 2 adults lived on 25K a year – they sacrificed a lot of stuff (big and small) to live that way.

WayDownSouth (#3,431)

@DebtOrAlive We agree that you need a sufficient income to pay off a loan. The money has to come from somewhere. The more you make, the more you can pay off.

What I liked about the original post was how the writers deliberately prioritised their spending. So many times on the Billfold (and elsewhere), we read stories about how people make a good amount of money that just disappears. Instead of making larger payments, they go on very nice vacations, etc. It’s certainly their right to spend their money as they please, but then they’re paying quite a bit more interest, etc. I see it happen in real life as well.

At the end of the day, I think you and I fundamentally agree (e.g., more income is better, controlling expenses enables you to manage your money better). I always enjoy reading your comments.

Sloane (#675)

Awesome job! I paid off 40K in 3 years. Heidi Moore would say that I lived like a monk, but I would say that it was totally worth it.

dotcommie (#662)

i’m not paying off loans now, but i’m choosing to live a mad life in order to avoid taking out an extra $40k+ in loans–I’m in grad school while working full time, and my job is helping me pay for it. i hope when i finish i will feel like it was all worth it! in the thick of it, i feel insane.

rhinoceranita (#5,858)

This is amazing to me. I have something like $90k in student loans, making a LOT more than $25k/year and barely keeping it together.

This was so great to read, and I really enjoyed Marnie’s final comment about risk-taking as an artist. My debt has made a big impact on the way I’ve structured my artistic life, and I would love to see how Marnie’s post-debt decisions unfold. Maybe we could have a follow-up piece in a year or two?

I’m also curious about Marnie’s many savings accounts. Was she able to have/build savings while paying down her student loans? I struggle with the question of whether to have savings while paying down debt, and I’d like to know Marnie’s method/philosophy on this question.

Marnie (#6,008)

@FinancialAidArtist Hey there! I built savings while paying down student loans by cannibalizing my savings. I’d accumulate $ in my project-specific accounts and then every few months look at the big picture and say, like, “I think my computer won’t die for another few months, so I’ll grab $200 from the top of that account and put it in to debt.” There were some accounts that had specific savings goals, so when I met them I could put that extra $ per month in to debt. There were a lot of micro-movements that weren’t very carefully orchestrated until recently. Best of luck on your creative endeavors!

@Marnie Thank you! That makes sense. I also want to add that I’m doubly impressed with you for living so lean in Chicago. I just moved away from that cold city, and I had a really hard time not treating myself to its many culinary/beer/cocktail attractions. It felt like it was the only way to make the weather bearable. I’m very impressed with your fortitude and self-discipline!

Taylor (#1,339)

@FinancialAidArtist @Marnie That seems like a really logical and workable system. I’m doing the debt+savings thing right now too- the balance I’ve struck is to try to save enough to manage unpredictable costs as they pop up without going back in to debt, but it’s definitely intended more as emergency savings than long-term-goals savings (which I can focus on when the debt’s gone.) Right now this means that of the money I have to work with, I put 25% in savings, 75% to debt. At some point I’ll probably hit a savings level that I’m comfortable with and focus 100% to debt unless the savings gets dipped into and needs topping off.

I would also love to hear how others handle the savings thing! And thank you for sharing your story, Marnie!

A. This was really good! B. We have two friends in common, says FB (chicago!). I had to check to see if I knew anyone who knew anyone so level-headed!

I thought this was really great, for many reasons, but especially the remark that choosing to live below your means is privilege in and of itself. I hadn’t thought about that, but it’s totally true.

aproprose (#1,832)

I’m in the same boat with taking fewer artistic (I’m an actor!) risks until I pay off my debt. But I’m on the cusp of a big day job career move that will help me pay down my debt in just 2-3 years. It will be worth it to have more freedom and be set up for financial security later.

Go you! My husband and I paid off his $20,000 debt in two years by living on $12K per year while I was in grad school and he was a VISTA volunteer. One thing that made a huge difference for us: we didn’t go car-free like Marnie, because his job was in rural Indiana, but we shared a car then and all the way up until our separation 15 years after, when ALL of our friends had one car per adult. Along with other careful budgeting, it enabled us to pay off our mortgage in ten years too.

Marnie! I have a bunch of your prints hanging in my dining room. I didn’t realize why your name was familiar until the very end, but I’m glad this is all working out.

Marnie (#6,008)

@wallsdonotfall High five, friend!

whiskeybot (#6,007)

This is so inspiring. I have about 23K in undergrad loans (4 separate loans), and luckily none of them have bonkers interest rates. I am saving aggressively, but I can’t wait to fill the pit in and actually have my savings accumulate instead of disappear down a deep hole. This article helped me feel less alone, and that I’m on the right track–the sacrifice will be worth it one day! Thank you for sharing, Marnie!

Marnie (#6,008)

Hey everyone, you’re all so nice! I was terrified to read the comments and you’re all the best. Thank you for the well wishes!

zeytin (#4,005)

So her husband got into a “great PhD program” that was not funded at all? Doesn’t sound that great to me. But they made it work, so I guess it turned out okay. I generally tell undergrads who ask me for advice to not consider unfunded PhD programs.

chevyvan (#2,956)

@zeytin It happens. My PhD program was consistently ranked #1 in the country and they didn’t guarantee funding for everyone. I chose it over several lower-ranked programs that would have guaranteed funding. I still got funded even though it wasn’t a sure thing from year to year. To be honest, I’m still not sure if that was the right move, but hey, I have a PhD and a decent job and I’m very well trained.

XianAer (#6,009)

Marnie–congrats on publishing your graphic novel (as well as paying off your debt!) I’m a grad student studying folklore and graphic novels, and your work sounds fascinating–where would be the best place to look for a copy of “In the Sounds and Seas”?

Marnie (#6,008)

@XianAer thank you so much! My book is available for sale on my etsy store: https://www.etsy.com/shop/monkeyrope

Eric18 (#4,486)

Congrats on a major accomplishment. That must be one heck of a weight to get off your shoulders. Hope others who read this are able to follow in your path.

Poubelle (#2,186)

Yes, I know this isn’t the point of the article, but: How was the whole “bike to work” thing this past December & January? (For that matter, most Julys?)

@Poubelle I live in upstate New York and bike through the winter most years. (Not this year because I had pneumonia, unrelated to my commuting habits.) I bus, drive, or carpool when the roads aren’t clear, but even in a snowy winter like this one, roads are clear (narrowed, but plowed) most of the time. You learn to dress for it.

Poubelle (#2,186)

@Sarah Rain@facebook It’s not about the snow (Chicago’s pretty good at plowing), it’s about the record crazy cold this past year.

jacqui (#6,028)

@Poubelle my recollection is that marn bikes less than she used to, partly because she and tom commute together.

@Poubelle You learn to dress for it. Like, with Thinsulate balaclavas. And moving helps you stay warm, and my 5-mile commute only takes around 25 minutes (and I’m slow). It actually can be easier for me to stay warm biking than while walking the dog.

Waffles (#6,029)

@Sarah Rain@facebook Yeah bike output levels are around the same rate (for me) as cross country skiing, so I just use the same gear. FYI people bike in Canada and Alaska in winter too. No bad weather, just bad clothes. (Although yes there is bad weather but you can deal with a surprising amount when you have goggles and good tires)

halloliebchen (#5,373)

This is inspiring me to a) buy a bike and b) start biking to work to save the 60 € a month. Now if only I could get my boyfriend on board …

@halloliebchen debt in Germany oder? that’s interesting…

halloliebchen (#5,373)

@Fums Babske@facebook Technically, it’s debt that I acquired studying in the US that I’m paying off in Euros

SterlingCooper05 (#2,529)

Awesome job and never discount the fact that it is incredibly difficult to sacrifice like you did! (even if it is a luxury to choose to live on less than you make)

I just calculated that I should have roughly paid 72K in 5 years, but not out of choice, per se, but because that’s what I had to. Still have about another 72 to go. Sad panda.

beet hummus (#946)

Ok now this makes me feel bad that I haven’t paid off my measly $5,000 in the 5 years I’ve been out of school…
(FWIW it’s under $2K now!)

Frances (#6,015)

I did this too, $48k (not including interest) in student loans in just over 7 years. I’m not married though, so I mainly just tried to live below my means as much as possible and when I changed jobs, keep living at the smaller salary I was used to and throw the rest at student loans. I had been paying steadily but saving a lot and then I just made the decision that it was ridiculous to be saving at .5% and paying 5% in interest on loans. It feels so good!

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