Debt-Free Living

Student Loan Repayment for Live a Better Life

This is a guest post from our friend Millionaire Mob, who paid off $67,000 in student loans in only 3 years and now that his student loan repayment is over, he focuses on investing in dividend growth stocks. He helped thousands of people bettering their financial future through passive income and dividend investing.


Student loans are crushing.

There is little more demoralizing than graduating school and landing your first gig to be hit with a monthly student loan bill of $758 per month!

Wait, there is something that is more demoralizing.

Imagine looking under the hood and finding out that a few of those student loans were accruing interest while you were in school at a rate of 10.50%… OUCH.

After researching a bit and contacting my family, I found out I had $67,000 of student loans.

I was in shock. How could I graduate college and be stuck with bills that limit my ability to save? Why did I even go to college? I couldn’t go back in time. I had to do something right away to get rid of my past debts.


How did I pay off all of my student loans in 3 years?

Honestly, I had to do a lot of research and use a number of tools to figure out how to repay debt effectively. I was obsessed and determined to pay off my student loans as soon as humanly possible.

To get there faster, I created a plan to know how much I should pay each month and what debt I should attack first. You can create a similar plan yourself including:


  1. Reducing your expenses.

Do not go out to eat.

Live within your boundaries while still enjoying life.

Some simple things that are very effective over time are preparing meals, not wasting items and use what you own.

2. Prepare a spreadsheet of your debts on how to economically attack your debts.

Do you know your personal cost of debt?

Have you looked at refinancing solutions such as SoFi to reduce the interest rate on your student loans?

3. Hustle to increase your income.

We live in a digital age and making money online has never been easier.

I love the idea of building three different solid passive income streams. The average millionaire has 7 different forms of income.

4. Continue to focus on your career.

Don’t bite the hand that feeds you.

This is a majority of your income, so continue to focus on being the best at what you do.

A raise and/or promotion can go a long way.


There are two methods that I like to use when thinking about paying down debt: the snowball method or the avalanche method.

Personally, I like to repay debt with the highest interest rate first. This is the most economically sound way to repay debt and saves you money over time!

Here is a simple example of how I would create a table to understand my personal cost of debt:


Debt Debt Amount Interest Rate Weighting (Debt Amount Divided by Total Debt) Interest Rate x Weighting
Student Loan 1 $10,000 6.0% 40% 2.4%
Student Loan 2 $15,000 4.5% 60% 2.7%
Total $25,000 100% 5.1%


Based on the table above, I would prepay my 6.0% interest rate debt as much as possible while making normal scheduled payments for the 4.5% interest rate debt.

If you are struggling with the income side of things, perhaps moving in with your parents is a prudent move. I was always told to build my own future (must be my Midwestern roots). No one ever likes leeching off of someone else, so this may be the last resort for you.


To pay down debt you must be angry. Think of your debt as an overhang or a hindrance to your freedom.

Do what you can to eliminate it.

Work hard in your early years. Your future self will thank you.


Refinancing student loans with SoFi can save borrowers

$4662f a month—or $30,0692 over the life of the loan.


Student loans repayment


Pay down debt or invest

Once you have paid off your highest interest debts, what should you do next?

I like the idea of paying any debt that is less than 5.25% interest rate as fast as possible. Once your personal cost of debt is below that threshold, start investing as much as possible.

The stock market has averaged around 6-7% annual total return over the long-term, so by investing instead of paying down debt you are in fact earning an incremental profit (or less opportunity cost on your money).


The best time to plant a tree was 20 years ago.

The second-best time is today.


Keep in mind the stock market is volatile. It does not return 6% every year.

Some years the return on the stock market is greater than +15% and others it can be -15%.

You must understand that you are investing for the long haul. Do not invest to get rich quickly. This is a long-term goal.


Successful investing is boring

Once I paid off my student loans, my strategy for investing was to focus on dividend growth stocks that participate in a no-fee DRIP plan for our Roth IRA. I have an excellent list of no-fee DRIP stocks for you to get started.

I like that strategy for my Roth IRA since all of my capital gains are tax-free. My contributions to my Roth IRA are made post-tax. If I can realize the benefits of compound interest over a long period of time through dividend reinvesting, I should have a sizeable nest egg by the time of retirement.

In addition, I seek out to build a dividend portfolio after-tax for consideration of increasing our income.

Should you completely shut off investing while you are paying down debt? It depends on your income flexibility. I always suggest maxing out your 401(k) contributions and Roth IRA. For the current year, it is $18,000 and $5,500, respectively.

After you max out both of those, then think about debt repayment ability and after-tax investing. If you cannot max out these and pay down debt, focus on repaying your debts first. Then, move onto your investment strategy.


Paying off your student loans is an uphill battle. The top of the mountain is always the sweetest (and has the best view). With a prudent strategy and discipline, debt-free living is within reach.

Once you do that, you will be amazed at how much flexibility your life is.

What are your favorite student loan repayment strategies? Do you pay down debt or invest? Leave a comment below. I’d love to hear from you, Millionaire Mob.



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