Student Loan Debt

Dentistry, Lifestyle

Just FYI, this will likely be a recurrent topic on my blog. In some form or another, I will write about matters of finance.

So, admittedly, I do not live a glamorous lifestyle. We certainly spend money on the essentials in life; we buy all the food and clothes we ‘need,’ we both have reliable transportation, and we isle shop at Costco and unwittingly rack up those $100-200 bills a couple times a month.

When I started dental school, in 2007, I sat through an insanely brief presentation on student loans, our tuition costs, and some repayment options we may have when we finished. Throughout my 7 years of dental training, I never gave that presentation or my debt burden a second thought. I obliviously signed the paperwork to qualify for loans, I ensured my tuition was being paid; but terms like ‘compounding interest’, ‘principal’ and ‘deferred payment plan’ did not really resonate with me at the time. I wish it had.

I accrued well over $200k in student loans over that time period. I remember in 2014, sitting in-front of my work computer during my lunch break just feeling so stressed out and overwhelmed. I had finally seen my overall tuition payback amount, compared it to my bi-weekly paychecks and just felt so helpless.

Two websites saved me.

The whitecoatinvestor.com. My brother, the physician, luckily turned me on to this website. It was JUST what I needed. I even received his book one year as a Secret Santa gift. Authored by an E.R. doctor that discussed personal finance issues: student loan debt and refinancing, saving for retirement, and investing, among other things. The site has become immensely popular, he’s grown from just blogs, to podcasts, offering online courses, and authored additional printed books. It certainly may not be for everyone, he found a niche and speaks to a specific audience of high-income earners; but the philosophy works across the board, and the premise of saving, investing, and quickly paying down debt should be universally followed.

Also mint.com. That overwhelming feeling I described earlier, came largely from being unorganized with my finances and not really having a short- and long-term plan. I will say, this website a) has a lot of advertising and b) invokes a lot of trust out of its users in that, a lot of highly sensitive account information could be potentially compromised. If you can bring yourself to trust their encryption algorithms, then this site offers fantastic budget tools, income vs. expense tracking, and even allows goals to be established.

I guess it is worth mentioning, I have no financial interest in either of the sites above. In fact, if anything, I would like to extend a thank you to Dr. Jim Dahle (founder of WCI) and Intuit (maker of Mint.com) for helping me get on a better financial path.

Once my wife and I put a plan in place; monitored spending, set goals, budgets, basically used many of the tools on Mint, we started chipping away pretty quickly at the debt. When my wife decided in 2013 to go back and earn her Pharm D degree – only to graduate 3 years later with yet another $200k debt to our household – we at least now had a better understanding of what it would take to manage that momentous amount.

In August 2017, we submitted our last payment to the lenders for our student loans.

A couple of things I attribute our quick payoff to:

  1. Re-financing our student loans. At the time, our interest rates on our federal student loans ran about 6.8% to as high as 7.4%. Thanks to the advice of WCI, I immediately found a company to re-finance with and cut those rates in half. Another approach I took was, in the process of re-financing my home loan to a better interest rate, I took equity out of the house and put that cash towards a significant portion of my student loan principal.
  2. High-income earning. I think it is mathematically infeasible to pay off $400k in 3 years any other way. Fortunately we pursued professions that pay relatively well; supplemented by a disciplined lifestyle and controlled spending habits, we were able to pull off the impossible. In case you are wondering, we have a joint account and unanimously put money towards any and all debt.

To this day, we live comparably to where we were in 2017. We still set goals and we still control spending. Now money that once was going towards student loan debt is much more appropriately being redirected to saving for retirement, a down-payment on a dream house, helping our kids with their own college tuition costs, charity, etc.

You know, I do remember one useful thing from that financial loan seminar at the beginning of dental school. He said,

“If you live like a dentist when you’re in dental school, you will live like a dental student when you’re a dentist.”
Christopher A. Kypuros

I am not yet where I want to be financially. I still have to work for a living. But I am blessed to not have a mountain of student loan debt weighing on me everyday. Student loan debt is out-of-control in this country. There was an actual game show about it for goodness sake (Paid Off with Michael Torpey)!

Dave Ramsey had a bell he would invite guests that recently paid off their debt to come and ring. I have always wanted to ring that bell. However, just the sheer feeling of living stress-free from student loan debt is in and of itself an amazing, cathartic reward.

I would love to hear your achievement in paying off debt. And I would be happy to answer any questions you have about my own story. Thanks so much for taking the time to visit and read this post!