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Micah H., right, with her husband and baby.
Courtesy of Micah H.
33-year-old nonprofit worker Micah H. paid off six figures of student loans in 13 years.
She started paying them off while she was in college, then continued for the next several years.
She used seven strategies to become debt-free.
Micah H. started paying off her student loans during her freshman year of college at UC Berkeley in 2007. “I remember going to summer orientation. Everyone was exchanging Facebook information and numbers, but for me, I was like, ‘I need to go to the financial aid office because I need to understand how to pay for school.'”
After studying social work in undergrad and grad school, Micah, who shares her financial journey on her YouTube channel, Adulting with Micah, started working at nonprofit organizations. For the first four years of her career, she planned to apply to have her loans forgiven through the Public Service Loan Forgiveness program.
But, after watching her coworkers get rejected from PSLF over and over, she decided to change course and focus on paying off her student loans by herself as quickly as possible.
As of May 2020, the 33-year-old is debt-free after paying off $115,335 worth of student loans.
Here are seven strategies Micah used to pay off her student loans.
1. She understood that the debt-payoff process is a marathon, not a sprint
When Micah sees other debt payoff stories on social media, she says, “Sometimes, when it comes to debt payoff, you hear, ‘I paid off $200,000 in two years,’ and it’s just like, ‘Whoa! You must have had a $500,000 job.’ That’s not normal for most of us.”
In contrast, Micah paid off her student loans while making $100,000 a year or less. Here’s how much she earned during the last few years of her debt-payoff journey:
Months and yearsBase salary (without overtime or side hustles)August 2015 to May 2016$50,000May 2016 to March 2017$65,000March 2017 to September 2019$73,000September 2019 to May 2020$100,000
“It’s a gradual incline,” says Micah. “I had been working on this project for 13 years, since fall of 2007. It’s a marathon, not a sprint.”
2. Micah started paying off her student loans using her work-study income
Students who exhibit financial need might qualify for work-study programs, part-time jobs that pay students directly, though they have the option of using that money to pay for education-related costs.
Micah worked at the dining commons at UC Berkeley. She used her income to start paying for the $13,000 in Parent PLUS loans that her mom took out to support her education.
3. She got a side hustle as a babysitter and worked overtime
Once she was finished with both undergrad and grad school, Micah started working for the City of New York. She started working overtime and used the extra cash to pay off her student loans. Micah also got a side hustle as a babysitter, earning an extra $400 a month on average.
According to records reviewed by Insider, Micah paid up to $2,000 extra per month on top of her minimum payment of $938.
4. She refinanced her student loans to get a lower interest rate
Since Micah worked in the nonprofit sector, she qualified for student-loan forgiveness through PSLF. However, she decided to pay off her student loans on her own because she noticed that her coworkers weren’t getting the forgiveness they were promised.
Leaving PSLF behind, Micah refinanced her student loans through SoFi to lower her interest rate from 6% to 4%. Her monthly payments stayed roughly the same, but the lower interest rate shortened her payment time. Every year, Micah applied to refinance her loan to lower her interest rate even more.
Her minimum monthly payments eventually dropped to $638 from $938, though she kept making extra payments each month toward the principal balance.
5. Micah packed her lunches and found low-cost alternatives to getting meals out with her friends
“At the time, I was working in Tribeca,” a pricey neighborhood in New York City, “so I was paying $15 per salad. I can make salad at home and bring it to work.” Micah used the money she was saving on eating out to pay off her student loan debt faster.
Instead of getting expensive brunches with her friends on weekends, Micah found other ways to socialize. “I’m very social. My friends and I would just utilize free resources, like walking through Central Park.”
She also asked her friends if they’d want to come over for a home-cooked meal instead of going to brunch, or if they wanted to pregame with drinks at her house instead of paying for drinks at the club.
6. She moved in with her then-boyfriend to cut costs
At the time, Micah was living in a studio apartment in New York City and her rent was $1,100 a month with an extra $500 for utilities. She moved in with her then-boyfriend (now-husband), Demetrius, and they split his $1,500 housing expenses for a one-bedroom apartment in half.
Once her housing costs were down from $1,600 to $750, she was able to put the $850 savings each month toward her student loans.
7. Micah rewarded herself every time she hit a major debt-payoff milestone
“I still treated myself throughout this journey because I felt like, to just do this for three and a half years, I’m gonna go mad,” says Micah. After reaching a $10,000 milestone, Micah booked a trip to Japan to reward herself for her progress. On a smaller scale, she splurged on her $15 salad every other Friday to feel like she wasn’t depriving herself.
“I needed to still have small wins to keep me motivated, because if not, it could be a very lonely and very defeating process.”