From 70k to 5k – Student Loans

I am so happy right now I could just spit – don’t worry…I won’t. But I really am infused with such a sense of relief and euphoria that I just have to share my news with the world. I just finished the process of consolidating my student loans from my Masters Degrees (yes, that’s plural), getting income based payments, and dropping my monthly payments from $783.53 to $47.83 a month!!! AND…with the Public Service Loan Forgiveness option…I only have to pay that for 10 years and the remaining balance will be forgiven as long as I stay in a public service job (teaching…hello!). So…I went from paying $70,000+ to paying just over $5,000 for my student loans! Wooooo Hooooo!

This used to be me…

But now….this is me….

And now I’m going to share with you how I did it.

  1. Look at how much money you make. It matters. While filing taxes with my husband, we realized that I was never going to qualify for Income Based Repayment (this sets your loan repayment amount based on your income). So I filed Married filing separately. Bingo…I qualified. NOTE: talk to your tax person about this and be VERY sure that you and your spouse (if you have one) agree that this is best. It was for us.
  2. Consolidate your student loans under the Direct Loan Consolidation program with the government. You can find their website at All the important info is on their website. Call them if you don’t understand what you are doing…they are very helpful. Be sure to select Income Based Repayment as your repayment option.
  3. Follow up with the paperwork (and don’t miss any payments on your loan with it’s current holder until you hear from the Direct Consolidation people). I had to follow up twice because my loan summary sheets were wrong, but each time the people were helpful and friendly and took care of my problems right away.
  4. When all is said and done…you will get a Loan Summary Sheet and be notified of your first payment date and amount. Go back online to and set up automatic payments…it takes money off of your interest rate and will ensure that you do not default on your loan (you cannot get forgiveness for a loan you default on)…AND you have to make 120 payments before forgiveness if possible…if you miss or defer payments…it will just take you that much longer.
  5. At the end of your 120 payments…request loan forgiveness. Here are some links to help you with that!
So that is it in a nutshell! And I can’t tell you what a huge burden…both financially and emotionally….has been lifted from us! Woo hoo! And just in time for me to spend all that money I saved on my daughter’s wedding! ha ha! Hope this helps some of you!