Like many millennials, Jordan Arnold graduated from college five figures deep in student debt. Unlike most of his peers, he paid off all of his loans less than a year after graduation.
This is his story, as told to MONEY reporter Kara Brandeisky.
Jordan Arnold, 22
Occupation: credit analyst
Initial debt: $23,150
Amount left: $0
When he started paying it down: May 2013
When he became debt-free: March 2014
How I started building debt
I always knew I was going to go to college, though I figured I’d go to community college for a year or two because it’s cheap. But my parents started talking to me about this private Christian school, Indiana Wesleyan in Marion, Ind. I took a visit, and I really liked it. It’s only like 3,000 students on campus, so it’s a tight-knit community.
Tuition and room and board was about $31,000 a year. And the first year I hadn’t applied for federal student aid, since I didn’t commit to the college until about 10 days before classes started. I got some scholarships and a grant from my church, though. So, ultimately, I owed approximately $9,000 that first year.
Getting to $23,000
I could only borrow up to $5,500 in subsidized loans from the government each year, so I worked to cover the rest so that I didn’t have to take out private loans. I also graduated in three years, which helped.
Still, altogether, I had to take out $15,150 in subsidized federal loans and $2,000 in unsubsidized federal loans. I borrowed another $6,000 from my parents.
My uh-oh moment
In the fall semester of my senior year, I remember being kind of nervous. I knew I had to start paying my debt within six months. It’s stressful, when you don’t have any money. And I heard all these stories about college students who get out of school, they have all this debt, and they can’t find jobs.
Getting my debts paid off was important to me. I didn’t want to get the point where I’d have to be paying student loans for another 10 years. Right now, I’m single. I don’t have any dependents that rely on my income. But I didn’t want to have these loans over my head when I’m trying to feed a family and put a roof over their heads. It’s not just about me, it’s about my future family.
My first step out of the hole
Luckily, I got a job right out of college at an insurance agency (I had majored in finance). I was on salary, and it was pretty good: $36,000 plus bonuses.
I didn’t have to pay my student loans for another four months, but over the summer I decided to go ahead and start making payments before interest began accruing.
I actually moved back in with my parents—which is hard when you have been out on your own. But I didn’t really have a reason to move out. And I was blessed that they actually preferred me to live there because I could help out around the farm they own, baling hay or feeding the horses. Living at my parents’ place for free was a lot better than having to pay $400 or $500 a month for rent.
Kicking it into gear
About four months into my new job, I picked up a second job, delivering for Pizza Hut, to help pay off my debt. I would start work at the insurance agency at 8:30 a.m., change in the bathroom at 4:50 p.m., get to Pizza Hut by 5, deliver pizzas until about 9:30, get home around 10, then shower, eat, and go to bed.
My monthly take-home pay from the insurance company was about $2,200, and I made about $1,000 at Pizza Hut. After gas, car insurance, tithing to my church, entertainment and food, I could put about $2,000 towards my debt every month.
At that rate, I was projected to pay off my debt in May 2014. But I got a $3,000 refund on my taxes, and paid off the rest of my debt with that.
How I celebrated being debt-free
I made my last payment the first of March, then I went to Florida with some friends two weeks later. It was pretty rewarding after a 10-month battle. I had probably worked 65 to 70 hours a week for seven or eight months. It was exhausting, but it was worth it.
What I’d tell someone else in my place
If you have a game plan, you can accomplish your goals. I have an account on Mint.com, that’s where I kept my budget. That’s a big part of it—just seeing your progress and knowing you’re getting closer.
Also, have an emergency fund. While I was paying off that debt, I had a small car accident. I was delivering a pizza, and I hit something in someone’s driveway. It cost me about $760 to fix the car. But I had a $1,000 emergency fund, which was kind of a buffer that I kept because life happens.
Finally, don’t be afraid to move home if you have to. That was a big part of how I got out of debt.
My plan for the future
I quit my Pizza Hut job in April after paying off my debt, and now work at a bank analyzing commercial and agricultural loans, which is more in line with what I wanted to do.
I actually haven’t moved out of my parents’ house yet. Instead I’m saving up for a down payment on a house. I’m putting away 50% of my take-home income for that, and I should have a down payment by mid-summer. I also started investing. I started a Roth IRA, and I plan to max it out this year.
Staying true to myself
Some people have made the argument, ‘Maybe you shouldn’t have paid off the debt so fast because the interest rate is cheaper than what it will be for you to borrow for a home.’
That makes sense in my head, but in my heart, I didn’t want this hanging over me. I want to be responsible with my money and build a strong foundation.
The bottomline is the plan to get a great education without borrowing more than absolutely necessary then creating a schedule for retiring the debt. Pinching pennies only hurts for as long as you take to pay it off!
Looking for debt reducing strategies? Stephanie can point you in the right direction. firstname.lastname@example.org or call/text 610-212-6679.