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How I paid off over $200,000 in student loans and lived my life while doing it

By: Jessica Medina

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I graduated from Columbia Law School with over $200,000 in student loans and one of my favorite anniversaries to celebrate is September 1, 2021…the day I made my last payment.

It was quite the journey, and along the way I raised twin boys as a single mom, saved for retirement and my kids’ college education, married my dream partner, and left the law to become an Accredited Financial Counselor.

As a former lawyer turned Accredited Financial Counselor, many of my clients come to me with similar law school debt amounts and a key part of what we do together is figure out the right student loan repayment strategy in the context of their overall financial picture.

Repaying your loans ASAP is always an option, but it may not be the best option for everyone — it certainly wasn’t for me!

So how did I do it?

Let me, of course, give the disclaimer that my circumstances and financial choices were personal and before you decide to follow in my footsteps you should really examine your own numbers, feelings, and financials to make sure the path you choose is best for you. Or maybe ask a professional (hint, hint).

But with that said, for everyone who loves a good case study, here’s the detailed breakdown of my own path…

Graduated in 2004 with over $200,000 of student loans (mix of federal and private)

This was before Grad PLUS loans were a thing, so if you wanted to go to a school like Columbia ($50,000 tuition) and they didn’t offer you a scholarship then you took out private loans.

I also brought loans from undergrad and tacked on a bar loan to float me the summer after graduation (I had to feed those twin boys while studying, right?).

Yes, I took out ALL the monies!

$120,000 in private loans

$86,000 in federal loans

Upon graduation, it was suggested that I consolidate my federal student loans and this new consolidation loan stood at a fixed interest rate of less than 2%.

This was a huge boon for those who graduated in 2004, interest rates for consolidation loans were insanely low and I took advantage.

Consolidation keeps your loans federal, it just puts them all together with one new interest rate that is the weighted average of all your loan interest rates. (This is different from refinancing which creates a new private loan — here’s a blog post on when refinancing federal loans may be a good idea.)

So this consolidation was a good deal.

Of course, in 2004, “federal” loans were not all owned by the Department of Education.

I had FFEL loans, so they never qualified for the eventual PSLF and forgiveness programs, or that lovely CARES Act relief many of my clients experienced during the pandemic — check out this blog post for tips on forgiveness program pitfalls to avoid.

There is a process, however, in which you can convert your FFEL loans into Direct (true federal) loans and it’s worth examining if you have some of these older loans and are pursuing forgiveness. I never even realized this was a thing and is probably something I would have considered had I known it was a possibility!

*As of the writing of this post (January 2024) there is substantial relief available for folks pursuing federal student loan forgiveness, either through PSLF or through income driven repayment, if they consolidate their older loans with their newer loans prior to April 30, 2024. Check out information about the IDR Account Adjustment or reach out to me for more information.

Made minimum payments while funding other financial goals

Even though my federal loans were at less than 2% interest and my private loans were often below 5% (variable interest rate), the 10-year standard plan estimated payments were just too much.

And I went straight into Biglaw!

Between raising my little family, living in the DC metro area, and my overwhelmingly large debt load, I couldn’t manage more than the lowest monthly payment possible.

So I signed up for the 30-year Extended Graduated payment plan and held my breath hoping that with salary raises I’d be able to make more headway in the future.

It wasn’t lost on me that I had a mortgage-sized debt with no house to speak of.

That being said, I did make sure I was contributing something to my 401k as soon as I started at the firm. I also felt very adamant about saving for my boys’ college education and immediately set up a 529 and made small contributions each month. And I increased my 401k and 529 contributions as I became more senior and I’m so glad I did!

(I also want to note that I hired a very reasonably priced nanny when I was a junior associate which made daycare actually affordable. I don’t think I would have been able to put two infants into a fancy DC daycare AND do anything else money-wise in those early years.)

I didn’t really pay attention to my student loan balances, but I can tell you they didn’t move that much given my minimum payments.

I also purchased a townhouse in Alexandria, VA in 2011 (so after the housing bubble and crash) and the mortgage was definitely cheaper than renting in DC.

Homeownership is a big decision but I felt ready and I knew that real estate could help open up other opportunities in the future. And I really wanted the boys to have the stability of going to elementary, middle, and high school with the same kids since I didn’t have that experience.

Moved to the SEC and took advantage of the federal student loan repayment program

After eight years at my firm, I knew I wanted out (that’s an entire other post!) and I landed at the Securities and Exchange Commission in the Division of Enforcement in 2012.

The SEC has amazing work benefits including being one of the top places for attorneys to get help paying off their federal student loans. They participate in the Federal Student Loan Repayment Program which offers up to $10,000 of loan payments per year for up to 6 years (or a max of $60,000). This covered my minimum payments on my federal student loans which provided opportunity for me to focus on other things.

Got aggressive with my payments once I knew I no longer wanted to be a lawyer

I took advantage of the repayment program and used the break on my federal loan payments to really ramp up my private loan payments.

Before I left the SEC, I was paying three times the minimum payment and actually seeing my principal balance decrease each month — for the first time ever! At that point I knew I wanted to leave the law entirely so I had to get aggressive.

The SEC also offered wonderful retirement contribution matching so I was able to save more for retirement without all the contributions coming from my paycheck. That certainly made the 50% pay cut from private practice to government easier to stomach (and my boys appreciated the occasional dinner out)!

Left the law with student loan balances and just continued making payments

I wish I could say that I paid off all my law school debt before I decided to no longer be a lawyer, but that just wasn’t my reality — and I didn’t want to wait.

I had been dealing with student loan debt for nearly 15 years already and it was kind of like this annoying gnat flying around, but it didn’t change my overall life plans. It was manageable, and I knew there was an eventual payoff date.

By this point, I had been planning my exit from law for over five years.

A large piece of my exit plan revolved around my kids graduating from high school, using proceeds from the sale of my house to pay off any outstanding balance on my loans, and downsizing my life to something more in line with my true values (freedom, travel, and independence).

I met my husband, who was retiring from the Army, in the interim and his action-oriented personality moved my timeline up by five years. He did not see the benefit in my super risk-averse timeline. So I left the SEC in 2018 to become an Accredited Financial Counselor.

Having another breadwinner in the house for the first time completely changed my exit plan strategy. I was prepared to stay at the SEC for 10 years in order to financially prepare for a semi-retirement, but being in a partnership made that possible much earlier.

Paid off outstanding balances using proceeds from earlier investments

The pandemic years were crazy for so many reasons, but a big one was the real estate market.

We hadn’t planned on selling the Alexandria townhouse until 2022, but after some conversations with my realtor (Paula Flagg — she’s amazing!), we decided to put the house on the market in the summer of 2021. The market was so hot we had a great offer after the first open house.

We earned roughly $100,000 more than I ever imagined the house would be worth, and we used those extra proceeds to pay off my student loans once and for all. (The remaining profits are being reserved for our future vineyard.)

So there you have it

One path for paying off over $200,000 in student loans over a 17-year journey.

Given everything I had going on in my life, I needed to take my time.

And as long as I got everything done I wanted to do, then if it took a little longer that was okay.

And that’s what I want for all of you — it’s ok to do it your way.

Even if your way doesn’t look like the textbook strategies you see in all the finance blogs.

It’s your life.
Make your own plan.
And ask for help if you need it 🙂

If you’d like to know the best student loan repayment strategy for you, check out my 30 Day Student Loan Repayment Plan program to get support and finally figure it out.

Bio: Jessica Medina is a former lawyer turned Accredited Financial Counselor on a mission to help attorneys figure out their finances so they can pursue their true passions, no matter the salary. She graduated from Columbia Law School in 2004 as a single mom of twins with over $200,000 in student loans and went straight to work at a Biglaw firm. After eight years she switched roles and became Senior Counsel at the Division of Enforcement at the United States Securities and Exchange Commission. She left the government to work in an area of the financial industry outside of the securities world and now teaches other lawyers how to use their money to finance their dream lives.

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