We graduated from college just over 2 years ago and my husband had about $20,000 in school loans- not a horrendous amount; actually, it's about average. Two-thirds of 4-year undergraduate students graduate with some debt, and the average student loan debt among graduating seniors is just over $19,000. So, it was exceedingly normal.
We started off paying the student loans as the plan said to- minimum payments- as we saved up a down payment for a house. This is not what Dave Ramsey recommends, but the interest rate on our savings was higher than the loan interest rate! How could it make sense to pay it off early?! Even after we got a house, the house interest rate was higher than the school loan rate- which to pay off? We went on spurts, off and on paying more than the minimum. Jobs came and went. Then, something snapped. We finally decided we were going to go all-out and just pay it off and be rid of it. Debt, even "good debt," is not something we want, regardless of the interest rate.
Two years after graduating college, we have two paid-for cars, a house, a dog, and no non-mortgage debt.
Hooray!! I'm SO excited.
Why be debt free?
For us, it's all about margin. The fewer required expenses we have, the more freedom we have to make life choices. The more we can give. The more we can save. The fewer bills there are, the less we have worry about how to pay them.
We still have goals; right now, they're pretty boring- expand our emergency fund, fund our health savings account, get rid of PMI on the house, save for a destination wedding in the family (OK, so that one's less boring)- and we have a plan. I love dreaming about the future. I love seeing our spreadsheet showing that we'll meet all our goals by the end of next year. I love the flexibility that we have now and I anticipate will grow in the future. Most of all, I love owing nothing to anyone, except owing a debt of love to my neighbor.
Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.
Graph of student loan progress, from beginning of 2007 through earlier this month.
New balance: Zero