I want to highlight some points from an article written about Ken Illgunas, who not only paid off his existing student loan debt from college but also went to grad school at Duke university taking no new student loans during the process.
Speaking about the first student loans he took:
“I had no idea what I was getting into at the time. I didn’t even know what interest was when I was 17,” he said. “I just think that’s awfully indicative of the incredibly poor personal finance education young people have at that time in their lives.”
Here’s how he paid it off:
Back then, student loans had yet to become the front page news they are today. Ilgunas could have simply deferred his loans or declared forbearance. He also could have asked his parents (who were more than willing to help) for a leg up. He could have thrown up his hands and gone to grad school until the job market bounced back.
Instead, he moved to Alaska and spent two years paying back every dime.
This goes back to my previous article that it requires work to pay off debts.
It was a brilliant move for a 20-something needing to pay down debt in a hurry. “It’s 250 miles from the nearest store, room and board were included, and there wasn’t any cell service,” he said. “You can amaze yourself with how much you can save when you reduce your cost of living. Almost every dollar I made went toward my student loans.”
If you do take student loans to pay for your education, you’d better be living a tight budget until you pay that debt off. Was his method extreme? Of course, however he was willing to do what it took to pay it off.
The rest of the story deals with him going to grad school and not taking any student loans in the process. Again, while his methods were extreme, he was willing to think outside of the box to achieve his goal. Most of us are unwilling to even consider another avenue to graduating college with no student loans, much less take the necessary steps to try and avoid it.
His concluding thoughts on his whole experience sums it up beautifully:
“Some people think of their student debt like a car insurance payment — just something they have to pay each month. I think of it like a ball and chain — something that’s keeping you from living a full life.”