We Could Pay Off Our Student Loan Debt Today But We Won’t

In December of 2012 my wife (girlfriend at the time) and I opened up to you about how much student loan debt we had. As we inch closer to paying off my wife’s student loan debt, we just wanted to give you a quick update about where we are today.

I’m excited to announce that today we could pay off my wife’s student loan debt in full and be done with it forever. We could be student loan debt free today! As much as I’d love to go ahead and get rid of the student loans for good, we won’t be paying the student loans off this month. Why?

While we technically have enough cash to vanquish the student loan debt, but we don’t have enough to be able to pay off the student loans AND still have a decent sized emergency cash reserve. We’ve learned how important having an emergency fund is after Tori’s two foot surgeries and how her not working affects our finances.

If we did get rid of the loans, then we wouldn’t have that cash buffer. The payments on her loans are only about $200 a month now so losing a decent sized emergency fund to free up a cash flow of only $200 in an emergency doesn’t really seem like a prudent move.

Private Student Loan 1 – 8.0% Variable  DESTROYED!

This loan was originally over $20,000 but was destroyed in the August 2013 update.

Federal Student Loan 3 – 6.8% Fixed ANNIHILATED!

This was a smaller loan at a little more than $4,000 but it too was destroyed in the August 2013 update.

Private Student Loan 2 – 5.75% Variable VANQUISHED!

This loan, originally over $23,000, was vanquished in the December 2013 update.

Private Student Loan 3 – 4.75% Variable FRESHLY SLAUGHTERED!

We just paid off this student loan a couple days ago. It took $7,943 to pay this loan off, but we knocked it all out since the last update!

Federal Student Loan 1 – 6.55% Fixed

The current balance on this student loan is $7,210.78. This is a decrease of $51.73 since the last debt update. This student loan will be the last one we vanquish in our journey to total student loan debt annihilation.

Federal Student Loan 2 – 6.55% Fixed

The current balance on this student loan is $6,508.70. This is a decrease of $313.71 since the last debt update. This is the loan we’re currently trying to destroy. Hopefully it will be gone before the next update, but that is a pretty aggressive payoff schedule and I don’t know if we’ll be able to pull it off or not.

Total Balance – $13,719.48 (-$8,308.16)

As you can see, we’ve made a ton of progress since last month! We’re more excited than ever as we can finally see the light at the end of the tunnel. We hope to be able to knock out this debt in the next few months but we can’t predict the future and what it holds for us.

I hope our story has inspired you that you too can pay off large amounts of debt. All it takes is determination and a ton of hard work. It can be done!

Are you trying to pay off any sort of debt? How is it going? I’d love to hear your story in the comments!

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Great work on eliminating so much of your debt. You shouldn’t sweat the remaining balance. I think you made a wise decision to keep your emergency fund in place. I can remember paying so much of our income to pay off credit cards that when we had an unexpected expense we had to put that right back on the card. Not a very efficient way to get rid of debt. You’ll get rid of that last $13,000 in no time.

  2. HOW AWESOME! Congrats on seeing the end. We put our student loan debt last as it’s the most flexible of all our debt and has the least amount of interest attached. But it’s our biggest one. So while we see the light at the end of the tunnel for our credit cards, we still know that there are some huge mountains to come!

  3. 6.5% is steep compared to what you’re probably earning on the emergency fund assuming you don’t have that out in the stock market. As such, I agree with not paying it off today but I’d probably look at applying anything extra to get those loans down as quickly as possible rather than continuing to bolster the emergency fund. At a certain point, maybe when you’re halfway down, you may decide the risk is worth taking to get rid of the rest. After all, you’ll still have some emergency money at that point, and you’ll be able to rebuild that starting right away without the payment.s Just something to consider down the road.

  4. How great is it to see that -$8,000 number? Rock on, man……

  5. Wow! Looks like you guys were busy in 2013, good for you! My wife and I paid off her student debt and car loan before we got married, living debt free is awesome. Looks like you’ll be there pretty soon!

  6. You two are so bad ass!!! I love it!

  7. I received a 0% interest balance transfer check that could be used as cash without cash advance fees and only 1% transfer fee. This helped me pay off half of my loan debt (and the highest interest loan debt). I still have it now on a credit card, but by not having $115 going towards interest every month, I will be paying off that debt faster. Getting half the debt paid off is such a relief that I will be able to better focus on saving for a house and saving for retirement.

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