Student debt repayment can seem like a daunting challenge. Indeed, someone who is about to graduate from school, and looks at the amount of student loans they have racked up over years, may wonder how they will ever pay off this debt. Student loans can be especially daunting for recent graduates who do not yet have employment lined up, and otherwise do not have a plan for repaying their student loans. However, student debt repayment gets easier over time, and if you keep this thought in mind, it can be easier to go through the months and years it takes to pay off student loans.
It may seem obvious that people will have the most difficulty paying off student loans right after they begin their careers. However, it can sometimes be difficult to keep things in perspective and understand that student debt repayment gets easier over time. My own story demonstrates that as you make payments over the months and years required to pay off student loans, your student debt should be less of a burden as time passes.
When I first graduated from law school, I had around $177,000 of student loans I had amassed from attending college and graduate school. This debt accrued interest at a rate of $31 a day, and if I made payments under the normal 10-year repayment plan, my payments exceeded $2,100 a month. However, with each payment I made on my student debt, the amount of interest that accrued on my loans was lower and lower.
I first became aware of how steady and long-term debt repayment could make an impact on your bottom line when my parents first explained a mortgage to me when I was a kid. I asked my parents how borrowers could ever get ahead with mortgages when they were borrowing massive amounts of money and their debt was accruing so much interest. They explained that at first, payments on mortgages mostly went to paying off interest, but a small amount also reduced principal on the debt. Over time, more and more principal is paid every month until borrowers are paying more of the principal with every payment than interest that accrues on this debt.
I kept this mentality in mind while I was paying off my student loans. Although interest on my student debt accrued at about $31 a day when I first started paying off my student loans, I knew that with each payment, this amount would decrease. I made payments on my student loans every two weeks after I received my paycheck, and I calculated that with every payment I made on my student debt, the amount of interest that accrued each day decreased by around 40 cents.
Although this might not seem like much, seeing the amount of interest that accrued on my debt decrease truly benefited my morale. After about a year of paying off my student loans at an intense pace, the rate at which interest accrued decreased enough so that I felt that some of the financial pressure of my student loans had been relieved. I am sure that many borrowers can also calculate the effect their payments make on the amount of interest that accrues on their debt.
In addition, the average interest rate of your debt should decrease at an accelerating rate over time if you keep a few simple repayment methods in mind. As previously mentioned on this website, you should repay higher-interest student debt first under almost all circumstances. As you continue to pay off student loans with higher interest rates, the average interest rate of all of your loans will decrease. This will have a huge impact on the amount of interest that accrues on your debt. All told, individuals still in school and recent graduates should not be so daunted about the prospect of insane amounts of interest accruing on their debt, since this amount will decrease over time.
Another way that student debt repayment gets easier over time is that individuals typically make more money as they advance in their careers. This did not happen in my case, since I made good money working at a big law firm right after graduating from law school, and later made less than half this amount working at a smaller firm a few years into a career. Towards the end of my student debt repayment saga, I started working at a firm that paid me closer to the amount I made after graduating from law school, but for me, I had the highest salary during my student debt repayment saga right after graduating from law school.
However, the vast majority of people make larger sums of money as they advance in their careers. Of course, people also typically have more responsibilities as they get older, since childcare, home ownership, and other expenses can add to the financial burdens people experience. Nevertheless, student loan repayment usually gets easier over time, since people typically make more money as they progress in their careers.
As the old saying goes “a journey of a thousand miles starts with a single step” and student loan repayment can seem daunting to everyone at the beginning of their student debt journey. However, student debt repayment gets easier over time. Gradually, the amount of interest that accrues on your debt will decrease, since more money will be devoted to principal and higher-interest loans will be paid off first. As a result, every student debt borrower should hang in there, and trust that student dept repayment gets easier over time.