Mandy Velez was able to settle her student debt of $102,000 using the debt snowball method. This was $27,000 in interests. If she had paid the minimum required amount to settle the debt, she would have paid $96,000 in interests.
The debt would also have taken long and she had calculated that the latest date for debt settlement would have been 2046.
When Mandy Velez graduated from the University of Pittsburgh, she had her eyes set on clearing the debt before turning 30. She had done her calculations and had determined that if she were to pay the minimum required amount to settle the student loan, she would clear it in 2046.
The idea that the student loans which helped her in her study would last that long and become a hindrance in her life was not good enough for her. She had also calculated that if she ends up paying the minimum amount to settle her debts, she would end up paying 96,000 as interest plus the loan amount. She was 22 years at the time, freshly graduated and with no means of repayment or a job to depend on.
During her entire academic journey, She had accumulated over $75,000 in student debts. She had 3 public loan debt which totaled $30500 with an interest rate of between 9 and 12 percent. She also had federal debts, one direct subsidized student debts and one unsubsidized which totaled $45,091 with a 6 percent loan. Therefore, bringing her total to just over $75,000.
Student debt repayment method applied
She started doing her research on the easiest methods to repay student loans. That is when she came across the snowball method and the avalanche method. The snowball method requires one to put minimum payments on all your debts while putting extra cash on the small debt.
The avalanche method, on the other hand, involved making minimum payments on all your debts and also putting extra cash on the loan with the highest loan interest so that you can settle it first.
These methods were a stroke of genius to her eyes. She decided to dedicate her time and effort following the snowball method since her smallest debt already had the highest interest rates. She worked at jobs in New York City that had salaries ranging from $40,000 to $80,000 working for different publications, startups and even temporarily jobs.
She said,
My loan payment came first, and then I had to figure out my life around that, whether that meant living farther away from where I worked and have a long commute, or the jobs that I decided to take, apply for, or turn down.
Sacrifices finally paid off on August 2019
Sacrifices were made, commitments and perseverance become her norm and she was focused on settling her debt. At one time in January this year, she remembers having to give up time with her partner and friends so that she can work to settle her debt.
These sacrifices finally paid off and in August this year, she was able to settle her entire debt of $102,000 which was $27,000 more from what she had borrowed. Not only was this economical, in that she would have otherwise paid off 96,000 more, it was also time-friendly.
She celebrated this fete the best way she knew how. She buried her debts in a mockup funeral she arranged in a New York City Cemetary. This was a mark of her perseverance, bravery and hard work. She was now free, her life before her to explore, spend time with her partner and friends and enjoy her life. She realizes this is an achievement many do not enjoy, and therefore, it was her time to be proud of herself.
