How I Paid off 6-Figures in Physical Therapy Student Loans in Under 2 Years

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By PT Wealth Journey

In October 2016, I paid off $115,000 worth of debt that I accumulated in physical therapy school. It was such a huge accomplishment that I immediately downloaded all my payment records and saved them so no one could tell me otherwise. Now that I’m more financially curious, I broke down exactly how I paid off 6-figures in student loans.

In doing so, I might as well share my struggles, fears, and thought process along the way.

For those who are curious about the break down of how these loans were accumulated during my education, head here. Otherwise, let’s move on.

May 2014: Graduation & Initial Student Loan Repayment Strategy

I graduated in May 2014 and my first payment was not due until December.

Despite employing strategies to mitigate costs by working while in school, I borrowed $96,933.14 for tuition alone.

List of all loans borrowed:

Loan #0013 was actually taken out in undergrad in 2010. I was initially planning loan forgiveness, so I consolidated it to a single loan servicer on 11/06/2014 before I entered repayment.

Realizing that the popular Income-Based Repayment (IBR) plan is a loser’s game and the Standard Repayment Plan would leave me without a life for 10 years, I felt left with two options:

  1. Pay off my loans as quickly as I could
  2. Seek Public Service Loan Forgiveness (PSLF).

At the time, it was the clear choice to go the PSLF route since I calculated I would be paying about a fourth of what I borrowed by the end of10 years. It was a no brainer — or so I thought.

The only things I needed to do was to:

  • Make 120 qualifying loan payments (a minimum of 10 years)
  • Working full-time for a qualified employer (Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code)
  • Enrolled in an income-based repayment plan (Such as the Pay As You Earn)
  • Submitting necessary paperwork annually (Annual application, employment verification, and pay stubs)

I had all my paperwork squared away and was ready to commit to 10 years of making qualified payments. My loans would then be forgiven (If only it were that easy).

December 2014: My Balance At Repayment

I was surprised to learn that my principal suddenly grew by over $10,000! When my grace period ended, it triggered something called capitalization. This is where your outstanding interest gets added to your principal and you will be paying interest on a larger balance. Trust me, you do not want the power of compounding interest working against you.

Lesson # 1: Pay off all your interest before the end of the grace period to avoid capitalization unless you are 110% sure your loans will be forgiven tax-free

Ultimately, my principal increased from $96,933.14 to $107,512.32.

After catching my breath, I figured it didn’t matter because my loans were all going to be forgiven under the PSLF program… right?

My First Payment Under the PSLF

I was accepted into an orthopedic residency program who was a qualifying employer according to PSLF rules. I couldn’t be happier earning a $62,400 salary and only having to pay $185.47/month towards my loans. This is dramatically lower than the $1,200/month I would have paid under the 10-year standard repayment plan.

Under this program and any other IDR program, I learned that 100% of my payments go to interest before enough touching the principal. This meant that my $185.47 payment only applied to my interest which was accruing at over $600/month.

I was initially nervous watching my balance increase but I convinced myself it wouldn’t matter because my plan was to have it all forgiven anyway.

Then there came a problem that changed the course of my life.

The Problem

I did not anticipate my time with this PSLF qualifying employer would be so short-lived. I was a wide-eyed new grad PT who was pumped up to help as many people as I could.

The last thing I expected was workplace intimidation, bullying, and abuse that led to many levels of physical and mental health issues that I had to deal with for years after.

I knew could no longer stay at what I thought would be my dream job. It was my first place of employment and the environment turned out to be toxic.

After the longest year of my life, my contingency plan to transition to another non-profit healthcare system backfired as they were recently bought by a for-profit company.  I was left frustrated and depressed from months of unsuccessful searches for non-profit facilities.

The Solution

Rather than frame my search for employment around qualifications for public service loan forgiveness, I framed it around where I would be most happy.

I figured no amount of loan forgiveness would be worth the stress, unhappiness, and uncertainty I was experiencing.


By no longer being limited in my search, I quickly found a supportive position in a healthcare facility within the private sector and resigned from my first job.

At this point, the most certain and efficient way to get rid of my loans was to pay it off as quickly as possible.

Up to this point, I already paid $2000 in interest and accrued an additional $5,000 in interest after just 1 year! I briefly dwelled on the fact that I could have saved thousands of dollars if I decided to aggressively pay my debt from the get-go, but I know I needed to move on.

Lesson # 2: Choose a repayment plan you are 110% positive you can commit to no matter what happens. This is my $7,000 lesson.

December 2015: My Revised Repayment Plan To Getting Rid of 6-figures In Student Loans

Since, my monthly payments were no longer correlated to my earnings since stopped pursuing the public service student loan program.

I felt that I could now focus on increasing my income without any perceived consequences.

The plan was simple: Earn as much money as I could, spend as little as possible, and put the difference towards my student loans.

I also signed up for automatic payments, which lowered my interest rate by 0.25%

Lesson #3: Sign up of Automatic Payments to reduce your interest rate! Refinance when you are eligible.

New Job + First Month In The Debt Demolition Phase

I started my new job in December 2015 with a negotiated salary of $72,000, which ended up being $69,000 that year because I was the first one who took an off-day when census was low. After my first year, I planned my exit especially when I discovered that they hired a new graduate occupational therapist five years ago for $80,000. You can understand how pissed I must’ve been!

Lesson #4: Negotiate your salary ㇐ don’t leave money on the table.

I decided to nearly empty my bank account by making a HUGE lump sum payment on my loans.

December 2015 Payment Summary: $59,682.64

As you can see, from the graph above, I tried my best to use a combination of the debt avalanche and debt snowball strategy. In my first month attacking my debt, I completely paid off 7 of 13 loans totaling $54,205.67.

I paid an additional $5,476.97 on my remaining loans, but since it did not show well on the graph, I decided to place them in chart form.

This brought my total to $59,682.64 paid in December 2015.

Remaining on the Pay As You Earn Program allowed me to strategically prioritized my payments towards my high-interest loans first.

Remaining on this program allowed me to mitigate risk.

If I lost my job, I could go back to making $200 monthly payments without any hassle.

During my first 14 months of professional work, I earned $46,000 after taxes and deductions. Of that money, I saved up a whopping $35,000.

This 76% after-tax savings rate was only possible living at home, living frugally, eating leftovers, and taking public transportation to work.

Most of my spare money went to contributing to household bills to convince my mom she didn’t need to work overtime any longer.

Doing this made me want to earn even more money.

Lesson #5: You have to find ways to keep yourself hungry

One thing I wish I did during my aggressive pay off was to refinance my loans. Doing so would have qualified me for a lower interest rate.

The fact of the matter is that I quickly disregarded it as an option. My fear of the unknown overshadowed the potential cost-savings.

Lesson #6: If rates are favorable, refinance your loans for a lower interest rate as soon as you can with consideration of forfeiting the ability to change back to a type of income driven repayment plan/student loan forgiveness plan.

January 2016: Increasing My Income

My goal was to pay off the federal government before my wedding on October 1st, 2016.

The only way to do this was to increase the gap between what I earned and what I spent.

Increasing My Income:

In addition to making $69,000 in my 1st year at the SNF, I also picked up PRN jobs working a total of 56 – 64 hours per week with the occasional 70 hour week.

In 2016, I earned an additional $16,000, bringing my total gross income to $87,000.

Further Reducing My Expenses:

I continued to live at home with my mom and siblings while paying $500/month towards bills. My older brother, who had a family of his own, was able to help me with the internet bill. I switched mobile carriers and got rid of our cable service since we only watched a few channels anyway. Ultimately, I reduced my responsibility to $300/month.

Continuing to live at home, packing leftovers, living frugally and not purchasing a vehicle made it possible to save 88% of my post-tax money.

Lesson # 7: Living with parents even for a year can accelerate your progress to paying off debt. You may also buy and rent out extra space in your home to speed up the process. If renting, explore subleasing.

2016 Payment Summary: $53,527.85

Looking back, I can’t believe how much I worked. I distinctly remember the cold months where I worked 12 consecutive days, 4 of which were 14 hour days between two jobs. Needless to say, I didn’t do that to myself again.

October 2016: Goal Met! Paid Off Over 6-Figures in Student Loans

With perseverance, financial savviness, and support from family and friends, we made sure to say goodbye to my student loan servicer.

Best of all, my wife and I tied the knot on October 1, 2016 debt free and lived happily ever after.

Just kidding, we found ourselves not knowing what to do with our life after debt, that a story for another day. Between my wife’s debt and my debt, we paid back well over 6-figures in student loans to tune of $150,000.

How Much Did I End Up Paying?

Placing all my numbers in a spreadsheet, the total the amount I paid is $115,227.19 between 2014 and 2016. $10,579 of that was accrued interest during school and during my grace period. Another, $7,714.87 accrued during my repayment period.

What strikes me is that I accrued approximately $7,000 of interest while I was pursuing the PSLF program. Comparatively, I only accrued $700 in the 8-9 months that I was aggressively paying off my loans!

In total, these loans cost me $18,294.05 or 18.89% of what I borrowed!

Seeing how the stock market rose in those years, I would have been better off investing my money. However, no one can predict when the market will shift. Even with the investment knowledge I have now, I would not risk a certain 6.28% interest rate on $100,000 for uncertain gains in the market.

It’s much more important to make decisions that allow me to sleep better at night. This is the beauty of personal finance – it’s personal

As you can see, paying off 6-figures worth of student loans is not easy.

I know my situation was unique because not everyone can live at home with parents, then again, those that do may not be contributing financially to the household which I felt was important to do as I was also working.

Related: I bought a house for my mom!

It’s also important to discuss with friends and family about what I was doing so they could support me in understanding that I may not want to go to certain restaurants just to hang out and support from my girl friend – now wife, that I would be working more. Two years worth of friends and family understanding why I was so damn frugal and why I was working so much went a long way.

For those on a similar path, I hope my story inspires and guides you through your own wealth journey.

Paid Off Over 6-Figures In Student Loans – What now?

Photo of wife & I enjoying the clear seas before the sun sets on the beautiful beach in Da Nang, Vietnam

My wife and I are working towards early/semi-retirement and working on building multi-generational wealth while doing so. Our goal was to pay off 6-figures in student loans. Not only did we the goal, but we’ve surpassed it by setting our next goal at saving/earning 7-figures. If you want to follow us on our journey. Consider subscribing below to stay posted. You can also keep track of our money moves at the bottom of our above page.

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