I Am Officially Debt Free!

Today is a very exciting day because I have officially made my final lump sum payment that will rid me of my student loan forever! I’m relieved it’s gone, embarrassed it took so long and thrilled to never see the acronym NSLSC (National Student Loans Service Centre) show up in my bank account ever again. For anyone curious, I graduated in 2013 with a Bachelor’s Degree in Commerce and about $35,000 in student loan debt. Technically, I could have paid off my remaining balance earlier this year but given that student loan payments in Canada were suspended with no interest accruing, I decided to take the opportunity to instead save for the short term and pay off the remainder of the loan right before payments restarted. I don’t regret this decision one bit, it allowed me to build up a substantial cushion of savings and had I lost my job during Covid I would have been very financially prepared.

I don’t know about anyone else but growing up I always heard people call student loan debt ‘”good debt” and because of this I just wasn’t in a rush to pay if off. I received grants every year in university that paid for my books and then some but never thought to save the additional for my inevitable growing loan. During the 6-month grace period after I graduated I didn’t make any payments because why would I? And even after that I only made the minimum payments (which to be fair, was still very high for what I was earning in my first job out of school). I thought it was normal for people to take 10 years to pay off their loans, it was fine because it was “good debt”, right? Wrong!

I understand why people refer to student loans as a good debt; it translates into a significant amount of value for most people and it’s an investment in your future. And I am proof! I am in the exact field that I went to school for, I seriously love my job and I make a comfortable living which I partially credit to my education. But at the same time, it’s dangerous to label any debt as good debt, especially when the average student in Ontario graduates with $28,000 in loans and a floating interest rate that can hover between 4-6%.

Now unfortunately, I don’t have a great story about how I successfully paid off my loan. I paid exactly what was required of me and nothing more for about 4 years after graduating. In 2018, staring down a balance that was still alarmingly high I decided it had to be gone by the time I turned 30. I started putting down semi-regular lump sum payments and then in 2020, I got a bonus that I used to wipe out most of it. Ta da!

My story is pretty irrelevant. You can’t bet on a bonus or a windfall to take care of your debt but luckily, mine did. Consider me a cautionary tale and prioritize paying off your debt- even the good debt. When interest builds on large amounts like student loans, your monthly payments barely make a dent and you end up paying so much more than the principal. If I could go back in time I would’ve made more sacrifices to pay off the loan sooner. But you live and you learn, and this should be a reminder that it is never too late to course-correct.

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