For All You Dave Ramsey Followers:

Updated on September 08, 2011
J.G. asks from Minneapolis, MN
15 answers

I need to hear from people that have done his program. We don't have much debt. Our credit cards are paid off, cars paid off, we rent, but we have so much student loan debt. Is it possible to pay down 40,000 in student loan debt in a few years? We have gotten great at our budget, paid off all our credit card debt by ourselves, bought our cars with cash, but still have such huge payments every month for our student loans. Is it worth it to give up cell phones, internet, cable, weekly allowances all for student loan debt? Is it realistic to be able to pay off that large amount of debt? It took us 3 years to pay off 15,000 worth of credit card debt. Yes we have more available now to pay with, but we just can't decided if its worth it or not. Thanks!

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answers from Tulsa on

The tax benefits I get from the student loan interest, along with an interest rate below 3%, means that is the last bit of debt I am going to pay off. I am paying them off on a 10 year plan and don't pay any extra each month.

If you have low interest federal loans, you don't want to pay them off early. However, if these are private loans with a high interest rate, I'd definitely work on knocking that debt down. Personally, I'd start dumping more into retirement or saving on a down payment for a house, if you are planning to buy.

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answers from St. Louis on

Wow....Some of the other answers have really surprised me.

Is your rate variable? I would assume so, or else inflation wouldn't matter. So, your rate changes based upon the "ease" or rate at which you can obtain funds through the loaning industry (in a nutshell).

So, what happens in 5 years when interest rates skyrocket? (and they will). While it will match inflation, your percentage rate may be at 15%. Then, you will wish you paid off your student loans.

Depending on your income, you may or may not get a tax benefit as Amanda H does. We don't. We make too much. I actually felt richer typing that. I am not rich. =)

Not paying them off early is horrible advice. Pay them off asap. Yes, it is worth it to live on less than you make in order to pay them off early. Even if you ignore all that "ooh it feels so good to be debt free" advice, it still makes financial sense to pay them off.

I second Denise P.

(and PS - this is all from my mind, not Dave's, although I do follow some of his advice at times. =)

Good luck!!!

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answers from Pittsburgh on

I'm going to disagree with Riley. Sure banks may not "count" student loans against you as heavily, but it's still debt that needs to be paid.
Depending on your interest rate (let's use 5%) if you can pay 1000/mo, you can have that paid off in less than 3 years.
So...I wouldn't cut my life to bare bones, but hopefully with that student loan debt came some decent earning potential.
I'd hit it pretty hard to get it banged off in a short time.

ETA: Sorry forgot to include a website for a caculator:

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answers from Boca Raton on

One of the happiest days of my life (well, financially anyway) was when I paid off my grad school loan last fall - after a decade (!).

I didn't realize how much that loan hung around my neck, and it even had a good interest rate. I also closed three credit cards (didn't owe as much on those though).

As Dave says (paraphrasing from the Bible), the debtor is slave to the lender. Sometimes you have to live like no one else so later you can live like no one else. He'd probably say to bear down and get those loans paid off, even if you have to deliver pizzas for a little while, or some other little part-time job. But he would also ask you where you are in the "baby steps." You might want to check out his book from the library ("Total Money Makeover") to make sure you're going in the sequence he uses (if you care about how he does it).

You can also listen to his radio show for free, online, from 2 pm - 5 pm M-F eastern time.

Good luck and I hope you can do it on a time frame that works for you.

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answers from Seattle on

Yikes! Why on earth would you WANT to? Student loans one typically wants to stretch out for as LONG as possible. It's unlike any other debt. The interest rate, esp the longer you push it, usually ends up closest to matching inflation. It's also considered *completely* differently by banks and other institutions when it's time to get a mortgage, etc. My cousin in banking says they calcuate student loan debt at 1/100th of actual debt. So 100,000 in student loans = 1,000 in credit card or loan debt.

Granted, with only 40k you might not be able to stretch it for 30 years, but consolidated I'd be surprised if you paid more than 125 a month. The govt wants you to pay it off as fast as possible (because the faster you pay it off, the more money they make on it... again, because rates are so low that over time they match inflation, so if you pay it off early they make money on your loan, but if you pay it off over time they just make their money back/ no profit on it), but it usually doesn't make good financial sense to.

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answers from Norfolk on

our student loans are consolidated, and we pay $300/month. We are about to embark on our own Dave Ramsey adventure and knock it out because that's a HUGE amount of money when we only have one income. Go for it!

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answers from Miami on

Student loan debt is still debt. We have no debt except for our house and my student loan also and it drives me NUTS to still have it hanging out there. So much so that if my husband gets a bonus this year, we've discussed using it to payoff the loan. I have around $36k, I think. Since I consolidated back when rates were higher, my interest rate is easily double what people are paying now and I am not allowed to reconsolidate it to lower it. I'm not sure you need to go to the extent of cutting cell phones and such to pay it off, but I would continue to put as much as you can live without towards it and do it dilligently. You would be surprised how much you can pay off when you just put your mind to it. Cut out that Starbucks every week and make coffee in a travel mug at home and take your lunch to work a couple of times per week. You could easily save another $40 per month to put towards it that way. It is so hard to be disciplined for such a long period of time, but it is so worth it! Can you just imagine what you could do with all of that money every month once it is paid off??

Oh, and why on earth would you want to?? So that you don't owe any money to anyone! It feels awesome to be almost debt free. We bought a car with cash a year and a half ago. Never in my life did I think I would be able to do that. Granted, it was a used minivan, but it had leather, power everything, DVD of the line, just used. And we don't owe a thing on it! I am a huge Dave Ramsey fan (although, admittedly, I am not as dilligent as he would likely be) and I think you should go for it! Buckle down and get rid of that last thing! I wish you the best!

ETA: You had me thinking about this, so I looked up my payoff amount and it is only $32k! That made me so happy (since I thought it was $36k)! Can't wait till bonus time! :-)

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answers from Gainesville on

When i married, i married my husbands student loan. I HATE debt! We threw money at this silly debt (he dropped out and had nothing to show for this mess)
My awesome mother randomly called me one day and asked how much that debt was and said she would pay it and we could pay her back. That was nice because the interest rate on his loan was OUTRAGEOUS. After she paid it.....we did without any extra stuff and threw all our money to my mom and surprised ourselves at how fast it went. When it was done.....we celebrated and it felt SOOOOOOO good!

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answers from Davenport on

Good Job paying off the credit cards, and YES, it is definitely worth it so pay off the student loans ASAP! Yes you CAN and should pay it off (people pay off more than that for home and car loans, why are student loans any less important?? I had $25,000 myself and paid it off in the first 5 years out of college, and it was totally worth it, freed up that money to start saving for retirement and kids future college.



answers from Milwaukee on

It's absolutely worth it to pay them off! You've done an amazing job getting rid of all your other debt - keep going! Like others have said, you don't even have to go "all out Dave Ramsey style" and you can still get it paid off with a moderate amount of focus. Even if your interest rates aren't that high on the loans, it feels amazing to get rid of them. Good luck to you!



answers from Chicago on

yes it's possible & yes it's worth it
Dave talks about this exact question in his class, go to the class, there is soooo much more info you won't be disappointed



answers from Phoenix on

I agree with Riley. I don't agree with Dave Ramsey's opinions on when and how to pay off school loans. It doesn't make financial sense.



answers from Rochester on

It is absolutely worth it to go with less and get it paid off you will so much better when you kick Sallie Mae to the curb! When we worked out our budget we did get rid of several non essential things but things like cell phone and internet and cable we got the cheapest package that works for our family. Dave has a great debt calculator on his website that will help you predict when you will have your debt paid off. It is so nice to have a date to look forward to. We did the calculator and found out that with what we put into our debt snow ball each month we will be debt free including our house in just over 5 years! Like Dave says, "live like no one else, so later you can live like no one else" Good luck to you! Remember "Debt is dumb and cash is king"!



answers from Sioux Falls on

You can do it! We had $50,000 in student loan debt, besides all our other debt. We went without all those things you mentioned and got it done in about two years. It's tough, but you'll be so glad you did it in the end. Go Dave Ramsey!



answers from Charlotte on

My husband and I were hit HARD by the recession- luckily we recovered and now realize it was the best things that has ever happened for us- We appriciate what we have now, feel like every dime counts, and live with-in our means- we started Dave Ramsey about a yr ago after full circle recovery- and so far have been able to pay off a truck about (16,000) a CC (3,000) and another loan of 5k- It is HARD, I mean Hard to stick with it especially when raising kids who ALWAYS have wants and needs to fullfill- but if you stick it out, you will be amazed! His teaching are spot on and forever change how you think of your money. Your spending habits will completely change! For us, it was hard-and sometimes I hated it, but I hate debt more!! Our pact to each other after starting Ramsey is that we will never buy something (large purchase) with out being able to put down half of whatever the bill is- for us,this was a BIG change! Depending on your income vs. expenses I don't know how realistic 40k in 3 yrs is- but hey what's the worst that can happen? You pay 20k off. . shoot even 10 is a huge chunk! And you know you don't have to live w/o cell,internet ect. . . just downsize it! Our cable was like 90ish bucks a month before Ramsey it is now 22$. .we survived! House phone was around 120 before and now it's about 30$- no long distance (we use cells)no call waiting,caller ID ect . . but hey- we still have a phone! haha you can do it and kudos for getting started! I say absolutely give it your best shot. . God Bless!

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