Jenny’s Story

Cara Brett 11 April 2019

I graduated from university in early 2006, along with a heavy amount of student loans.  It just seemed like a rite of passage for my cohort.  Attend the university that you want, no matter the cost. Meh, hindsight being 20/20 and all, probably should have factored in cost realistically.  University rates are at a premium in the US, even the public ones.  I attended Ohio University and at the time it was the most expensive (and oldest) public university in Ohio.  But, it had the bachelor’s degree program I wanted so I took out loans.  I’d average the cost at US$15,000 for three quarters per year inclusive for Ohio resident undergrad tuition, room and board, books, and money for living expenses.  It’s just what you did, and you were told that your degree will give you higher earning potential.  Oh, the optimism of a pre-GFC world.

I moved to Australia in late 2009, and was transferring monthly payments to my student loan account overseas (ouch!).  The transaction fees and currency exchange rates provided a sobering realisation that I was going to be paying off this loan for the next 25 years.  You need only to Google “student loan debt USA” and you’re met with a slew of disheartening facts.  Anyways, back in 2014 I was working for a community legal centre and was asked by the bookkeeper why I wasn’t taking advantage of the salary sacrifice benefit, approximately $16,000 per FBT year.  I never really understood how to access salary sacrifice, so she patiently explained what I needed to do.

With that handy information in my back pocket, I went to a bank and obtained a loan for approximately AU$54,000. I used that loan to pay off my debt in the US and I began aggressively paying off my loan using my salary sacrifice benefit.  I had paid off about $22,000 before I went on maternity leave in late May 2016.  Throughout my maternity leave, I was able to continue paying off my loan.  I went back to work after six months, and this eventually led to me working for Bounce Financial in April 2017.  Now that I was only working part time, I was beginning to struggle keeping up with my large minimum payment.

Cara and I formulated a new plan – pay this loan off in two years.  Challenge accepted!  My husband and I were able to refinance the loan for a lower interest rate and transfer a small credit card balance to that loan.  I began paying off my student loan in earnest in February 2018, the new balance being just over $29,000.  Cara and I discussed a pretty aggressive approach and decided on allocating $375 per week onto the loan.  This allowed me to meet the minimum monthly payment and allowed for one extra payment to be applied towards the monthly interest charge.  It didn’t give me and my husband much wiggle room in our budget, but we made it work.  There have been a few times where I’ve needed to divert the $375 to pay for car rego, surprise (and expensive) vet visits, etc, but all in all I’ve been able to stay the course.

It’s not lost on me that many people my age will be slowly chipping away at their student loan balance for another 10 to 15 years. I honestly don’t believe I would have been able to accomplish this goal if I had still been living in the US. Today, I’ve paid over $17,000 onto this loan.  Another 33 weeks to go and I’m done.  My money will be mine again, and I’m excited to plan out my new goals.


About the author: Cara Brett

Cara Brett proudly heads up Bounce Financial - founded in 2014 after a successful, decade-long career in the financial services industry. Cara’s experience encompasses both the financial product and financial advice sides. This gives her a comprehensive and holistic knowledge of all facets of financial planning.