Can you really pay off your loans in less than a year? This guy did it!
June 14, 2012


Written by Priya Krishnakumar for

For those of you who just graduated college and are now apprehensively looking at a mounting pile of student loans, here’s some inspiration for you:

Harvard business school graduate Joe Mihalic recently paid off over $90k in student loans—the full amount he owed—in seven short months.

After graduating business school with $101k in debt, Mihalic began paying off his loans by depositing monthly payments of $1,057. After 21 months, he decided to check his balance, expecting to see sizable progress. However, after taking interest into account, Mihalic found that he still had a whopping $90,717 left to pay off.

After realizing that, if he continued with his payment plan, he would eventually pay over $40k in interest alone, Mihalic decided to go a completely different route: He vowed to pay off his loans in 10 months.

So how did he do it?

To hear Mihalic explain it, it sounds deceptively easy: to put it simply, he stopped spending money. He skipped Christmas with his family, missed two friends’ bachelor parties and weddings, stopped contributing to his 401k, and has not been on a dinner date or bought new clothes since he began his 10-month plan. Additionally, Mihalic sold one of his two cars, his motorcycle, road bike and anything else he didn’t need on Craigslist. He rented out two of the rooms in his house to complete strangers, learned how to use a pedicab and started a landscaping business—in addition to his day job—on the side.

As he states on his blog,, he “completely eschewed consumerism.” And it worked: Mihalic paid off his loans in full within seven months.

Since paying off his loans in March, Mihalic’s story has gone viral. It’s not hard to find a note of hope in his story—he didn’t lie, cheat or steal to pay back his loans, nor, he says, did he lose the respect or affection of any of his family and friends. He paid his loans off through some hard work and serious self-discipline.

Unfortunately, Mihalic’s method isn’t—and can’t—be for everyone. Not every undergrad or graduate has a steady job, a car to sell, or rooms they can rent out, nor is everyone willing to skip Christmases, weddings, and dining out. However, the inspiration in his story comes in its accessibility, in his hard work, his discipline and his willingness to help others. Since his story went viral, Mihalic has provided detailed spreadsheets of his budgeting, and tries to answer as many questions as he can, most of which are coming from recent graduates looking for inspiration and advice.

It’s oversimplifying things to say that everyone can pay off their loans simply by “eschewing consumerism,” but components of Mihalic’s success strategy can be applied to almost everyone, whether it be through selling something on Craigslist, renting out a room, or a skipping a night out in favor of cooking at home.

While Mihalic’s method is somewhat extreme and would be impossible for most, his cost-cutting strategies are definitely effective, even when employed in parts. For example, Mihalic estimates that he spent over $1,000 per month on entertainment alone, an amount he cut down to virtually nothing once he started his 10-month plan. However, even if he simply halved that amount, he still would have saved over $6,000 a year. Not everyone can pay off their student loans in seven months, but everyone can take a lesson from Mihalic’s self-discipline—by reevaluating your spending habits and cutting everyday costs here and there, who knows? You might find yourself paying off those loans a lot faster than you expected.

Priya Krishnakumar writes for and attends Northwestern University’s Medill School of Journalism