First, the bad news: The median student debt for an MBA from a top 10 business school from the Class of 2011 is $88,500. Wharton grads top the list with an average of $114,000 owed. The good news: All that debt can be wiped out in less than a year.
At least that was the experience of one Harvard MBA, who in March paid off the last of his $101,000 grad school debt, which he chronicled in a blog called “No More Harvard Debt.” Fortune detailed the travails and triumphs of Joe Mihalic, who at the time was earning about $100,000 working for Dell in Austin, Texas:
He gave up all dinner dates and didn't go to a single movie. He stopped contributing to his 401k plan, decided against going home for Christmas, and missed his friends' parties and weddings. When he went to bars with friends, he carried a flask with booze to mix with his purchased Coke. He shared a NetFlix account and refused to buy a single article of clothing.
To earn extra money, he sold his second car and a motorcycle, rented his spare bedrooms to strangers through Craigslist, and started a side business doing landscaping work. Quickly, he chipped away at his debt. To start, he liquidated his IRA account for $8,000, sold stock worth $14,000, and used about $3,000 of available cash to wipe out one loan. Within seven months, he managed to make his final payment and rid himself of all his debt in March of this year – three months ahead of his goal.
But more telling, the magazine details how Mihalic’s attitudes about money changed from his frugal upbringing marked by dinners at Red Lobster and having to earn money to buy his own bike, to Harvard, where students routinely jumped on a plane to attend Oktoberfest. About his final loan payment, he told the publication: “On that day I made that payment, I had nothing. But every day I go to work now I'm actually increasing my wealth instead of reducing my debt.”
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