Scholars Fund

Completely Eliminate Any Debt in Five Doable Steps

Completely Eliminate Any Debt in Five Doable Steps

Five Steps to Eliminate Any Debt

If you have been in debt like I have, you will know the burden, or the shackles debt brings with it. Debt brings with it physical symptoms such as headaches, insomnia, disturbances in sexual performance, and disruption in thought processes. Stress from debt can induce diabetes, high blood pressure, obesity, and hypervigilance. Now imagine what that kind of stress can do to a student.

Tuition debt is the most common type of debt students carry in this country. It has two major causes. At Scholars Fund we have come to know the first major reason is due to laziness. I’m sorry, am I being too blunt?

There are billions of dollars available for use by students to get their education in whatever field they wish. Any American student can get an education at any level, whether it be a master’s degree, doctorate, or two or three doctorate degrees without spending one red cent of their own. Here is where the laziness comes in. Those funds are not awarded to you just because you are a student who wants a higher education. You have to seek for and apply for those awards. Between the application process, waiting for the letter, and doing exactly what the scholarship committee tells you to do in order to keep the fund once awarded to you, it is not easy. So the student that does not want to take the time to seek for and win those awards opt to put the proverbial noose around their heads with malicious loans. They are easy to get; one simple application with your social security number on it and you are off to the guillotine.

We can talk about why those loans are evil, however we do not have the electronic space to go through all of that. We will briefly discuss what to do to get out of this scourge you got yourself into.

Robert Kiyosaki and Garrett Sutton both agree that getting out of debt is the surest way to begin the accumulation of wealth. Even the Good Book states anyone who is indebted to anyone else becomes a slave of the person you owe.

Dave Ramsey lives his life teaching people — students especially — on how to get out of and stay out of debt. Scholars Fund takes a little piece out of each author’s writings and makes them work for the typical student. Yet, I think you will agree with me that all three authors will tell you that earning a little extra cash to put towards paying the bills is extremely beneficial.

Robert Kiyosaki feels that increased education about money will bring about an increase in asset building. With increased finance education, an individual can use debt to create wealth.

Garret Sutton wrote a book called The ABC’S of Using Debt to become wealthy. In his book he describes proven methods that you can use to turn debt into wealth.

Dave Ramsey takes another approach. He states the beginning of wealth starts with the annihilation of all debt.

The following example will illustrate their point.

Let’s say you have five credit cards. On credit card A you have a total balance of $550 with minimum monthly payments of 50.00. This is just an example. Work with me, I am no money wiz, just a blogger who cares about you.

Making the minimum payment will guarantee your being indebted to this credit card for a very long time. By the time you have made the last payment, you will not remember what you purchased for $550 and you may have paid well over $3,000 for that item.

On credit Card B, you owe a grand total of $300 with a minimum monthly payment of $22. You must take into account the interest you are being charged is compound interest. I know of no credit card or tuition loan company that does not charge compound interest. Keep in mind when you put your money in any banking institution, they will pay you simple interest. Does anyone sense a rip off here?

I digress.

You owe credit card C $77 with a minimum monthly payment of $10.

With credit card D, you purchased a few books you need for classes, totaling $656. You don’t have the minimum payment amount yet.

That old card you maxed out a year ago? It has a total of $1,500 owed with a minimum monthly payment of $99.

Here is a little experiment for you. Look at each of the statements and see how much of those bills you have actually paid off. Now add up all of the payments you have made for each bill individually and compare that to what you spent. You will notice, more than likely, that you have already given the debtor cash equivalent to the money you spent to buy the items. Yet you still owe most of the money according to the bill you are looking at. This is the power of compound interest working for the bank. Not you.

According to the three power houses Robert Kiyosaki, Dave Ramsey and Garrett Sutton, earning a little extra cash will go a long way to helping you out of any debt. You could do this by way of another job, a side hustle, or business. Always make sure your living expenses are paid first. After all, you need a place to sleep, eat and study.

Next, there are other ways to free up money to get out of debt.

Eliminate or postpone anything that is not essential for living. Only you know what your priorities are. I would say eating out, is out. No pun intended. Make your coffee at home and bring it to work in a portable coffee cup. Fix your lunch at home to avoid buying food while at work. Have ramen noodles for dinner each night.

If you use over the counter medicine, try to find the generic brand. In other words, don’t purchase Tylenol, purchase acetaminophen instead. Purchase generic antidiarrheals. Avoid the name brands like the Dao pectates and Pepto Bismol. More often than not, the generic brands contain the same ingredients as the name brands. The only difference between these meds is the extra money you pay for the name.

If you smoke, well you know what I am going to say about that.

Smoking burns up a lot of funds you could use to pay off a few bills. You can postpone smoking until you’ve reached a level of debt you want to manage. We suggest zero debt. Any debt has a bad habit of becoming bigger debt.

Postpone all vacations. Remember, debt elimination is a temporary state that will be over as soon as you pay it all off. Take mass transit to work if you can. Say you want but paying for gas is much more expensive than taking the train or the bus. If possible, when using mass transit, you might as well cancel your car insurance.  If you have to drive, use Uber to avoid having to pay car insurance.

Sublet part of the house or apartment if it is legal. Do not even consider buying a house while you are so deep in debt you are looking for a way out. Dig your way out of the financial rut first. Get out of the “rat race” as Robert Kiyosaki would call it, then consider the house.

The above are a few suggestions to free up cash that is needed to get out of that rat race. Below you will find more practical instruction.

A few paragraphs ago, we talked about the five credit cards. Debt can be in any form; it does not necessarily have to be credit cards only.

Scholars Fund suggests you attack the debt problem this way:

Use $100 per week out of the extra money you earned and squeezed out of your finances to apply to debt elimination.

Find out what all the minimum monthly payments are and place them on a chart (like Excel) in descending order. Place the dates due in the next cell.

Take the least of the monthly payments and divide it in half. Add that half to the total minimum monthly payment. That amount has just become your new monthly payment for that bill. You will continue to pay all of the other minimum payments until the first smallest bill is paid off.

The smallest bill was credit card A.

Take the entire amount you were paying for credit card B. Divide that in half. Add that half to the minimum monthly amount for credit card B. That amount has become your new monthly payment.

Add that new monthly payment to the credit card A payment until credit card B is paid off.

When credit cards A and B have been paid in full, apply the payments you were making for credit cards A and B to credit card C.

Do you see the snowball effect of paying debt this way?

Apply the above techniques to credit card D and so on until you have rid yourself of debt.

Garret Sutton states that you can use this method toward wealth building. That is another topic for another post.

You can use the above principle to challenge any debt you have by freeing up money from unnecessary purchases like coffee, lunch and other. Add some extra cash with a side hustle or part time business and use the snowball method to pay off all your debt.

Send us feedback and let us know how this method is working for you.

Oh, by the way, Scholars Fund doesn’t just help you find scholarships and awards for tuition; we also help  you with your side hustle.

We need students to find and help other students get their education and graduate with their degrees without paying one red cent.

Send your inquiries to

In the subject line, write “Help me pay my tuition debt.”

We realize that more than likely, you are a student looking for funds to pay for tuition, have the time to study full time, and looking to have a lot of fun and graduate.

Scholars Fund is here to tell you that we know of students who did all the above and graduated with money in their pockets with residual income as icing on that cake. This is the part you may not believe: they did all of this without any interruptions in their study.

Scholars Fund is not only an organization of scholarships, but one of wealth building for the student while that student is actively gaining a degree.

It isn’t unheard of for a student to pay off his tuition debt BEFORE getting the degree sought after. It isn’t done very often because that thought appears to be impossible to most students. The loan companies will tell you that you have six months before the first repayment. They are usually very good at adhering to that practice. Meanwhile, the student is looking at the enormity of the tuition bill and wondering how will I pay all of this off?

Follow the hyperlink Wealth Building for Students. Or we can call it Five Steps a Student Can Take to Build Wealth Before Graduation.

This post will give you practical steps to paying your bills, avoiding that nasty interest that is always attached when one or two payments are missed, and set you on the road to wealth building even before graduation.

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