May 19, 2020

I used my stimulus check to make my last student loan payment

I used my stimulus check to make my last student loan payment


  • My husband and I had a goal of paying off my student loan debt by fall 2020. We had about $5,500 to go at the end of 2019.
  • When the coronavirus hit, we received a stimulus check of $3,400 and used about $2,000 to pay off the last of my student loans.
  • While it feels great to be debt-free, I know we’re privileged — we continue to have stable work and didn’t need that money to pay bills or provide for our family.
  • Read more personal finance coverage.

When my husband and I decided to get serious about paying off debt in 2020, we certainly didn’t anticipate doing so during a global pandemic. Like everyone else across the country and around the world, our lives have changed dramatically in the past few months. But unlike the tens of millions of Americans who have filed for unemployment over the last several weeks, we have been able to keep our jobs and a steady income. 

We decided back in January to make paying off my federal student loans our biggest financial priority for the year, but I never imagined a stimulus check from the government would help us do it. 

I had several subsidized and unsubsidized loans from the Department of Education with an interest rate of 6.8%. My husband didn’t graduate with student debt, and while we worked together to pay off mine, I knew it was holding us back from our other goals, like saving for retirement. At the end of 2019, we had about $5,500 left to pay and after years of making the minimum monthly payment, it felt like the end was in sight. 

We made progress toward this goal the first couple months of the year. Then the pandemic hit, and we have been incredibly fortunate to not experience a great deal of financial hardship.

The $3,400 stimulus check we received from the government allowed us to make our last student loan payment of $1,969, and while I’m relieved to finally be free of student loan debt, I am still grappling with my complicated feelings about using the stimulus money to get ahead when so many other people are in financial turmoil.

I graduated from college in 2011, and after eight years of making the minimum monthly payment of $270 on my $22,000 of student loan debt, my husband and I decided to get serious about paying it off in 2020. 

After adding another baby to our family last year, we realized the money going toward that payment could go a long way in contributing to childcare costs or put away in savings for a down payment on a newer, larger vehicle. Getting rid of that debt became our biggest priority, and we decided to put any additional income after paying our bills toward my $5,500 student loan balance with the goal of paying it off by August 2020. 

It wasn’t fun to put all of our money from the holidays toward my student loan payment, but it was gratifying to watch the balance decrease each month. We were also able to trim our budget and cut out other expenses, freeing up an extra $230 a month we could put toward our payment, making it $500 a month. 

With these changes, we could see the light at the end of the student loan tunnel. What had seemed like a far-off goal for so long finally felt within reach. Between January and March, we paid off about $3,000 of our remaining balance, then the pandemic hit. 

As the coronavirus epidemic spread to the United States in early March and many states implemented stay-at-home orders, my husband and I felt swept up in the uncertainty about what this would all mean for us. 

He works as a mechanical engineer and is able to do a lot of his job at home, so it didn’t seem as though his work was in jeopardy, though we knew that could change in an instant. I was already working from home as a freelance journalist, but the nature of my work (and income) ebbs and flows, and I had no idea what an unprecedented pandemic would mean for me. 

So far, I have been very lucky to not lose many clients and have even been able to pick up some additional projects. Still, while our income seems stable at the moment, we know nothing is guaranteed, and this new layer of precariousness made us question our financial goals. 

Should we really be putting all our extra income toward my student loan payment? Or should we be stashing it in savings as an extra cushion? Should we take advantage of forbearance on my student loans or continue making payments since we are able to?  

When our $3,400 stimulus check ($1,200 each for two adults, $500 each for two children) hit our bank account in April, we thought about all the ways we could use it. It would certainly help pay for groceries, an expense that has grown during social distancing. Or we could put it toward our $1,600 in monthly childcare expenses, something we have continued to pay for whether or not our daycare stays open. Or we could stash it all in savings and know we have a safety net should my husband lose his job or I lose all my clients. 

After weighing all the options, I scheduled an online payment of $1,969 — the last payment for my undergraduate student loans. We made this decision because we already have a $5,000 emergency fund, and while we do sometimes worry that may not be enough, we also knew paying off my student loan debt would free up $500 in monthly cash flow, giving us some wiggle room in other areas of our budget or allowing us to continue to build our savings. 

We were on track to pay off my student loans by the fall of 2020, but our stimulus check helped us achieve this milestone four months sooner than we would have otherwise. 

Paying off my student loans feels like a small victory amidst so much suffering, but we were only in a position to do so because of our financial, class, and racial privilege. 

As white-collar workers with the ability to work from home, we’ve been able to remain employed, and as a result, our income has remained stable. Everyone has lost something to some degree during this crisis, but our struggles pale in comparison to those who have lost their livelihoods or loved ones to COVID-19. 

We had a choice in how to spend our stimulus check. But for so many others, that assistance is a means for survival, keeping the lights on or food on the table. As far as living through a pandemic goes, we are really in a best-case scenario — we have financial security, we have our health, and we have each other.

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