Sonia Lewis knew she had a problem when she couldn't afford nachos.
Forced to turn down a friend's invitation to dinner because her bank account was overdrawn yet again—something that happened so frequently she called herself the "Overdraft Queen"—Lewis realized just how much trouble she was in. Her grandmother, who’d been her "financial security blanket," had recently died. And her unexpected death forced Lewis to accept reality: Nobody was left to bail her out if she couldn’t pay her bills.
“If you fail with money or if you win with money, it’s going to be on you,” she remembers thinking.
That was in 2013, when Lewis was making $45,000 a year but owed $80,000 on her student loans and another $6,000 in credit card bills. Today, the 31-year-old runs a popular financial coaching business that focuses on helping people pay off their student debt, serving up to 500 clients a month, she says, and her own debt has been whittled down to $20,000.
Here's how she turned things around—and her best advice for how you can, too.
Money Management 101
Lewis may have been broke, but she had a steady job and paycheck. It's just that she had no idea how to manage the money she was making. After declining her friend’s invite for nachos that night, she started Googling and stumbled upon advice from author and radio host Dave Ramsey. It spoke to her—so much so she stayed up half the night watching his videos on beating debt, and then she signed up for a local class of his Financial Peace University. (She actually had to negotiate with the church who was sponsoring it, agreeing to pay them in installments because she couldn’t afford the roughly $110 class fee.)
Thanks to a scholarship, Lewis had been able to earn her bachelor’s degree in anthropology without borrowing. But when she went to graduate school for a master's in education, she took out $80,000 in federal student loans. Working in college admissions and academic advising, she didn't feel she earned enough to make a dent in her student debt. On top of that, she was a self-described shopaholic, and her credit score was pathetic.
Armed with Ramsey’s no-nonsense philosophy, she started selling possessions she didn't need. She went to all the local flea markets and posted purses and dresses on Facebook. Sixty days later, she'd cleared out her $6,000 in credit card debt.
Next she turned to her student loans, teaching herself about the various repayment plans for federal loans and talking through each one with her loan servicer, the private company that manages the repayment process. She now knew enough to know what to ask. But, she remembers thinking, what about all the people who didn’t?
So she started coaching. First it was her friends in Philadelphia and people she knew from her church. And then it was their friends, and their cousins, and their co-workers. Her services spread quickly enough via word of mouth that in 2016, she turned it into a business: The Student Loan Doctor, LLC.
The Doctor Is In
Lewis’s business grew slowly but steadily through 2016 and 2017. She spoke at events around Philadelphia, recruiting local clients. In the beginning of 2018, though, Lewis was featured in an interview on The Shade Room website, and The Student Loan Doctor blew up.
In a matter of days, she gained 27,000 new Instagram followers and heard from hundreds of people asking for advice. Since then, business has boomed, growing from serving about 60 clients a month to 500, Lewis says.
The first call with Lewis or one of her coaches is free, followed by a $35 consultation call. From there, services are a one-time fee of between $250 and $400. They usually work with a client closely for one or two months.
The counseling takes part in two broad segments. First a coach reviews the client’s type of student loans and talks through eligible repayment plans, explaining what they all mean. Borrowers who are struggling to afford to their monthly payment, for example, may be eligible for a plan that ties their bill to how much they earn. The coach then looks at a client’s existing budget to see where they could cut spending or bring in new income to afford their new monthly payments.
Lewis is not a student loan or financial aid professional, and she has no formal training in financial planning. But she says that doesn’t seem to bother her clients. In fact, she—and the six other coaches she employs—may be able to connect with clients in a unique way because of that, she says. There’s no judgment about falling behind on debt, relying on credit cards, or living paycheck-to-paycheck, because she’s made those money mistakes, too.
“We’re not making anyone feel bad about where they’re at,” Lewis says.
And when clients have questions or requests that are out of her league, Lewis says she has a preferred list of financial planners and accountants to refer. (One important note here: With The Student Loan Doctor, you're paying for the coaching, not to actually enroll in a repayment plan. You don't have to pay to lower your monthly payment or to switch repayment plans on federal loans. Anyone can do that for free by calling their student loan servicer. Here's a guide to dealing with your loan servicer and an explainer of the repayment plans that may lower your monthly bill.)
Sonia's Top Tips
Lewis is aiming to pay off her student loans by the end of this year. She’s got about $20,000 left. Based on her own repayment experience and the questions she regularly gets from clients, here are her top three tips for borrowers with student debt:
- Know Your Numbers: Figure out how much you owe. You can check the National Student Loan Data System for any federal loans. For private loans, you may need to get a credit report. Then, spend some time on your loan servicer's website and review your total debt, types of loans, and interest rates. There are times when there are errors, especially as debt is transferred from one servicer to another, Lewis says. Make sure all your previous payments are counted. If you find an error, you should first try to handle it directly with the servicers, but there is a federal loan ombudsman group you can turn to if that doesn't work.
- Research Loan Forgiveness: The federal government offers loan forgiveness for those who work in public service. The program requires borrowers to make 120 monthly payments while employed full-time in a qualified job. (Here's more information about how to qualify.) Depending on how much you owe, it may be worth switching jobs to a qualifying employer, Lewis says. There are also other forgiveness programs, sometimes at the state and local level, aimed at nurses and teachers. Forgiveness programs can be a life-saver for some borrowers, but they're not instantaneous. “Nothing is going to disappear or be fixed overnight," Lewis says.
- Think About Your Long-Term Housing Plan: Many of Lewis's clients come to her with questions about how to balance competing financial goals, like buying a home or launching a business while earning or paying off a graduate degree. For some, Lewis says it may make sense to buy a home before returning to graduate school. That's because your ability to borrow federal student loans won't be impacted by having a mortgage, but the reverse can happen. Too much student debt may make it harder to qualify for a mortgage, and recent research suggests student debt is driving down the homeownership rate. For clients who already have student debt and want to buy a home, Lewis points them toward a relatively new policy from Fannie Mae, the federal mortgage program, that changes the debt-to-income ratio calculation for student borrowers and makes it easier for qualify.
Lewis says she knows many people are miserable because of their money situation—she was, after all, one of them. And she also knows changing that situation takes commitment. To motivate them, she asks clients to envision what their life would be like without debt.
"Your financial legacy can be determined by the things you do or don't do now with your money," she says.