Paying Off Student Loans

Michael Brown Updated: December 13, 2022

Debt can feel like a weight pressing down on you, but ignoring it doesn’t make things any better. To chart a path out of debt, the first step is figuring out how much you owe. Most people have a vague idea of how many loans they have, but many avoid facing the total head on.

The only way to get control over your finances is to take a full inventory. Add up all of your student loans, credit card balances, car loan balances, lines of credit, overdue bills, and other debts. The grand total can come as a shock, but once you know exactly what you’re dealing with, you have several avenues to explore -- increasing your income, cutting back your spending, and decreasing the sum that you owe.

The last is the one that people overlook most often. But some debts, like medical bills, can be negotiated down. High-interest credit card balances can often be transferred to a new card with a 0% introductory APR. And student loans can often be refinanced or consolidated, saving thousands of dollars over the life of the loan.

8 Tips to Help You Pay Off Student Loans Faster

Paying off student loans isn’t easy, but the following strategies can help you get out from under your debt faster.

1. Refinance for a better rate

Don’t pay more interest than necessary. Refinancing or consolidating your loans could cut hundreds of dollars off of your monthly payments and save you tens of thousands of dollars over the life of your loan. Most federal student loans charge everyone the same percentage, a one-size-fits-all interest rate that is often higher than what private lenders offer, because it has to account for high-risk applicants who are more likely to default or not finish their degrees. People who have built up their credit in the years since graduation are often better off getting a new loan on their own merits.

2. Make extra payments any time you can

With most lenders, there is no penalty for paying early. So any time you have extra money – for example, if you get a tax refund, a bonus at work, or have a month with a third paycheck – it’s smart to make an extra loan payment. Someone with $35,000 of student loans and an interest rate of 6.8% would typically have to pay about $400 a month for 10 years to get out of debt. Adding an extra $100 a month would cut the payoff time by about 2½ years and save $3,583 in interest.

To get the most benefit from your extra payments, be sure to put them toward your highest interest loans first. Start by logging in to the Federal Student Aid website to find out your federal loan interest rates. If you have private loans, contact your student loan servicer to find out your rates. Rank them accordingly and put extra money toward the highest rate loans first.

3. Make a 3- to 5-year plan

It’s easier to make budget sacrifices when you know that it’s temporary. Focus on the end date of your loan, and consider doing things like living with a roommate or keeping an older vehicle until then. Returning to the nest, eating Ramen noodles, and embracing the college lifestyle for a bit longer might not sound that appealing, but committing to your goal will make it all worthwhile.

4. Set up autopay

You’re less likely to overspend if you schedule your loan payments to be debited as soon as you get paid. You won’t miss the money as much if you “take it off the top” and don’t see it in your account. Also, most lenders will give you a 0.25% interest rate discount when you sign up for automatic debit.

5. Explore freelance and “side hustle” opportunities

Doing freelance or part-time work can help keep debt down during and after college. Whether it’s photography, dog-walking, web design, or catering – anything you can do to earn extra money will get you out of debt faster. Sites like Upwork and iFreelance have a wide range of short-term and long-term projects. You can also participate in the sharing economy with companies like Uber, Lyft, Airbnb, and TaskRabitt. Earning an extra $500 a month could cut your payoff time by 5 years or more, depending on how much you owe.

6. Use the buddy system

The buddy system is not just helpful for exercising or losing weight. A lot of people find paying off student loans easier if they have an “accountability partner” who shares the same goals. Things like shopping or going to happy hours can sabotage your financial plans. A buddy can help you stay motivated to cook at home, pursue extra income, decorate with “upcycled” thrift finds, travel cheaply, and avoid splurges. With a little creativity, it can also be fun. You can also read debt success stories and subscribe to couponing and savings blogs.

7. Don’t be afraid to ask for a raise

If you’ve been at your job for a while, you’ve been giving 100 percent, and especially if you have an annual review coming up, consider asking for a raise. Start by keeping track of ways you’ve helped your company save money or make money. Do some research about salaries in your industry and how yours compares. A week or so before your review, schedule time with your boss to discuss your goals with the company and make your case for a raise. They might say no. But if they say yes, you will get a bigger paycheck.

8. Monitor your credit score

Paying your student loans on time each month helps you establish a good credit history. It’s smart to monitor your FICO score for a variety of reasons like buying a car or home, and protecting yourself against identity theft. But as your score rises, you also might qualify for lower interest rates on your outstanding balance – particularly once your score gets above 700. Everyone is entitled to a free credit report every 12 months. You can check yours at