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How to Pay Off Student Loans

Here are 6 strategies to help you pay off your student loans faster.

Adrienne Ding
Adrienne Ding

While some may like to say you can’t put a price tag on a good education, many graduates today face the difficult task of paying off overwhelming amounts of student loans. This can be really difficult to manage while also trying to pay their bills, save for retirement, and start a family. In 2020, the national student loan debt reached a record-breaking $1.57 trillion, doubling its rate in previous years and becoming the second-highest consumer debt category. The exponential increase reveals how serious the student debt crisis has become for borrowers of all demographics and age groups.

To combat this crisis and help you pay off your student loan debt faster, we’ve put together this guide listing six strategies to level up your student loan repayment plan.

  • Make additional payments.
  • Consolidate and refinance.
  • Stick to a budget.
  • Pay bi-weekly.
  • Automate your payments.
  • Apply for loan forgiveness.
  1. Make additional payments

If your income allows it, start by making larger payments to cut the principal more quickly and reduce the total payoff time. By minimizing the remaining principal balance, you’ll be able to reduce the repayment period and the total interest that is accrued.

Here’s an example: a $30,000 (national average) student loan with 5 percent interest and a 10-year payback period would cost you $318.20 a month and you would pay just over $8,000 in interest over the life of the loan. But if you were to pay $566.14 each month, you would only have a 5-year payback period and pay less than $4,000 in interest in that time.

Using a student loan calculator, you can see how much you are expected to pay monthly and deduce the amount that’ll enable you to repay the loan in your target timeframe.

2. Consolidate and refinance

The process of student loan refinancing involves taking out a new loan to pay off your existing loans. Refinancing your loan for a lower interest rate or shorter repayment period helps you save more money and pay off your loans faster (however, this service is typically offered only through private lenders). Here’s how you can start the process:

  1. Check your credit score - To refinance your loans, most lenders require you to have good credit. But even if your credit score is on the low side (i.e., below 650), there’s no need to fear! You can always take steps to improve it or seek out a qualified co-signer.
  2. Shop around - No matter which type of loan you’re refinancing, always shop around. Doing your research and checking with multiple lenders is one of the most important steps to ensure that you’re getting the best deal possible.
  3. Choose a loan offer - Once you’re approved, lenders will offer you a selection of repayment options to decide from, which will impact how much you pay on your loan overall as well as your monthly payment plan. Remember to keep in mind your budget and financial goals when selecting the most suitable loan option that meets your needs.
  4. Send in an application - At this last step, you’ll essentially be going through a hard credit inquiry. You’ll need to provide documents verifying your income, as well as details about your existing loans and any other necessary financial details. After all your information/details are verified, the lender will either send you the funds directly or pay off your former loans. Then you will begin payments as soon as funds are disbursed.

3. Stick to a budget

Knowing how to manage your finances properly is essential to paying off your loan quickly. By understanding and planning your monthly/annual cash flow, you can reduce unnecessary spending and avoid falling off the budgetary wagon.

4. Pay bi-weekly

Paying bi-weekly is another smart way to make extra payments and reduce your debt more quickly. Rather than paying every month, cut your bill in half and pay that amount every two weeks. This leaves you with 26 biweekly payments instead of the equivalent of 24 bimonthly ones. Even though this simple strategy sounds like it won’t do much, it’ll trick you into adding one extra payment to your loans each year, which will shave time off your repayment period.

You can use a biweekly student loan payment calculator to figure out how much time and money you can save by implementing this method!

5. Automate your payments

Automating your payments guarantees that you’ll never miss one, which is important for building up your credit score. In addition, federal student loan service officers and many private loan services offer an interest rate deduction of 0.25% when you enroll.

While a quarter-point interest rate discount may seem measly, it’s a considerable amount of savings over time if you’re spending years paying off your student loans. Every dollar counts, and any decrease in your interest rate will help get you one step closer to paying off your student loan.

6. Apply for student loan forgiveness

You can eliminate a part of your student loan debt by applying for student loan forgiveness. There are numerous programs, but each has its unique requirements and strict approval standards. These programs include Public Service Loan Forgiveness, Teacher Loan Forgiveness, and Closed School Discharge, to name a few.

The most well-known program is PSLF, short for Public Service Loan Forgiveness. To be eligible for this option, you must be employed full-time in a public service position by a qualifying employer (government or non-profit organization) and make 120 qualifying monthly payments under a qualifying repayment plan.

Another option is the Teacher Loan Forgiveness program, which forgives up to $17,500 on your Direct Loan or Emergency Federal Employee Leave (EFEL) Program loans. You can qualify if you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency.

Remember, these are just two of the options available. Before deciding on what program to apply for, research these programs thoroughly!


Paying off your student loan debt is by no means an easy task. But the key to paying them off sooner rather than later is to tackle your student loans proactively. Fortunately, there are a lot of great strategies you can implement.

Personal Finance