How can I pay off my student debt faster?
And while you’re paying off your loans, you could miss out on meeting other important financial goals, like buying a house, starting a family, or saving for retirement. Take it from me. I’m in my mid-40s and still repaying my student loans.
Wouldn’t it be nice to get rid of it sooner than that? Thankfully, tons of strategies can help you pay off student debt faster — and the faster you pay them off, the faster you can get on with the rest of your life.
How to Pay Off Your Student Loans Faster
Student loans can eat up a big chunk of your paycheck, leaving you strapped to pay for much else. So if you want an upgraded lifestyle, you likely need to offload those loans as fast as possible. That means adopting a few key repayment strategies.
1. Avoid Consolidating Your Student Loans
You may have graduated with several loans. And you may have heard of student loan consolidation as a way to manage them all.
Student loan consolidation refers to combining multiple student loans into one. In essence, you take out one large loan to pay off several smaller loans.
But it isn’t always the best strategy for paying off your loans quickly.
The Hidden Downsides of Student Loan Consolidation
Consolidation doesn’t change your interest rate. And when you consolidate, any outstanding interest is added to your principal balance (capitalized). That means you’ll then be earning interest on top of interest.
So there’s little benefit to doing it. Think carefully before taking this step because you can’t undo it.
And contrary to popular belief, it’s not the only way to pay all your loans in one place with a single payment. These days, the U.S. Department of Education does a relatively good job of ensuring a single servicer manages all your loans.
In that case, you typically make one payment that covers all your loans. Generally, you only have to make multiple payments if you have multiple servicers or a mix of federal and private loans.
Another common myth of student loan consolidation is that it lowers your payment. It can if you enroll in an income-driven repayment plan, but those aren’t typically the fastest ways to pay off your loans.
And when they consolidate, many borrowers end up extending the loan period as much as 30 years, potentially increasing the amount of time it takes to pay it back.
Besides, if you have private loans, you can’t consolidate them with your federal loans. The only way to combine federal and private loans is with refinancing.
An Alternative to Student Loan Consolidation
If you’re eager to accelerate your student loan repayment without changing your loan terms — or anything else about the loan — then consider Chipper, an easy-to-use app that makes it easy to put your spare change toward student loan payments.
Just spend like normal and let Chipper “chip” away at your debt. The app automatically rounds up purchases on your linked debit or credit card to the nearest dollar and puts the difference toward your loan balance. So that $8.25 sandwich becomes a $9 charge — $8.25 for the restaurant and $0.75 for your loans.
It doesn’t sound like a lot, but every bit adds up. By Chipper’s calculations, a single $35 monthly roundup saves the average borrower $1,000 in interest. That’s serious money.
2. Refinance Your Student Loans
Refinancing your student loans involves working with a private lender to replace your existing loans with a single new loan with a lower interest rate.
If you refinance federal student loans, you give up the benefits that come with them, including more flexible repayment options, generous deferment and forbearance terms, and the potential for loan forgiveness. Thus, it’s generally best to avoid refinancing federal student loans.
But if you’re determined to pay them off quickly, student loan refinancing can help by reducing the overall amount you have to repay. Reducing your interest rates means less interest accrues over time. Thus, the total amount will be lower, and you can pay them off faster.
For example, if you repay $37,000 in student loans over 10 years at 7%, your loan will have cost you a total of $51,552. But if you can refinance at 3% interest, it will only cost you $42,873. That’s a savings of $8,679.
Best of all, your monthly payment will be lower. At 7% interest, your monthly payment will be $430 with a 10-year repayment term. If you keep the same repayment term and refinance at 3%, your new monthly payment will be $357.
And that’s where the real magic happens. Instead of paying the minimum, you keep paying the old $430 monthly payment. That lets you pay off your loans in just over eight years, almost two years early. Plus, you’ll save even more money — an additional $2,786.39 in interest.
Only the most creditworthy borrowers qualify for the best rates. You must have good credit with a high credit score (typically above 700) and sufficient income to demonstrate an ability to repay the debt. So your savings might vary.
You can see what kinds of rates you qualify for using a tool like Credible, which matches you with prequalified rates from up to eight lenders without impacting your credit score.
Applying with a co-signer may help you achieve even lower student loan interest rates.
3. Activate Autopay Discounts & Interest Rate Reductions
Another way to reduce the amount of accumulated interest is to activate any interest rate reductions for making automatic payments. Autopay allows your servicer to automatically deduct your monthly payment amount directly from your bank account every month.
Signing up for autopay typically shaves 0.25% off your interest rate, whether you have private or federal loans. It may not be the world’s biggest discount, but every penny counts. Plus, autopay means you won’t get hit with fees or penalties for accidentally missing payments.
If you have private or refinanced student loans, some lenders, like Citizens Bank and Laurel Road, offer additional interest rate reductions for opening accounts with their bank branches. That may be a perk you want to look for when choosing a refinance lender.
4. Stick to the Standard Repayment Schedule
The standard repayment plan for federal student loans is 10 years. Ideally, you don’t want to be in repayment longer than that. And if you’re on the fast track to paying off your loans, you may even take less time by employing other repayment strategies.
There are many repayment options available for student loans. But the longer you take to repay them, the more trapped you could become thanks to accruing interest.
It’s when borrowers take advantage of multiple deferments, forbearances, and extended and graduated repayment plans that you hear student loan horror stories. For example, many talk of repaying two or three times what they borrowed or getting stuck taking their debt to the grave.
According to statistics compiled by the Education Data Initiative, the average time students take to repay their loans is 20 years. But if you opt for that length of repayment, you’ll be stuck in repayment a decade longer and repay thousands more in accrued interest.
To get an idea, play with the loan simulator on StudentAid.gov. It shows you potential monthly payment amounts, estimated payoff dates, and total amounts you’d have to repay under different repayment plans.
Then, if you’re already on a longer repayment term, ensure you pay off your loans in 10 years or less by paying the simulator’s higher estimated payment for that plan rather than the minimum you owe.
5. Pay Down the Principal First
Your monthly student loan payments cover your principal, accrued interest, and any owed fees. But at the beginning of your loan, most of your payment goes toward interest and fees, with very little paying down the principal balance.
However, interest accrues according to the current principal. So any time you reduce the principal, you reduce the amount of interest that accumulates and, therefore, the overall amount you have to repay. That enables you to repay your loans faster.
To do that, you can send more than your minimum payment. Even a small amount makes a difference.
For example, if you make your regular $430 per month payment on a 7%-interest loan and then tack on an extra $20 every month, you’ll shave seven months and almost $1,000 in interest off your student loan repayment.
But whatever you do, don’t just send the money. Servicers automatically apply your funds to accrued interest first and then to the loan with the highest interest rate. So if you want to be strategic in how you repay your loans, tell them exactly how you want your money applied.
You can do that by indicating on your servicer’s website how you want to apply your additional payments. For example, you can tell your servicer to apply any extra amount to the principal of the highest-rate loan first.
But check afterward to ensure the loan servicer applied your funds correctly. Contact customer service if something doesn’t look right.
Fortunately, the balance flips toward the end of the loan, and you’re paying off more of your principal than the interest and fees.
6. Apply for Public Service Loan Forgiveness
To qualify for student loan forgiveness, you must enroll in an income-driven repayment plan. Under ordinary circumstances, income-driven repayment could string out your payments for as long as 20 to 25 years.
But if you qualify for Public Service Loan Forgiveness (PSLF), you could have your remaining loan balance forgiven in as little as 10 years. Meanwhile, you’ll make payments based on your income.
Thus, PSLF could help you pay off your loans faster than you otherwise could, especially if you have high debt compared to income. But it could also save you significant money since you may be paying significantly less per month than you otherwise would. That’s a double win if you qualify.
To qualify, you must make 120 payments (10 years’ worth, though they don’t need to be consecutive) while working full time in a public sector job.
Doctors working in most hospitals qualify. So do public defenders, firefighters, police officers, and public or nonprofit school teachers. Pretty much anyone working in a public or nonprofit job, such as a public accountant working for the government or a nonprofit or social worker, qualifies. However, politicians and government contractors do not. See the list of eligible jobs at StudentAid.gov.
7. Take a Job With a Loan Repayment Assistance Program
There are hundreds of federal, state, and local programs collectively known as loan repayment assistance programs (LRAPs). They help borrowers get some or all their loans forgiven. Typically, you must work in a specified career field in a high-need area for a certain number of years to qualify.
Most LRAPs are for service fields like health care, teaching, and law enforcement. But there are some available for other types of careers, such as automotive professionals. So it’s worth looking to see if you qualify for one.
Note that LRAPs often require working in less desirable locations for low pay. That’s their draw. The LRAP is a benefit offered to attract quality candidates to fill high-need positions.
See our article on jobs that qualify for repayment assistance to determine whether you could be eligible for an LRAP.
8. Look Into Employer Repayment Benefits
Public agencies aren’t the only ones with student loan repayment programs. Thanks to recent tax incentives, a growing number of employers are also establishing employee student loan repayment assistance programs.
One of the most significant shifts in workers’ financial priorities over the last decade has been away from saving for retirement and toward paying off student loans. That’s placed a considerable emphasis on student loan repayment as a sought-after job perk over 401(k) matches.
Fortunately, in August 2018, the IRS approved an Abbott Laboratories plan to qualify employees who contribute a portion of their paychecks toward their student loan payments for the company’s 401(k) match. And other companies have followed suit.
More recently, the Consolidated Appropriations Act of 2021 has enabled employers to contribute up to $5,250 tax-free annually toward each employee’s education debt. Though the provision is only through Dec. 31, 2025, some experts believe it could become permanent. And even just four years of this benefit is over $20,000 of student debt relief.
Although not every employer provides repayment assistance, it’s worth looking into. Ask prospective employers if they have a program set up. Or ask your current human resources department if your company has one. Just like your company’s 401(k) match, if you don’t use it, it’s like leaving money on the table.
If your company doesn’t offer this benefit, speak with human resources to let them know about the advantages of providing it. It helps them attract top job candidates, retain the best employees, and reduce stress on the overall economy.
9. Reduce Your Expenses
By the time you graduate, you’re likely more than ready to put the days of being a broke college student behind you. But if you’re serious about paying off your student loans quickly, you may have to keep living like one for a bit longer.
Thus, the most vital part of your repayment plan is your budget. So if you haven’t already, make a budget with your student loans in mind.
Building your monthly budget around your student loans could help you avoid payment options like deferment or forbearance or getting stuck in income-driven repayment plans for decades. These kinds of things cause borrowers like me to continue repaying loans into middle age or beyond.
Once you have your budget, identify places you can cut back to free up money to put toward your student loans. Ways to save are individual to every person, but a few ideas include canceling cable services or gym memberships or forgoing eating out.
It may mean going without some luxuries for a while. But remember: This part of your life won’t last forever. The idea is to make a short-term sacrifice to get the debt out of your life as quickly as possible.
10. Ask for a Raise
If you can’t reduce the size of your loan, the next step is to search for any and every way to throw extra money at it. Boosting your income is a crucial step, and if you can do that without adding too much additional stress, all the better.
Note that race and gender play a role in your likelihood of getting a raise. And you’re also potentially more or less likely to get a raise based on your location and job position. But your chances are likely higher than you think, regardless.
So if you’re doing good work at your job and making a contribution you feel your employer isn’t adequately compensating, it’s worth speaking up.
Just don’t let your raise disappear due to lifestyle inflation. Immediately apply any salary boost toward knocking out your student loans. You’ll be glad you did once they’re gone.
11. Switch Jobs
You may love your current job, but if the pay isn’t enough to manage your current expenses, it might be worth transitioning to a higher-paying career field.
It’s the No.1 move I wish I’d made a decade ago. I graduated with a Ph.D. and six-figure student loan debt hoping to be a professor in an era when higher education is amid a massive crisis that’s only getting worse.
As a result, I got stuck for well over a decade in what The New York Times calls “adjunctopia” (along with 70% of other college instructors).
Meanwhile, I used my Ph.D. to work for minimum wage as part-time faculty at multiple colleges and universities, often working more than 60 hours per week. Additionally, I got a side gig as a writer because even working at three schools at once wasn’t enough to make ends meet.
Today, I make more money writing than I ever did teaching. But over the past 10 years, I’ve deferred, forbore, and put my loans into income-driven repayment because I couldn’t manage on my teaching income. And thanks to a loophole in Public Service Loan Forgiveness, adjunct teachers don’t qualify.
Using these federal repayment programs designed to help with financial hardship and low income has caused my loan balance to grow to twice what I originally borrowed thanks to payments too low to pay off the quickly accruing interest.
It’s one of my biggest regrets and the reason I write about student loans today.
If I could go back in time, I would have switched careers. As much as I’ve enjoyed teaching, the weight of crippling debt that influences every aspect of your life just isn’t worth it.
If you can make more money and pay off your loans quickly, you probably should. You can always go back to what you love once you’ve paid off the loans.
12. Take on a Side Hustle
If asking for a raise or switching careers isn’t an option, picking up a side hustle should be your next move.
Just be careful it doesn’t take too much time or focus away from your primary job. If you put your full-time job at risk, you could jeopardize being able to make your student loan payments at all.
The best side gigs for paying off student loans have a low cost of entry. They don’t require you to invest in a lot of equipment, classes, or licensing.
Service gigs like babysitting, elder care, or pet sitting don’t require much overhead. Check out Care.com to get started. If you’re willing to care for animals, including boarding them overnight, try Rover.
Other side gigs that let you work around your full-time job include sharing economy jobs like driving for Uber or Lyft; becoming a delivery driver for DoorDash, Instacart, or Postmates; or becoming an Amazon Prime shopper.
13. Sell Your Stuff
If you can’t take on a second job, turn your clutter into cash. Look around the house for anything you can sell.
For example, you can recycle used electronics, including nonworking devices. And while the small payouts may not seem like much toward a student loan, every penny counts.
Take our hypothetical $37,000 in student loans at 7% interest. Paying just an extra $100 per year over 10 years lets you pay off your loan five months earlier, saving $1,150 in interest. And it’s likely possible to find $100 of old, unused stuff to sell just by looking around.
Granted, it’s unlikely you can pay off your student loans just by selling your old stuff. But you can use this tactic to take a bite out of your loans from time to time, reducing the overall repayment term.
Once you’ve gathered your stuff, host a garage sale or take your things to a consignment sale or shop. For a wider audience, go online. List locally with a Facebook group, Nextdoor, OfferUp, or Craigslist. Or if your stuff is small and shippable, list it on Amazon or eBay.
14. Rent Out Your Stuff
If you’ve got spare things you aren’t using, or even extra space, you can make money renting it to others.
If you have a spare room, accessory dwelling, or even vacation home, you can make significant money as an Airbnb host. There’s a bit more work involved, as you’ll need to routinely clean and set up the space. But it won’t be nearly as time-consuming as a second job.
There are plenty of other ways to rent out your space. A patio can become an event space, or a loft can become a photo backdrop. A garage can become a workshop. Your backyard shed or spare closet can store someone’s excess stuff. There’s no limit to how creative you can get to make money from your space.
For help finding people who need your spare space, list it with a service like Neighbor, Store At My House, or Peerspace. The added benefit of going with a service is most also provide insurance. But be sure to read all the legalese before signing up.
In addition to renting space, you can also rent your things.
You can also rent other in-demand stuff you have around the house. For example, you can list sporting equipment like bikes, skis, or paddleboards with SpinLister. Or let people rent your tools with the Sparetoolz app.
15. Build Savings You Can Put Toward Student Loan Payments
Micro-investing is another way to create extra amounts of money to put toward your student loans. Micro-investing lets you invest small amounts, including your spare change. So you can save a lump sum to put toward your student loans without a major impact on your budget.
Even better, your investments grow with interest, making it a way to earn passive income. If you’re lucky, that interest income could even surpass the interest hit you’re taking on your student loans.
And the government caps the interest rate on federal student loans at 8.25%, which means it can’t go any higher.
But most borrowers don’t have these higher-rate loans. For example, the federal student loan interest rate for undergraduate direct loans for the 2021-22 academic year is 3.73%. And the last time the undergraduate rate was above 6% was in 2008.
Meanwhile, the average market returns are 7.08%, adjusted for inflation. So it may be beneficial to invest money for a lump-sum payment rather than simply send extra payments to your student loan servicer.
There are several micro-investing apps that let you save and invest automatically by rounding up your change to the nearest dollar when you spend using a linked debit card. It’s an easy way to make saving effortless. Acorns and Stash are two popular options.
16. Use Cash-Back Savings
Sign up for an account with Upromise, and you can use cash-back savings on purchases you make regularly to help pay down your student loans.
Upromise then automatically deposits funds in your linked 529 account or savings or checking account (opt for a high-yield savings account to save even more). Then, you use those funds to pay down your student loan debt.
Additionally, you can apply for a Upromise Mastercard for even more cash-back bonuses.
17. Sign Up for an Education Registry
Remember all those birthdays when your aunts, uncles, and grandparents gave you cash toward your college savings? That doesn’t have to stop after you graduate. And wouldn’t you rather have Aunt Edna kick in toward your student loans than get you another tchotchke you can’t use?
Register your student loan account with Gift of College, an education registry. Then, share your profile with friends and family. Every gift-giving occasion, they can contribute funds directly to your debt.
18. Turn Windfalls Into Extra Payments
One of the best ways to pay down your student loan debt fast is to make more than the minimum payment. It knocks out the principal faster and reduces the overall amount of interest you have to repay.
That’s not a realistic monthly expectation for most people. But even a few one-off extra payments can make a significant impact on your student loan balance.
So any time you get extra cash in the form of a windfall — whether from a work bonus, a tax refund, or an inheritance — put it toward your student loan payment. You can even create your own windfall occasionally by participating in a no-spend month.
19. Make Biweekly Payments
A good trick to put extra money toward your student loans without even noticing is to make biweekly payments. Splitting your loan payment into two smaller monthly payments might even make it more manageable if you have a tough time paying it all at once.
For example, let’s say you owe $430 per month. Instead, you could pay $215 every two weeks. That way, if you get paid every two weeks, all the money isn’t hitting one paycheck.
But that’s not the only benefit.
There are only 12 months per year. But if you pay every two weeks, you’re making 26 payments, or 13 full payments — one extra — every year. That’s because months aren’t four weeks, as we tend to think. Every third month is actually around five weeks.
So you can shave almost two years off your repayment term and $3,870 in interest (assuming you’re paying 7% interest).
20. Use Proven Debt-Repayment Strategies
As long as you didn’t consolidate or refinance your loans, you can use debt-repayment strategies to pay off what you owe faster.
To see what you owe all in one place, check your credit report. You can use a credit score subscription service like Credit Karma or Credit Sesame, which lets you see how much money you owe to whom and monitor your credit score.
If you only borrowed federal student loans, log into StudentAid.gov. It’s a one-stop resource for checking on the life cycle of all your federal student loans, from approval through payoff.
Then choose a debt payoff strategy.
- Avalanche Method. Pay the minimum amount on all but your highest-rate loan, which you throw any spare change you have at. Once that’s paid off, move to the next.
- Snowball Method. Pay the minimum amount on all but your lowest-balance loan, sending any extra cash to knock that one out fast, then move on to the next-lowest-balance loan.
Choose the best strategy based on what’s right for you.
The debt avalanche method prioritizes high-interest debt. The rationale is simple: Your higher-rate loans are hurting you the most. So get rid of them the quickest.
The debt snowball method is costlier, but it has its advantages. It lets you knock out small balances quickly, boosting morale. And that positive feeling can help keep you going, especially if it takes many years to pay off your student loans.
Which one you choose depends on your circumstances and personal preference.
There are some cases in which it makes sense to pay off the lowest balances first. For example, if you have loans with unfavorable terms, like a lack of deferment options or the ability for co-signer release, it may be best to offload them faster.
Also note that if you have both private and federal student loans with the same interest rates, you probably want to get rid of the private loans first since federal loans typically have better terms.
And if you have any variable-rate loans, you may have to revisit the order you pay your loans in from time to time. The Federal Reserve periodically alters interest rates, so your variable-rate loans could get more or less expensive.
For more information, read our article on debt-repayment strategies, including avalanching and snowballing.
Let my own experience be a cautionary tale. Interest that accrues over a long period keeps you in repayment for far longer and ends with you repaying twice or more what you originally borrowed, even with the promise of federal student loan forgiveness programs, which aren’t always worth it.
That said, as wonderful as it will feel to be rid of your student loan debt, there are some instances when getting rid of it as fast as possible isn’t the best approach. There may be other priorities you should tackle first.
For example, if the interest on your student loans is relatively low but you have high-interest credit card debt, focus on paying the credit card debt off more quickly.
You also want to ensure you’re saving enough for other long-term goals, like retirement. Don’t put off retirement savings until after you’ve paid off your student loans.
Retirement investments need the benefit of interest compounding over a long enough period. So you lose out significantly if you wait, especially since the returns from investing are typically higher than the interest on most borrowers’ student loans over the long term.
Thus, for any student loans with interest rates less than 5%, you’ll likely net more in the long run by paying the minimum on your student loans and focusing on investing instead.
The best tactic is often to find a balance between paying off your student loans and meeting your future financial goals.
For example, if your company has a 401(k) match, ensure you’re at least contributing the minimum to get the match before paying more than the minimum on your student loans. Otherwise, you’re missing out on free money.
But if you have all your financial ducks in a row and student loans are the last thing holding you back, then pay them off as fast as you can.