Your Guide to Paying Off Student Loans Quickly

Paying Off Student LoansHave you heard stories about people paying off student loans early? A lot of them are true. There are people who've paid off $80,000 of student loan debt in under five years. So you probably want to know how they did it. After all, you're likely motivated to pay off your own loan as quickly as possible because you have so many other things that you'd rather do with that money. For example, you might want to buy a new car, purchase your first home, or travel around the world. You just need to pay off that student loan first.

More than 44 million Americans have student loans and probably feel the exact same way as you do. In 2016, the average college student graduated with more than $37,000 in student loan debt.1 Eliminating those loans is a top priority for many of them. In your own case, you may be putting hundreds of dollars a month toward your loans and dreaming about all of the other amazing things that you could be doing instead. So, how do you pay off your student loans fast?

Start by focusing on your mindset. You need to be determined and willing to work hard. You also need to be willing to make short-term sacrifices and know that, in doing so, it's all going to pay off in the end. Just keep your goals in sight and imagine the feeling of freedom you'll have when those debts are paid in full. Think about how happy and accomplished you'll feel on the day when you make your last payment.

To help you achieve your repayment goals, we've compiled a list of things that you can do to start paying off your student loans faster. They range from simple budgeting tips to creative earning possibilities. Check out the following categories and find the inspiration that you need to start working toward financial freedom!


Understanding Student Loan Options & Saving Money Before College

Paying Off Student LoansIf you haven't started college yet, then be sure to take the time to fully understand student loans and all of your other financial aid options. Although getting money for school seems like it should be straightforward, you actually have a lot of potential options to consider. Many students graduate from college or university with several student loans from different providers, including the federal government and private lenders. So you need to decide which types of loans will work best for your situation.

In addition to exploring your funding options, you may also want to consider other ways that you can save for college. After all, if you save money before and during college, then you may not have to take out a loan at all. Or you can at least reduce the amount that you need to borrow. Every little bit counts.


Planning to Pay Off Student Loans While Still in College

If you're currently a college student, then it's a great idea to start thinking about how to pay off student loans. By taking steps now to help reduce your debt after graduation, you can make your student loan debt more manageable. Here are a few things to consider:

  • Apply for grants and scholarships. Make an appointment with the financial aid office at your college or university and ask about the grants and scholarships that may be available. The number of privately and publicly sponsored awards that you can apply for might surprise you. Your eligibility for each award will be based on several factors, such as your level of financial need or current grade point average (GPA). It's worth putting in the effort to apply for grants and scholarships since it gives you a chance at getting free money for your education.
  • Get a part-time job. Consider whether you can manage your course load while working part-time. If you can, then it's worthwhile to start searching for a job that will work with your schedule. You can earn money to put toward your education. Or you can start a savings account and make a lump-sum student loan payment after you graduate. Check out some ideas for high-paying jobs for students, as well as high-paying part-time jobs.
  • Find other ways to make money while in college. In addition to finding a part-time job, you can do other things to make money while attending school. Popular examples include freelancing, tutoring, and signing up for work-study programs.
  • Start paying back your loans before you graduate. Depending on the type of loan you have, you may not have to wait until graduating or leaving school to start paying it back. And with subsidized loans, any money that you pay prior to graduation goes straight to the principal loan balance since interest doesn't start accruing until you have finished or left school. Just be sure to check with your loan officer before making any payments because some lenders will charge penalties for early payments.

Simple Tips for Paying Off Student Loans Fast

You can take quite a few easy steps that will help you repay your student loan more quickly than you may have expected. Some of them are simple strategies for setting up payments, creating schedules, and sticking to budgets. Check out the tips below for a few great ideas:

  • Use a student loan calculator. If you're wondering how to pay off student loans in five years, then one of your first steps should be figuring out the monthly payments that you'll need to make in order to achieve your goal. Using a student loan calculator can help you quickly see if your time frame is realistic.
  • Sign up for automatic payments. It sounds so simple, but many people don't realize that lenders often offer lower interest rates for borrowers who set up automatic online payments.
  • Make your payments on time. And don't let them bounce. Defaulting on payments—or paying them late—will usually result in additional penalties and interest charges. And that will increase the amount of money you need to pay back.
  • Make bi-weekly payments. By making payments every two weeks rather than once a month, you make an additional monthly payment every year. That means you pay down your principal balance more quickly, which can help you shorten the duration of your loan.
  • Pay off your variable loans first. You may have loans with variable interest rates (i.e., the interest rate fluctuates based on the current prime rate). If you have other loans with fixed rates (i.e., the interest rate is guaranteed for the term of the loan), then you should focus on paying off the variable loans first. Doing that reduces your financial vulnerability to fluctuations in interest rates.
  • Claim the student loan interest that you've paid. When you do your annual income tax return, see if you qualify to make deductions for the interest portion of your student loan payments. And if you receive a tax refund, use it to make a lump-sum payment toward your loan.
  • Avoid repayment plans. The goal of most repayment plans is to lower the amount of your monthly payment, which usually means extending the term of your loan. You'll pay more interest and take longer to pay off your loan, so it's best to avoid repayment plans if it's financially possible to do so.
  • Learn how to negotiate. Depending on your vocational field, you may be in a good position to negotiate signing bonuses during the hiring process. You may also be able to negotiate salary increases once you have worked for an organization for a while. When you receive a bonus or raise, take at least 50 percent of that money and put it toward your student loan. Many people who have paid off their loans in five years or less used this strategy.
  • Stay committed to your goals. Going on a luxurious vacation or buying a new car may sound like a great idea, but is it going to set back your loan repayment goals? Most likely it will. If paying back your student loan is your top priority, then make sure that you live within your means, or even below them. Some people continue to live like they're still in college so that every extra dollar they make can go toward their loan debt.

Best Ways to Pay Off Student Loans in 10 Years or Less

Some of the fastest ways to pay off student loans are going to require dedication and commitment. But it will be worth it in the end. Just imagine the liberating feeling that comes from knowing that, in a few years, you'll no longer carry the burden of student loan debt. Surely, any sacrifices you make now will be worth that sense of financial freedom down the road. So, what can you do to make that happen? Check out the tips below and start planning:

  • Make your first payments during the grace period. Most student loan providers allow you to wait six months after graduation to start repaying your loan. But that doesn't mean you need to use that grace period. If you can start making payments immediately, then you'll be putting yourself six months ahead of schedule.
  • Sit down with a financial advisor. He or she can help you explore your best loan repayment options and come up with a budget that helps you meet your goals. If you have many different loans, then you can also review refinancing and consolidation options that may help you lower your overall interest payments or shorten the term of your loan.
  • Create a budget to pay off your loan within three to five years. Paying back your loan in such a short time will require a detailed analysis of your spending habits. You'll need to cut back on luxuries and look at other ways to reduce your costs. Shop around and compare banks and insurance companies to find the ones with the lowest fees and rates. Pack lunches for work and make your coffee at home. Cut back on prepackaged foods, meat, and cheese. You can also consider moving back in with your parents or finding a good-paying job in a low-cost-of-living city in order to cut back on your living expenses.
  • Get rid of your car. If you live in an urban center or region with good public transportation services or commuter programs, then consider selling your car and going without it—at least until your loan is paid off. That way, all of the money you would be spending on gas, insurance, maintenance, and repairs can go straight toward paying back your loan.
  • Ditch the gym membership. Exercise is important, but you can find ways to work out regularly without paying monthly gym fees. Use Meetup to find local exercise groups, and check out the thousands of free workout videos on YouTube.
  • Make additional payments whenever you can. At least once a month, try to make an additional payment, even if it's as small as $50. And whenever you get a bonus, tax refund, or any other unexpected money, put the funds toward your loan. Extra payments go directly toward your principal balance, which can reduce your loan term.
  • Open an investment savings account. Instead of making extra payments on your loan, consider putting that money into an investment account. (Just make sure that you're aware of the risks associated with your chosen investments.) Contribute to that account regularly over a five-year period and then withdraw the money in order to make a lump-sum payment on your student loan.

Grants to Pay Off Student Loans

Here's the thing: There are no grants to help you pay off a student loan after you graduate. However, there are loan repayment programs and other sources of free money that can help you get out of student loan debt faster. So all hope is not lost. Take a look at the following possibilities:

  • Volunteer with the Peace Corps. If you're willing to volunteer your time to international projects, then you may be able to take advantage of perks like lower student loan payments, deferments, and even loan forgiveness or cancellation programs. The exact benefits that you receive will depend on the type of loan(s) that you have and your length of service with the Peace Corps.
  • Volunteer with AmeriCorps. This choice is similar to the Peace Corps, but you get to stay within the country. While you're completing a volunteer mission with AmeriCorps, you might not have to make loan payments. Interest may still accrue during that time, but once you complete your service term, the National Service Trust may pay all or a part of your accrued interest on qualifying loans. You could also receive a Segal AmeriCorps Education Award after completing your service term. The maximum awarded amount changes every year, and the amount you receive depends on the length of your service term. AmeriCorps volunteers can earn the value of two full-time education awards, and you can use those awards to repay your qualified student loans.
  • Check out SponsorChange. This website pairs organizations, donors, and volunteers. Organizations advertise their social projects that need volunteers, and donors provide funding for those projects. When you find and complete a volunteer opportunity, you receive a cash donation that is put toward your student loan balance.

Creative Ways to Pay Off Student Loans

There are many inventive—and legal—ways to pay back student loans. In fact, you can find hundreds of online articles and discussions about students paying off college loans in truly ingenious ways. Tap into that creativity and find some inspiration by taking a look at the ideas below:

  • Create a Givling account. You can play an online trivia game to help pay off your student loan. Seriously. Givling uses crowdfunding in order to award top-scoring players with daily and other cash prizes that are contributed toward their student loans. You sign up for a free account and wait in a queue for your turn to play. As of January 2017, Givling has paid out more than $470,000 to borrowers.2
  • Find work overseas. A lot of good-paying jobs are available in low-cost-of-living countries. You can earn good money, experience a new country, and have minimal expenses so that the money you do earn can go toward your student loan. And some jobs—like teaching English or working at a hostel—can include room and board.
  • Ask your friends and family to skip the gifts. Do you normally receive Christmas and birthday presents from your closest friends and family members? Ask them to skip the gifts and give you the cash instead so that you can put it toward your student loan balance. Let them know that they'll be helping you achieve your financial goals.
  • Rent out your room or place of residence on Airbnb. If you travel out of town occasionally or have a spare room, then consider renting it out on a site like Airbnb. It's a great way to earn some extra cash as long as it doesn't violate any tenancy or rental agreements that you've signed.
  • Drive for a rideshare company. Businesses like Uber and Lyft are popular in many cities across America. As long as you have a vehicle, are insurable, and can pass the screening process, becoming a driver can be a great way to earn money in your spare time.
  • Get a cash-back credit card. This suggestion requires a great deal of financial discipline. Some credit card companies offer cash-back bonuses for your purchases. So, whenever you buy groceries, get gas, or make any other purchases, use your credit card. Just be sure to pay your balance right away so that you don't incur any interest charges. Every few months, cash out your credits and put that money toward your loan debt.
  • Sell your stuff. Do you have items that you no longer use but that are worth some money? Are you artistic or crafty? Can you bake or cook goods that the public would be willing to buy? Then consider putting those things up for sale. Sell your non-perishable items on websites like eBay or Etsy. And check out local farmers' markets where you can sell food items.
  • Sell your photos. Do you have beautiful photos that you could sell? There are many online stock photography websites that you can consider. Depending on the site, you can create a free account and upload your photos. You'll receive a payment every time a user downloads one of your photos, but you still keep the copyright over your images.
  • Conduct market research. Apps like Gigwalk and Field Agent make it easy for people to take part in market research while they're on the go in their everyday lives. You can scroll through and find tasks that can take anywhere from a few minutes to a few hours to complete. Businesses may ask that you take pictures of their products and prices displayed on store shelves, or online directory companies may have you write reviews or take photos of restaurants and their menus.
  • Rent your car. If you use public transportation or carpool regularly and have days when your vehicle is not in use, then consider renting your car through companies like Getaround, HyreCar, or Turo. It's a great way to earn some money while your car isn't in use. And those companies offer insurance packages so that you're protected if something does happen to your vehicle.
  • Work for a delivery company. Postmates and DoorDash are on-demand delivery companies that offer the opportunity to make deliveries on your own schedule while earning good money. However, they typically only operate in larger urban centers.
  • Move to Kansas. There are 77 counties in Kansas that offer incentives to non-Kansans who are willing to move there. As long as you meet the eligibility criteria, you could receive up to $15,000 to put toward your student loan.3 Niagara Falls, New York has a similar incentive program to encourage population and economic growth.
  • Complete odd jobs in your spare time. Check out websites like Craigslist, Fiverr, and TaskRabbit to find a variety of odd jobs. You could be hired for almost anything, from mowing a lawn to writing a blog. You can also advertise tutoring or house-, pet-, or babysitting services. Other possibilities include becoming a mystery shopper or participating in focus groups or online surveys.

Jobs That Pay Off Student Loans

One of the best ways to pay student loans is to find an employer that offers loan repayment incentives. It's a concept that's only emerged relatively recently. But it's an enticing one. Offering student loan repayment assistance is a great way for employers to attract and retain high-quality workers. And it's an excellent way for you to pay off your loans quickly.

You'll likely need to agree to work for an organization for a specified period of time. And some employers may give you the option of receiving student loan contributions in lieu of raises or bonuses. Others may offer loan contributions in addition to raises and bonuses. So every employer is a little different. If your current employer doesn't have an incentive program like this, then you can always sit down and talk to them about it. They may agree to set one up for you. A few examples of companies that have been known to offer loan assistance to their eligible employees include:

  • Aetna
  • Chegg
  • ChowNow
  • CommonBond
  • Credit Suisse
  • Fidelity Investments
  • Gradifi
  • Kronos
  • LendEDU
  • Martin Health Services
  • Natixis Global Asset Management
  • NVIDIA
  • Powertex
  • PricewaterhouseCoopers (PwC)
  • SoFi

Student loan forgiveness and cancellation programs also exist for nurses, doctors, teachers, lawyers, and veterinarians. For medical positions, you'll likely be required to work in an area that is underserved. Or you may be able to work for a non-profit medical facility. Teachers typically need to work at schools that serve low-income populations or teach subjects that are in high demand. And lawyers usually need to take on government or non-profit positions.

Additional loan forgiveness programs to consider include:

  • The IHS Loan Repayment Program (LRP)—Indian Health Services (IHS) offers student loan payments to qualified healthcare professionals who agree to work in medical facilities that serve Alaskan Native and American Indian communities. Initially, you'll have to sign on for a two-year commitment.
  • Public Service Loan Forgiveness—Federal, state, and local government employees, as well as some non-profit employees, can be eligible for student loan forgiveness. Your eligibility depends on several factors, including what type of loan(s) you have, how many payments you've made, and what type of position you hold. Once you qualify, you'll have to sign an agreement to work within the agency for a set amount of time. Three years is quite common.
  • SEMA (Specialty Equipment Market Association) Loan Forgiveness—Automotive workers who work for SEMA-member companies and meet the eligibility criteria can apply for loan forgiveness. You could receive payments that range from $2,000 to $5,000.

Finding Help to Pay Off Student Loans

Some people end up in financial situations in which they need help paying off student loans. After all, even under dire circumstances, only a handful of people can qualify to have their U.S. student loan obligations discharged through bankruptcy. And that's an absolute last resort anyway because bankruptcy comes with financial repercussions that follow you for a minimum of seven years.

So, what other options do you have if you're seriously struggling to pay off your loan? Consider some of the following ideas:

  • Change your monthly due date. Are you struggling to make your payments because all of your bills are coming out at the same time? If that's the case, then you can contact your lender and ask them to change your due date. Doing that can help make your monthly cash flow more manageable.
  • Extend your loan term. You may have gone with a shorter loan term in order to try and pay off your student loan faster. But if you're struggling to make your payments, you may want to ask your lender if you can extend your term. For example, changing a $20,000 loan at seven percent interest from a 10-year term to a 15-year term would lower your monthly payment by approximately $50 a month. You'll pay more interest in the long run, but it can make your current financial situation easier to manage.
  • Consolidate your loans. If you have several loans from multiple lenders, then it may be favorable for you to consolidate them all into one loan. Depending on your current loans, consolidating may lower your overall interest rate, and it could also extend your repayment period so that your monthly payments aren't so high. Just be sure to read all of the fine print for your consolidation loans, and compare the loan's interest charges to what you're paying currently.
  • Request an income-based payment plan. Lenders can look at your current student loan debt and compare it to your gross income in order to determine an appropriate payment amount. You need to reapply annually to account for any changes in your income. And the plan can extend your repayment period, which means that you'll pay more interest over the life of the loan.
  • Ask for a loan deferment or forbearance. When a lender gives you a deferment, you don't need to make any payments for an agreed-upon period of time. And, depending on your loan type, the federal government may pay your interest during that deferment period. If not, then the interest will accrue during the deferment period and you'll be responsible for paying it later. If you don't qualify for a deferment, then you can apply for forbearance. This option can allow you to stop or reduce your payments for as long as 12 months. However, interest will continue to accrue during that period, and it'll be added to your existing loan balance.

Reasons Why You May Not Want to Pay Back Your Student Loan Early

It may sound counterintuitive but, depending on your personal situation, some financial advisors might tell you to only pay the minimum amount required on your loan. Here are some scenarios when that might make sense:

  • You have other high-interest debt. A good example is credit card debt. If you have large amounts owing on your credit cards and the interest rates are higher than your student loans' rates, then it probably makes more financial sense to focus on paying off the higher-interest debt first.
  • You don't have any savings or emergency funds. If you don't have any money saved in order to cover an unexpected expense—like a medical emergency that requires you to take time off from work—then you may want to focus on making contributions to a savings account first.
  • You can make good returns on investments. If you're paying four percent interest on a loan, but can invest with a six percent return, then it may make more financial sense to invest that money instead. (That's assuming you're willing to take on the risk associated with the investments.) Once you've built up your investment account, you can withdraw money to make a lump-sum payment on your student loan.

One Last Option...

Go back to school. Sounds crazy, right? But a lot of people make that choice, and it often works out well for them. Why? Consider this scenario: You may graduate and realize that only a limited number of jobs are available in your chosen career field. Or maybe most of the available jobs are lower-paying than you expected. So you may decide to take a short vocational program at a trade school, college, or university that helps prepare you for an in-demand, high-paying career. After all, the reality is that paying off student loans in 10 years or less is easier to achieve if you're working in a thriving vocational field. If that sounds like the best next step for you, then enter your zip code into the school finder below and explore the choices near you!



1 Student Loan Hero, "A Look at the Shocking Student Loan Debt Statistics for 2017," website last visited on January 31, 2017.

2 Givling, website last visited on January 31, 2017.

3 Kansas Department of Commerce, Rural Opportunity Zones, website last visited on January 31, 2017.