Strategies That Will Help Pay Down Student Loan Debt Faster

Across generations, former students feel the impact of high student loan debt. Millennials are delaying important life events such as buying a home, marriage and starting a family. Seniors are working longer and delaying retirement in an effort to eliminate debt before permanently leaving the workforce.

While extending loan payments may temporarily ease the debt burden of student loans, by lowering the monthly payments, many borrowers want instead to accelerate loan payoff to improve their finances. Doing so can lower overall loan costs, and free up cash flow for other financial priorities.

Here are eight effective strategies to eliminate student loan debt faster.

Save Money by Strategically Managing Your Student Loans

1. Decide if a Loan Consolidation is the Best Route

Every year, Congress sets the rate on student loans, which means you will likely have loans at different rates over the four to six-year timeframe it takes to earn a degree. Loan consolidation can give you a single payment at a single rate, simplifying the repayment. However, when you want to pay down debt faster through additional payments, you can choose to pay down the highest rate first, lowering overall interest costs.

When you consolidate a student loan, the result is an average of the rates you received on distributions while in school. You lose the ability to pay off the highest interest loans first.

2. Choose Your Repayment Plan Carefully

Student loan repayment lasts between 10 and 25 years. You can choose the traditional loan repayment, which will result in the lowest interest payments over a ten-year term. A graduated plan will still pay off the loans in 10 years, but begins with a lower payment that rises over time.

Selecting an income-based plan will never result in a payment higher than the 10-year option and can allow you to qualify for loan forgiveness if you qualify. However, selecting this route with the intention of gaining loan forgiveness after a 20 or 25-year repayment term could more than double the interest paid and leave little or no balance left for forgiveness.

Get Help Through Your Job

3. Employer Benefits

One popular employer benefit cropping up in large corporations is a student loan repayment assistance. The benefit works much like educational reimbursements, with annual limits and an overall maximum. After receiving assistance, you must work for the company a set number of additional years to avoid a paying back the employer.

Congress is considering a law that will allow employers to pay student loan payments without counting the payment as income, much like the college tuition reimbursement currently offered in many benefit packages. If the law passes, employees could see the assistance offered more frequently at major corporations.

4. Work for a Company That Qualifies for Loan Forgiveness

The largest loan forgiveness program is the Public Service Loan Forgiveness. Employees working for the state or federal government, military, teachers, and qualified non-profits can receive loan forgiveness after ten years of employment. Starting your career at a qualifying company could speed up loan forgiveness, provided you are willing to work with a qualifying company for a decade. Most other loan forgiveness programs have low forgiveness limits or a much longer repayment requirement.

To qualify, you must enroll in an income-based repayment plan.

5. Move to A City Offering A Student Loan Repayment Incentive

Cities struggling to maintain their tax base are offering recent graduates an incentive to move. You could qualify for free land or student loan repayment benefits after meeting the qualifications, which vary by city. States like Kansas, Nebraska, Michigan, Vermont, and Minnesota have created incentives for new residents in an effort to attract younger workers.

Budgeting Strategies to Reduce Student Loan Debt Faster

6. Make Extra Payments

A common strategy to speed mortgage repayment is to make a payment every two weeks rather than once a month. The result is one extra payment a year, which reduces the loan term, saving you hundreds of dollars in interest payments. You can implement the same strategy with your student loans. A student loan calculator can help you estimate your savings.

Extra payments can also mean adding a small amount extra to each payment and accomplish similar results. When making additional payments, be sure to earmark the funds towards the principal balance. Otherwise, the loan company can put it towards future payments, which does not provide the same benefits.

7. Find a Side Gig

Working a second job or doing side work can improve your cash flow and allow you to put additional money toward student loan debt, thus paying off the balance faster.

8. Tax Help

Tax deductions and credits can lower your tax bill, giving you extra funds to reduce loan balances. During repayment, you can deduct up to $2,500 in interest payments each year, even if you do not itemize deductions. Lowering taxable income can lead to a larger refund.

You can also lower balances by making interest payments while in school, during deferment, or forbearance periods. Doing so will prevent loan interest from accumulating and increasing your loan balance and give you an interest tax deduction over a higher number of years. All unsubsidized loans incur interest charges from the date of disbursement, which can mean interest accrual of six or more years while completing a degree.


Student loans do not need to be a part of your budget for most of your working career. There are many strategies you can use to pay down student loan debt faster. With a little planning you can eliminate your school debt and conquer other financial battles sooner.

Don’t wait – get started today! Your free debt analysis and personalized financial solution is just a phone call away...

For a free financial analysis, call 855-331-4852