Paying back your student loans can be intimidating. I know — when I was graduating from college and trying to find work and a place to live in an entirely new city, the thought of also having loans to pay back made me terrified.

But I’m here to tell you — don’t freak out. You can pay back your student loans. It might take time, yes, and probably determination. You will definitely need a plan. But making that plan is just one of the things this article will help you do — and it will also give you the tools to move from having thousands of dollars of student debt to being debt-free. You might even be able to do it faster than you expected.

But first, let’s talk about why you should try to pay your student loans off earlier than required.

The biggest benefit? You’ll save money. Let’s say you have a $30,000 loan with a 4.5% interest rate that you pay off over 20 years — you’ll pay $15,550 in interest. But if you pay it off in only 10 years, you’ll save $8,240. If you pay it off in five years, you’ll save $11,993. That’s enough money to buy a new car. Or, depending on where you live, a full year or two of rent.

Getting rid of your student loan debt also gives you a lot of freedom — the freedom to take a lower-paying job that you care about more, the freedom to travel, even the freedom to take on other “good” debts — like a mortgage for your first house.

It’s also important to note that defaulting on your student loan can have very serious consequences; in fact, not repaying student loan debt can be worse than not repaying other types of debt. Defaulting on your loans can ruin your credit score, making it difficult to do everything from signing up for basic utilities to renting an apartment. Your debt could increase thanks to accruing interest. And if you have federal loans, the government can add fees or even garnish your wages, forcing your employer to withhold money from your paycheck and send it directly to the government.



There are times when it is smarter to pay off other loans before student loans — if you have other debt with a higher interest rate, pay that down first, and it’s a very good idea to build an emergency fund of at least $1,000 as you start paying down student loan debt. But other than that, it can be really helpful to pay off your student loans as soon as possible. It’s not always easy, but it is doable. Follow the suggestions below to help speed up your student loan repayment.

1. Have a Positive Mental Attitude

Achieving any goal requires determination and a feeling that you can do this — and, really, you can. Psyching yourself up about it sounds silly, but it can really help. Remind yourself what you’re paying for — a college education. That’s huge! It helps open career doors, and it helps you grow as a person. And don’t forget — college graduates have greater job opportunities and still earn more money on average.

Many people who have paid off their loans also mention the great psychological benefit of feeling like a huge weight has been lifted off their shoulders. I know that personally, if I fantasize about getting a windfall of cash, the first thing I think about doing is paying off my student loans. (I know; boring fantasy. But right after paying off the loans, I’d travel!)

2. Understand Your Loans, and Make a Plan

In order to create an accurate repayment schedule, you need to understand your loans.

Use a Repayment Calculator

Plug the information about your loan into a repayment calculator like the one from FinAid.org, or use your loan servicer’s online account tools. Learn how much you need to pay per month in order to pay off your loan within a specific amount of time.

Pay Attention During Exit Counseling

If you borrowed a federal student loan, you are required to receive exit counseling, which teaches you important information about your rights and how to repay your loan. Depending on your school, you might do this online or in-person. Either way, make sure to pay close attention. You can see a “tour” version of federal student loan exit counseling that is full of helpful information.

Pay Attention to Details and Paperwork

Make sure you read everything you receive about your loans and understand your loan terms. For example, are your interest rates fixed (meaning that they will stay the same for the duration of the loan) or variable (meaning that they can change, possibly making it harder for you to budget your monthly payments)? Understanding the terms of your loans will help you avoid potential complications.

See If You Qualify for Income-Based Repayment

If you have a federal loan (other than a Perkins or Parent PLUS loan), and you are on limited income, the Income-Based Repayment (IBR) plan allows you to pay based on what you earn, not on what your loan payments are supposed to be. According to the Federal Student Aid office, “Under IBR, your monthly payment amount will be 15 percent of your discretionary income, will never be more than the amount you would be required to pay under the Standard Repayment Plan, and may be less than under other repayment plans.” And, if “you repay under IBR for 25 years and meet certain other requirements, any remaining balance will be canceled.”

This program is only for people who hold federal — not private — loans. Even if your loan is serviced by a private company, it might still be a federal loan. If you’re not sure, login to the National Student Loan Data System to see if you currently have a federal loan.

IBR does have some downsides — like possibly paying more interest since you’re stretching out your loan term. To learn more about whether the program is for you and how to apply, visit the Federal Student Aid office’s Income-Based Plan page.

Make a Budget

A budget isn’t just an important part of loan repayment — it’s an important part of overall financial independence. Your budget helps you allocate the funds for paying back your student loans (and, well, everything else you need to pay for in life). Check out our guide to creating your first budget.

Create an Emergency Fund

While creating an emergency fund should be part of your budget, it’s important enough that it deserves its own mention. This is a special section of your savings set aside for, well, emergencies. The idea is that if something terrible and unexpected happens – your car breaks down, you need to go to the doctor, etc. – you’ll have the funds set aside to pay for it without needing to pull from other areas of your budget. Shoot for having $1,000 in your emergency fund; that amount will cover most things that could happen.

3. Make Payments While Still in School

Paying your loans down before you graduate will certainly help you pay them off faster. For most loans (except for need-based federal subsidized loans), the interest meter is running the whole time you’re in school. When your required payments begin, the unpaid interest is “capitalized” – that is, added to your loan balance; interest then is calculated on the new larger, balance. Any payments you can make while in school help lessen interest capitalization and can save you money. Check with your loan servicer to be sure, but in most cases there are no prepayment penalties.

4. Consolidate Your Loans

Loan consolidation is not the right choice for everyone. But for some people, it can help. Consolidating your loans — grouping multiple smaller loans into one big one – could make paying your loans more convenient, because you only have one servicer.

Consolidation makes it harder to use the “debt snowball” technique with your loans — a method of debt repayment that has you pay off your smallest debt first, then “snowballing” the money you were putting towards that debt to the next biggest debt, and so on. This method works for all types of debt, not just student loan debt — check out our guide to the debt snowball method.

Consolidation can also extend your payback period. While this might help by giving you lower payments in the short-term, also note that you’ll be paying more interest in the long-term. You might also run into another problem if you’re interested in consolidating your private loans – since the credit crunch, fewer companies are offering private loan consolidation.

Finally, be wary of consolidating federal and private loans together. There are certain benefits that come with your federal loans — such as being eligible for income-based repayment (see above) — that you may lose if you consolidate private and federal loans.

5. Consider Enrolling in Auto-Debit

When you enroll in auto-debit, your student loan servicer automatically deducts your payment from your bank account each month. There are several benefits to this payment method, and some lenders may give you a discount just for enrolling.

You’ll Never Miss a Payment

If you have auto-debit, your loan servicer will automatically deduct the amount from your bank account. You do need to make sure, of course, that you have enough money in your account each month for the payment to clear — otherwise, you could be looking at overdraft fees.

While not exactly the same, this is also in the spirit of “paying yourself first” — a savings or debt-reduction technique where money is set aside before you ever receive it. For example, if you designate 10% of your paycheck to be direct deposited into your savings account instead of your checking, that’s paying yourself first.

You Might Get a Discount

Some lenders offer a discount for enrolling in automatic debit. According to FinAid.org, “The most common loan discounts include a 0.25% interest rate reduction for having your monthly loan payments direct debited from your bank account.” It might not seem like much, but that can really add up over time.

You Can Still Make One-Time Payments

If you have unexpected extra cash, you can still make a one-time payment to pay down your loan faster.

6. Get Help From Your Employer

Some employers offer assistance with your student loans as part of a benefits package.

Established Programs

There are several programs already in place that help you pay back student loans. Some are through employers, while others are more public-service oriented:

Government employees may receive up to $10,000 a year in assistance paying back federal student loans through the U.S. Office of Personnel Management’s Student Loan Repayment Program.



The Nursing Education Loan Repayment Program, which “helps alleviate the critical shortage of nurses by offering loan repayment assistance,” offers loan assistance for nurses. If you go this route, you will be required to work at either a “health care facility with a critical shortage of nurses or at an eligible school of nursing in the case of nurse faculty.”



Branches of the U.S. Military offer their own loan repayment programs for qualifying education loans. Check out options from the Army, Navy, Air Force, and National Guard.



Teachers may have multiple loan-forgiveness options. Teach for America, part of AmeriCorps, offers an AmeriCorps education award and “loan forbearance and paid interest for two years.” There is also a separate Teacher Loan Forgiveness Program that provides “forgiveness up to a combined total of $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.” That program requires a teaching commitment of at least five years.



People who work full-time in public service can have their eligible remaining federal student loans discharged after 10 years thanks to the Public Service Loan Forgiveness program.



Some private employers have their own already existing programs. Ask your HR representative.

It’s important to study the criteria for any program you’re considering. Also in some cases you may be required to report forgiven loans as taxable income, so be sure to factor in any potential tax consequences in your decision.

Ask Your Employer

Some employers might be willing to include student loan repayment as part of your benefits package even if they don’t have an official program. Similar to signing bonuses and health benefits, student loan repayment is another way for employers to attract top talent. Bring up the idea to your boss and remember — this has to be a good deal for the company as well. In exchange for the student loan payment, you might offer incentives such as a promise to stay at the job for a specific period of time or agree to relocate to a branch office.

Get Help Avoiding Future Debt

While it doesn’t help you pay your current loans, if you’re planning to go to grad school, you might be able to get your employer to pay for it. The most likely employers to offer this benefit? Colleges. But several other employers have pay-for-school programs as well. Even if your employer doesn’t have one of these programs, you might still be able to convince your them to pay for it. Check out this guide from U.S. News and World Report on how to persuade your boss.

7. Volunteer

Donating your time can help you pay off your loans while doing good. The two most well-known programs, AmeriCorps and Peace Corps, both offer some manner of education award or partial loan cancellation in addition to paying your living expenses during your time of service.

Peace Corps members volunteer internationally and receive two student-loan related benefits. Volunteers can have up to 70% of a Perkins Loan canceled, depending on how many years they serve. And all Peace Corps volunteers receive an award of $7,425 after 27 months of service. This money can be used toward paying back student loans.

Domestic AmeriCorps volunteers, meanwhile, are eligible to receive a Segal AmeriCorps Education Award at the end of their service that can be used towards paying loans. The amount varies, but according to the AmeriCorps website, in 2011, it was $5,550. And, if you decide to pursue the Public Service Loan Forgiveness program mentioned above, your time in the AmeriCorps counts towards your 10 years of public service.

8. Pay More Than Required Each Month

It’s kind of obvious, but this is the best way to pay down a loan fast — and there a lot of ways to do it.

First, let’s get specific on how you want to pay more each month. When you make a loan payment, you pay off any interest that has accrued since your last payment, and the rest goes to lower your principal balance. If you pay more than required, you’re usually given the option of having that extra money lower your next payment or continuing on the same payment schedule as planned and having the extra money lower your loan principal. Even if you paid enough to count for next month’s payment, don’t take a pass! Be sure to tell your servicer that you plan to pay your loan as usual next month – that’s how you pay off the loan faster.

There are two very basic ways to be able to pay more each month on your student loans: earn more or spend less.

Earn More

I know — it can be really disheartening when you’re having trouble finding any job to hear someone say “Go ahead, just earn more!” But there are several avenues you can pursue:

Look for side work and one-time gigs on Craigslist.



Start a side business, such as freelance social media management, yardwork, or knitting and selling scarves. Making and selling handmade goods can be especially useful around the holidays.



If you have a full-time job (or job that already covers all of your expenses), pick up a part-time job, and put all of that money towards paying down your loans.



See if there are market research panels in your area. I once earned $100 for a panel that discussed credit cards for only two hours.



Have a yard sale and/or bake sale.

Spend Less

This is, of course, the other side of the “have more money” equation:

Live with someone else — whether it’s a roommate or your parents, sharing housing with someone can drastically lower your cost of living.



If you live in an urban area and have a car, figure out if you can get by without it. Many cities also have car-sharing companies like Zipcar, which allow you to rent a car for cheap on a short-term basis.



Spend less on entertainment. There are lots of fun ways to do this — hosting a movie night or potluck with your friends instead of going out, going to bars during happy hour instead of late at night, and borrowing books and movies from the library instead of buying them are just a few options. For more ideas, check out our articles on 47 Cheap, Fun Things to Do This Weekend, How to Watch Movies in the Theater for Free, and 50+ Ways to Have Free Outdoor Fun.



Take a hard look at your budget. Are there discretionary expenses you can lower or eliminate? It might not be fun, but it can be worth it. Or if you really want to go all in, you can consider doing a spending fast.

9. Switch to Biweekly Instead of Monthly Payments

Investopedia does a great job at breaking down why paying biweekly instead of monthly is a good idea:

First, you are paying less in interest because there is less time between payments for interest to accumulate. Second, you will end up making an extra month's worth of payments every year. This is because paying every other week equals 26 annual payments. It's a relatively painless way to reduce the cost of borrowing and pay off your loans faster. If you get paid biweekly, the payment feels the same on your wallet because you are taking half of a payment from each paycheck.... You may not be able to afford an extra payment a year, but you can afford to send in an extra $5 a month or $25 every other month.

10. Take Advantage of Tax Deductions

If you earn under $60,000 a year (or $120,000 if you’re married and filing jointly), you can deduct up to $2,500 of student loan interest you’ve paid in the last year from your taxes. According to TurboTax, “If you paid more than $600 in interest to a single lender during the last year you should receive a 1098-E form showing how much interest you paid for the year.” You can still take the deduction without this form, but you may need to present other records. However, do not extend the term of your loans unnecessarily in order to continue receiving the benefit; it’s just not worth it.

One other tax note — if you get a refund, consider putting all of it towards your loans.

11. Get Rewarded

There are several websites and programs that allow you to earn rewards for spending money or paying down debt, and these rewards can be put towards your loans. Some of these programs are education specific, allowing you to put any credits you earn directly towards paying down debt. Others reward you for paying down your debt by giving you credits that you can use to try to win prizes such as grocery gift cards, cash, or student loan payments. If you are able to pay your bill off every month, you could also consider getting a cash-back credit card and putting any cash back you receive directly to your loans. Search around online to find a good rewards program for you.

One note about all of these programs — it is not worth it to buy things you wouldn’t already buy in order to get the rewards, and it’s definitely not worth going into credit card debt. Only make purchases you’d already make and can pay for.

12. Enlist Your Cosigner

Your cosigner (likely Mom or Dad) is on the hook for your loan too, which means they have incentives to help you pay the loan back faster. In fact, if you have trouble paying back your loan, it could affect your parents’ credit rating and their ability to do things like finance a house or a car. They were there to help you attend school in the first place, and they probably have a continued desire to help you succeed.

Talk to your cosigner about your loan status, especially if you’re having trouble paying the loans back. Your cosigner might be willing to match your funds or supplement your payments. Or perhaps they would prefer to pay back your loans now and have you owe the money directly to them. No matter what, be sure to keep lines of communication open with your cosigner, so you can figure out a plan together.

13. Ask for Loan Repayment Money for Gifts

Tell your friends and family that instead of wanting traditional birthday, holiday, and graduation gifts, you’d rather receive funds that go to paying down your student loans. Consider writing a letter to everyone to this effect, explaining the value of your education and how important this is to you.

14. Last Resort: Deferment or Forbearance

If you absolutely cannot pay your loans, there are a couple of options available to you: deferment and forbearance. Avoid them both if you can; neither is an ideal option.

In deferment, you can take a break from paying the principal on your federal loans if you’re unable to find work or if you meet the criteria for economic hardship, for example. If your loan was “subsidized” – that is, based on financial need — interest won’t build up during deferment. For unsubsidized loans, you continue to be responsible for interest. Deferment can also be available to those in military service and to people in a few other situations.

If you don’t meet the criteria for deferment on federal loans or if you have private education loans, forbearance allows you to stop or reduce payments for a specific period of time — but interest continues to accrue. Forbearance is intended for borrowers who have a temporary need to postpone payments and expect to be able to return to payments within a few months.

Both options are better than defaulting, but neither are good — by continuing to put off paying, you’re only making your total loan balance larger.

15. Work With a Reward in Mind

Achieving goals is a lot easier — and more fun! — if you work with a reward in mind. While being debt free is certainly a reward of its own, planning to travel or even just treat yourself to a nice meal can be a great way to help you pay down your loans faster.