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8 Ways to Pay Off Student Loan Fast

How to Pay Off Student Loans Fast
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updated: July 9, 2024
edited by Julia Kagan

Student loan debt balances are over $1.6 trillion in the U.S. right now—with average balances of over $35,000 per borrower. These staggering numbers aren’t getting better; if you’re saddled with student loans that you want to get rid of, there are a few ways to cut years off your loan payoff date.

A majority of student loans are backed by the federal government and offer incentives, such as loan forgiveness and subsidized interest payments. But a majority of borrowers simply need to pay them off so they can focus on growing their wealth. We know student loans can feel like a heavy burden; here are eight ways to pay them off much faster.

8 tips for paying off student loans fast

1. Set up autopay

When you start repaying your student loans, make sure to set up autopay with your loan servicer. Most lenders offer an autopay discount—with federal student loans offering a 0.25% rate reduction when you’ve successfully established automatic payment. This will ultimately charge you less interest and help you pay off your loans faster.

To set up autopay, you’ll need to log into your loan servicer website (or app), connect your payment account, and choose a recurring payment schedule. This will auto-draft your payment every month without your needing to submit a new payment every time.

Some private lenders also offer a relationship discount—such as SoFi, which offers a 0.125% rate reduction for existing members—along with the 0.25% autopay discount.

2. Make payments while in school

If you can afford to make regular student loan payments while you’re still in school, you can start your repayment clock years sooner (and speed up the process of being debt-free).

If a full student loan payment is out of the question—and you have a private student loan or a Federal Direct Unsubsidized Student Loan—an “interest only” repayment plan allows you to make smaller payments and pay down just the accumulated interest each month with an affordable monthly payment. Since accumulated interest is added to your loan balance after you graduate, this can save you quite a bit of money in interest over the life of your loan. (Note that if you have a Federal Direct Subsidized Student Loan, the government will pay the loan interest until you graduate and your post-graduation grace period ends.)

3. Avoid income-driven repayment (IDR)

Income-driven repayment plans are available to federal student loan borrowers who want to lower their monthly payments. But these plans typically extend your loan payoff terms, with some plans lasting over 20 years. Income-driven plans are a great option for those who cannot afford a standard payoff plan; in some circumstances, these plans offer forgiveness on some types of loans if there are remaining balances after 20 or 25 years.

But, if you want to pay off your loans quickly, you’ll want to stay on a standard payment plan. Standard student loan repayment plans follow a 10-year payoff schedule. If you can make extra payments, your loans will be paid off even faster.

4. Work during school

If you’re serious about crushing your student loan debt quickly, finding a job during school (and during the summer months) can be a great way to speed up your debt payoff plan. Whether you choose to pick up a part-time job near your school—or join a federal work study program on campus—every extra dollar you earn that can go toward your loans helps pay them off sooner.

During your summer break, working full-time may allow you to save up a few thousand dollars to make a noticeable dent in your loan balances. This is especially helpful if you have accumulated interest during the school year.

5. Find a job with educational assistance

Did you know that some employers will help pay off your student loans? If you work for a company that offers student loan repayment assistance, you can enroll in the program. Your employer is permitted to contribute up to $5,250 per person, per year, in tax-free-to-you payments toward your loans. These programs are designed to incentivize employers to contribute toward your loan repayment (while also saving on the company’s taxes). In 2023, 8% of employers offered company-provided student loan repayment, according to the 2023 SHRM Employee Benefits Survey.

Some employers (48% in the 2023 SHRM survey) will also pay for college tuition—depending on your chosen program and school. Companies including Walmart and Starbucks are famous for offering to pay for the completion of a four-year degree—assuming you meet the qualifying criteria.

6. Pursue student loan forgiveness

If you want to eliminate your student loans by paying the least amount possible you may be able to pursue a student loan forgiveness program. The most popular program is the Public Student Loan Forgiveness (PSLF), offered to employees in certain government or public organizations.

If you enroll in PSLF, your loan payments will be much lower (based on your income), but any remaining loan balances will be forgiven after 10 years of on-time payments in a qualifying job. This can speed up your loan payoff—especially if you were already on an income-driven repayment plan with a much longer payoff schedule.

7. Use ‘side hustle’ money

Sometimes you simply need more income to knock out your student loan debt—and it’s never been easier to drum up extra income on the side. Whether you join the gig economy by driving for Uber, DoorDash, or another delivery platform—or start an online business to sell your products or services—you can quickly start earning money on the side.

The key to paying off your loans quicker is to use your side hustle money only for extra principal payments on your student loans. An extra few hundred dollars per month on a large student loan could speed up your debt payoff date by several years (as long as you’re consistent).

Creating a student loan repayment plan

The key to paying off your loans early is putting together a debt payoff plan you can stick to. If you’re too aggressive with your plan, you might fail and give up too soon—and if you aren’t focused enough, your loans can stick around for far too long. Here are the keys to a reliable student loan payoff plan.

  • Get on a budget. Before you can allocate any extra funds to pay off your loans faster, you need to know how much to spend each month. Reviewing your spending habits and putting together a budget can help you stay on track with your money and put any extra dollars you come across toward your loan balances.
  • Find extra money. In addition to sticking to a budget plan, you can find extra funds by negotiating your bills (cable, internet, phone), getting on a meal plan to lower grocery expenses, cutting out unused subscriptions, and finding other ways to save. You can also generate extra income by selling unused items or picking up a side gig. Use those “found funds” to make extra loan payments.
  • Stay consistent. The key to any debt payoff plan is consistency. Treat any extra payments on your student loans like a monthly bill: Don’t waver on paying down your loans. Life can get messy, but if you commit to paying off your loans fast and stay consistent with extra monthly payments, the loans will be gone much sooner.

Repayment plans for federal student loans

If you have federal student loans, look into the various plans designed to consolidate your student loans and pay them off. Here are the most popular repayment-plan choices and how each of them works.

Standard repayment

Standard student loan repayment plans are typically 10 years in length, with equal monthly payments over the life of the loan. Usually, these plans divide your monthly payments over 10 years so that any balances are completely paid off after 120 successful monthly payments. Some standard repayment plans can extend up to 30 years in length, including Direct Consolidation Loans. This is the type of repayment plan that you will be automatically enrolled in when you leave school unless you choose a different one.

Graduated repayment

A graduated repayment plan starts your loan repayment with smaller monthly payments and then increases your payment over time. Graduated repayment plans offer 10-year terms on most federal loans, or 10- to 30-year terms on Direct Consolidation Loans. Payments increase every two years until the loans are paid off.

Extended repayment

Extended repayment plans are designed to lower monthly payments for borrowers with large Federal student loan balances. If you elect an extended repayment plan, the loan will be changed to a 25-year payoff term length, with a fixed or graduated monthly payment. You must have at least $30,000 in federal student loans to qualify for an extended repayment plan.

Caution: Extended repayment plans don’t qualify for loan forgiveness; if you plan on pursuing any type of forgiveness, do not elect an extended repayment plan. Plus, income-driven repayment plans may offer lower payments and loan forgiveness after 20 or 25 years anyway—so choosing an IDR plan is a better idea in most cases.

Income-driven repayment

Income-driven repayment (IDR) plans allow you to adjust your monthly payment based on your income and family size. There are several plans to choose from, including the newly-formed Saving on a Valuable Education (SAVE) Plan. To qualify for an IDR plan, you must have Direct loans or Direct PLUS loans, and submit your income and family-size information to your loan servicer on an annual basis. All IDR plans forgive remaining balances after 20 years (for undergraduate loans) or 25 years (for graduate loans), but forgiven loan balances are taxable.

Refinancing opportunities for private student loans

If you want to speed up the student loan payoff process for your private student loans, you may be able to lower your interest rate—and shorten your loan term—by refinancing your loans. Companies including Earnest and College Ave, offer low interest rates to qualified applicants who can show a good income and excellent credit score.

This can decrease the amount paid toward any accrued interest—and apply more of your payment toward the loan principal. Many private lenders allow you to choose loan-term lengths shorter than 10 years, also decreasing your loan-payoff time (if you can afford the higher payments).

Unless you get an extraordinarily low interest rate, be careful to include only private student loans in refinances with a private lender. This will preserve your access to federal perks for any federal loans you have.

Student loan interest deduction

One other benefit to remember at tax time: You can deduct “the lesser of $2,500 or the amount of interest you actually paid during the year” from your taxable income—and you don’t need to itemize your deductions to get this.

There are income restrictions, however: Your deduction will gradually be reduced depending on your modified adjusted gross income (MAGI): For 2024 taxes, the figures for individual returns are between $80,000 and $95,000 ($165,000 and $195,000 for those filing joint returns).

TIME Stamp: You can pay off your loans fast with a solid plan and consistent payments—but extra income helps the most

Paying off your student loans quickly can help you get rid of burdensome payments—and allows you to put more money into wealth-growing opportunities, such as investing or buying real estate. Accomplishing this goal requires making extra payments as often as possible. Getting a side hustle or increasing your income is the best way to achieve this.

But you don’t need to have a huge income to pay off your loans: Several programs can help you stay on track for a 10-year payoff, including a graduated payment plan. Even better: If you have Federal student loans, there are several ways to get your loans forgiven (potentially saving you even more money than paying them off early). Whichever student loan payoff path you choose, the key is creating a realistic payoff plan and sticking to it.

Frequently asked questions (FAQs)

When do you pay back a student loan?

Student loan payments are usually deferred until after you graduate—and there’s typically a six-month grace period after graduation before you have to start repaying your loans. Most student loans will accumulate interest during this deferment, causing your loan balance to grow while you're in school.

Once student loan payments start, most standard loan repayment plans are on a 10-year payoff schedule (meaning your loans will be fully paid off after 10 years). Several loan payment plans can extend that payoff time, reducing your monthly payments but increasing the interest you will ultimately pay on your loan.

What is the fastest way to pay off student debt?

The fastest way to pay off student debt is to throw as much money as possible at your loan payment each month. Paying the minimum on your loans usually leads to a 10-year payoff. But if you make large, additional principal payments each month, you can pay off your loans much more quickly. Combine this strategy with refinancing your loans for the lowest possible interest rate—and you can shave years off your loan payoff date.

What is the smartest way to repay student loans?

The smartest way to pay off student loans is the one that works best for your financial circumstances and goals. Maybe this means trying to double your monthly payment to shorten your loan payoff by several years. But it also might make more sense to pursue Public Student Loan Forgiveness (PSLF) and make the smallest payments possible so that your remaining balance is forgiven. Student loan payoff planning requires looking at your entire financial picture before choosing a repayment plan.

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