Student loan debt has become a significant burden for many individuals, with the average borrower owing around $30,000. This debt can hold you back from other financial goals like buying a home, saving for retirement, or starting a family. However, there are several strategies for repaying your student loans faster and saving money in the process. In this article, we will explore various insights and strategies for student loan debt management to help borrowers regain control of their finances.

1. Make Extra Payments Toward the Principal

Effectiveness: High

One of the most effective strategies for student loan debt repayment is to make extra payments toward the principal balance. By paying more than the minimum required each month, you can significantly reduce the overall interest accrued and shorten the repayment term. To do this, consider allocating any extra income or windfalls towards your student loan debt, such as tax refunds, bonuses, or financial gifts from relatives. Remember to communicate with your loan servicer and ensure that the extra payments are applied to the principal balance and not toward future payments.

a. Biweekly Payments

Instead of making monthly payments, consider splitting your payment in half and making biweekly payments. This approach allows you to make one extra payment each year, which can help you pay off your student loan debt sooner and save money on interest. To implement this strategy, contact your loan servicer and inquire about setting up biweekly payments.

b. Target High-Interest Loans First

If you have multiple student loans with varying interest rates, prioritize paying off the loans with the highest interest rates first. By doing so, you can save more money on interest payments and pay down your overall debt faster. Once the high-interest loan is paid off, redirect the extra payments towards the next highest-interest-rate loan, and continue this process until all your loans are repaid.

2. Enroll in Income-Driven Repayment Plans

Effectiveness: Depends

Enrolling in an income-driven repayment (IDR) plan can provide relief for borrowers struggling to make their monthly payments. IDR plans to adjust your monthly payment based on your income and family size, ultimately capping payments at a certain percentage of your discretionary income. While enrolling in an IDR plan can lower your monthly payments, it may also extend the repayment period to 20 or 25 years, which can result in more interest paid over time. However, after the repayment period, any remaining debt may be forgiven. It is crucial to weigh the pros and cons of enrolling in an IDR plan based on your financial situation.

3. Explore Student Loan Forgiveness Programs

Effectiveness: Medium to High

Various student loan forgiveness programs exist to help borrowers eliminate their debt under specific circumstances. Here are a few federal programs for which you may qualify:

  • Public Service Loan Forgiveness (PSLF): This program forgives the remaining balance of federal student loan debt after 10 years of qualifying monthly payments while working for an eligible public service employer. To apply, submit the PSLF application form and provide proof of qualifying employment.
  • Teacher Loan Forgiveness: Teachers who work full-time for five consecutive academic years at a low-income school may be eligible for the discharge of some or all of their federal Direct and Stafford loans, up to $17,500 in total.
  • Total and Permanent Disability Discharge: Borrowers who are permanently disabled may qualify to have their entire student loan debt forgiven. Apply on the Federal Student Aid website by providing documentation from your doctor’s office.
  • Closed School Discharge: If your school closed while you were enrolled or shortly after you left, you may not have to repay your student loan debt. Apply for a closed school discharge through the Department of Education.
  • Borrower Defense to Repayment: If your school engaged in misconduct while you were enrolled, you may be eligible to have some or all of your student loan debt forgiven. Apply for borrower defense on the Federal Student Aid website.

Keep in mind that these forgiveness programs often have strict eligibility criteria and require extensive documentation.

Also Read: International Student Loans Without Cosigner

4. Consolidate Multiple Student Loans

Effectiveness: Medium

Consolidating multiple student loans into one loan with a single monthly payment can simplify the repayment process and potentially lower your interest rate. For federal loans, consider a Direct Consolidation Loan, which combines multiple federal student loans into one loan with a fixed interest rate based on the weighted average of the original loans’ interest rates. Private student loan borrowers can also consolidate their loans through refinancing with a private lender. However, refinancing federal student loans with a private lender will result in the loss of federal benefits, including income-driven repayment plans and loan forgiveness programs.

5. Refinance Your Student Loans

Effectiveness: High

Refinancing your student loans can help you secure a lower interest rate, a shorter repayment term, or both, ultimately saving you money on interest and potentially helping you pay off your debt faster. To qualify for refinancing, you typically need a credit score in at least the high 600s, a stable income, and a debt-to-income ratio below 50%. Keep in mind that refinancing federal student loans with a private lender will result in the loss of federal benefits, including income-driven repayment plans and loan forgiveness programs.

6. Set Up Automatic Payments

Effectiveness: Low

Signing up for automatic payments can help lower your student loan’s interest rate, as many loan servicers offer a 0.25% interest rate discount for borrowers who enroll in autopay. Although the savings from this discount may be minimal, combining it with other strategies can help you pay off your student loans faster. Contact your loan servicer to enroll in autopay and inquire about any available interest rate discounts.

7. Leverage Your Employment Benefits

Effectiveness: Medium to High

Some employers offer student loan repayment assistance or tuition reimbursement as part of their benefits package. Check with your company’s human resources department to see if they offer such a program and ask how to enroll. Additionally, certain professions, such as public service or teaching, may qualify for student loan forgiveness programs.

8. Utilize Tax Deductions and Credits

Effectiveness: Medium

Take advantage of tax deductions, such as the student loan interest deduction, which allows you to reduce your taxable income by up to $2,500 for interest paid on student loans during the tax year. To claim this deduction, you must meet certain eligibility criteria, such as having paid interest on a qualified student loan and having a modified adjusted gross income (MAGI) below specific thresholds. Additionally, if you’re still in school or pursuing further education, you may qualify for education tax credits, which directly reduce the amount of tax you owe.

9. Create and Stick to a Budget

Effectiveness: Medium to High

Developing and maintaining a budget can help you identify areas where you can cut back on spending and allocate those funds toward your student loan debt. By consistently meeting a monthly savings goal through budgeting, you can use the extra money to pay down your principal balance more quickly and save on interest. Utilize budgeting apps and tools to track your spending and identify potential savings opportunities.

10. Aim for Loan Forgiveness Through Income-Driven Repayment

Effectiveness: Medium

Enrolling in an income-driven repayment plan can result in loan forgiveness after a specified repayment period, typically 20 or 25 years. Although this strategy may not pay off your student loans quickly, it can help relieve the burden of debt for those struggling to make payments. Keep in mind that the forgiven amount may be considered taxable income, so plan accordingly.

11. Seek Out Additional Sources of Income

Effectiveness: Depends

Consider taking on a part-time job, freelancing, or starting a side hustle to increase your income and put the extra earnings toward your student loan debt. By generating additional income, you can accelerate your student loan repayment and save on interest in the long run.

Also Read: Private Student Loans for Bad Credit


Managing student loan debt can be a daunting task, but with the right strategies and perseverance, it is possible to regain control of your finances and pay off your loans faster. By implementing these strategies, such as making extra payments, refinancing, and leveraging employment benefits, you can save on interest and reduce the overall burden of your student loan debt. As you work towards paying off your loans, remember to stay consistent and maintain a budget to ensure that you are making progress toward your financial goals.