7 Ways to Pay Off Your Student Loans Faster

Student loan debt has become a normal part of attending college. For many graduates, it can be shocking to realize just how much they owe when they graduate. Your student loan payment can hold you back from doing the things you love, and it takes a portion of your income that you could use to reach other financial goals. Your student loan payment can also make it harder to take risks when it comes to your career or other options.

For these reasons, it is important to tackle your student loan debt as quickly as possible. It should be one of the top priorities in your financial plan right after college.

01 of 07

Consolidate to a Federal Direct Loan

Young woman doing loan paperwork at table with laptop
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The first thing you should do is to consolidate your federal student loans into a federal Direct Consolidation Loan. Most recent loans should already be through the Direct Loan program, but if you started classes several years ago, you may have loans at different banks. Consolidating your loans may qualify you for student loan forgiveness programs and make it easier to pay one monthly payment. It will also give you the opportunity to lower your monthly payment and extend the term of the loan. This may be crucial if you are not making as much as you originally expected during the first few years of working. 

02 of 07

Create a Payment Plan

You need to create a debt payment plan for your student loan debt, along with any credit card debt and car loans. Prioritize the debts based on the interest that you are paying and tax advantages. This means that you should usually put your federal student loans last, since they typically have a lower interest rate, while you work on paying off your private student loans faster. This plan can help you focus your efforts and make it easier to get out of debt. 

03 of 07

Get on a Budget

Once you land your first job, you need to set up a tight budget that will limit your spending so that you have extra money to put toward your loan payments. With a steady income, it is essential to establish a realistic budget that allows you to move forward on saving and getting out of debt. It's easier to make the sacrifices now, when you are used to being broke, than after you are accustomed to spending a lot every month. Your budget can help you identify areas where you can cut back on your spending and pay down your student loans faster.

04 of 07

Find Extra Money

Look around for things to sell or find extra money in your budget to speed up the process of paying off your student loans. You can put any signing bonus you get with your first job toward your student loans. Yard sales, eBay, and other online sites such as Craigslist are good outlets for selling things you own as well.

05 of 07

Take on a Part-Time Job

If you are overwhelmed by your student loan debt, you may need to take on a second job. Don't just take any random job, though—look for one that will make working worth your time and help you pay off your student loans faster. A job that offers tips is always a good choice, but you may be able to earn more as a freelancer or a tutor. Look at your job skills and explore options that will allow you to make the most of the time you are investing. Then apply the extra money you make toward your student loans.

06 of 07

Apply for Income Based Repayment

You can apply for the income-based repayment program if you are having a hard time making payments. The program will base the amount of your payment on your current discretionary income. You have to reapply each year, and as your income increases so will your monthly payment. If you make on-time payments under this program for either 20 or 25 years depending on the specific program, any remainder of your loan will be forgiven. Note that this only applies to federal student loans.

07 of 07

Take Advantage of Any Loan Forgiveness Programs You Can

There's no faster way to pay off your student loans than to have them canceled. If you work as a teacher, you can qualify to have your student loan debt forgiven after five years. You may qualify for a similar program if you work for the government or for a nonprofit, although the length of time is longer. Teach For America in partnership with AmeriCorps also offers education awards that can help you pay off your student loans. Some hospitals may offer forgiveness programs if you work in underserved areas. See if your current job offers any help with student loans as well.  

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Student Aid. "Student Loan Consolidation."

  2. Federal Student Aid. "Federal Versus Private Loans."

  3. Federal Student Aid. "Income-Driven Repayment Plans."

  4. Federal Student Aid. "Teacher Loan Forgiveness."

  5. Federal Student Aid. "Public Service Loan Forgiveness."

  6. Teach for America. "AmeriCorps."

  7. Texas Department of State Health Services. "Student Loan Repayment Programs."

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