How to Pay Off Student Loans | Paying for College

The challenge of learning how to pay off student loans needn’t keep borrowers from achieving their goals, whether it’s starting a business or earning a PhD. But as alumni who’ve watched interest grow and payments pile up know, the sooner they’re paid out, the better.

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Student loan debt affects the majority of college graduates today — about 65% of Class of 2018 graduates took out loans to pay for college, according to US News data. And the amount that student borrowers owe has increased significantly over the past decade, going from an average total student debt of $21,211 among 2008 graduates to nearly $30,000 among 2018 graduates.

Some ways to pay off student loan debt, like crowdfunding and side hustles, require creative thinking. Others, like budgeting and refinancing or consolidating loans, are more traditional but smart steps to help graduates live debt-free lives.

To educate borrowers struggling with student loans, US News interviewed three graduate students from different majors who successfully paid off debts that amounted to thousands of dollars each after graduation. In some cases, these individuals have even been able to repay their loans in a fraction of the time it should have taken under their repayment plans.

Here are some tips on how to pay off student loans:

  • Know how much you owe and choose a repayment schedule.
  • Consider paying off loans with the highest interest rates first.
  • Keep a detailed spending plan.
  • Live according to your means.
  • Pay the main amount.
  • Rely on a support system.

Know how much you owe and choose a repayment plan

Borrowers with federal student loans may enjoy greater repayment flexibility than borrowers with personal loans. Joe DePaulo, CEO and co-founder of College Ave Student Loans, a private student loan provider, says borrowers who are close to graduation or those who recently graduated must first understand how much they owe and then need to review the repayment plans available to them.

“If you work and end up doing something like community work or working at a nonprofit organization, you may qualify for income-based payment changes,” DePaulo says. “But if you end up with a title where you have a larger income, you probably don’t qualify for those payment changes.”

The standard federal student loan repayment schedule and the most common personal loan schedule, DePaulo says, is a 10-year term. Students can learn more about their federal loan repayment options, including the various income-based plans, by visiting the Federal Student Aid website.

Consider paying off the loans with the highest interest rates first

Joshua C. Gellers, an associate professor of political science at the University of North Florida, finished his year-long master’s program at Columbia University in New York with $43,500 in student debt. He decided to get a Ph.D. Program that required no additional student loans and allowed his existing ones to be deferred due to his status as a student.

After he finished his program, it was time to start paying off his loans. For students in a similar position, he recommends starting at the top.

“I paid off the loans with the highest interest rates first. Those are the ones that bother you the most,” says Gellers. “I had a subsidized and an unsubsidized loan. I paid off the Grad PLUS loan first, at 8.5% interest rate, higher than my mortgage, my car loan – it’s outrageous.”

He repaid his student loans after about four and a half years of active payment, which was about halfway through the specified time of his 10-year repayment plan.

Depending on the interest rate and term of the respective loan, it may make sense in some cases to repay the lowest balance first.

“If the tenors of the loans are the same, you should pay off the higher-interest loans first. If the terms of the loans are different, you may need to make a different decision to manage your budget,” says DePaulo. “Think of your payments first. What can you afford?”

Keep a detailed spending plan

Emma Leigh Geiser, a registered nurse and money coach in California, borrowed $46,000 while attending a University of Oklahoma campus to earn her Bachelor of Science degree in nursing. Her strategy to pay back was to work overtime and take on as much extra work as possible, as well as have a meticulous spending plan.

Budgeting helped her explain what her money was being spent on while allowing for some balance in her life, she says.

“As I was paying off my loans, I created what is called a zero-based budget. I dialed in my expenses and assigned all my income to different categories. That way I didn’t have any money floating around that wasn’t labeled as a job. ‘ Geiser wrote in an email. “I didn’t use fancy programs, my spending plan was written in a notebook, and I tracked my expenses on the opposite page… Just because I was diligently tracking money doesn’t mean I wasn’t having fun, I made sure of monies too.” provide for luxury.”

She paid off her loans 16 months after graduation.

Live according to your means

Sometimes paying off student loans means making sacrifices. Heather Taylor, communications coordinator at and freelance writer for Advertising Week, graduated from California Lutheran University in 2010 with a bachelor’s degree in communications and $56,000 in student loan debt. She made minimal payments for about eight years until she saved enough to pay off the debt in full.

To get there, she lived on a tight budget and even postponed some life milestones while saving to pay off her student loans.

“If you want to get out of debt quickly and don’t have a high-paying job or outside financial help, you need to change your lifestyle. Assess your current expenses and see where there are opportunities to reduce your overhead,” she wrote in an email.

Some ideas she suggests to other borrowers are “live with a roommate to save on rent, or go carless and use public transit and ridesharing.”

In the end, she says repayment was difficult, but she tells borrowers, “Remember, this part of your life won’t last forever. This short-term sacrifice ultimately contributes to your future.”

It took her nine years to pay off her student loan.

Pay the client

Gellers also advises borrowers to set aside more money than is required for their monthly student loan payments. He began tackling not only the accrued interest but significant amounts of the principal amount borrowed.

“Whenever I had a large amount of money, not that it was unexpected, but in addition to my regular income, I would count that towards the principal amount. My bill was due on the 21st; on the 22nd, if there is no interest on credit for the coming month, I would spend a large sum on it.”

That strategic payment, combined with his plan to pay off the student loans with the highest interest rates first, helped him “lessen the strain over time,” he says, and drastically reduced his required monthly payments as he began paying the principal to reduce .

Rely on a support system

Families can be of great help in earning a college degree and even paying off student loans, but their support doesn’t have to be financial.

Geiser suggests sharing financial goals with family and friends, which will be encouraging.

“Paying off debt is no fun, you can’t sugarcoat it. But it’s just about developing a new healthy mindset and money management system,” she wrote. “In the beginning it will be difficult to find a buddy or network to support your new healthy money decisions. Do not give up.”

Are you trying to fund your education? Get tips and more at the US News Paying for College Center.


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