Best 15 Student Loan Hacks to Pay Off Your Debt
Looking for ways to pay off your student debt? Check out these 15 hacks!
Christy Rakoczy Bieber
Oct 07, 2021
Paying off your student loans faster could provide more financial flexibility in your budget. After all, you could eliminate your monthly debt obligation and put that money toward other goals. You could also save money on interest over time by paying off your debt ahead of schedule.
Unfortunately, it's not always easy to repay your student loan debt quickly. The good news is, these 15 student loan hacks can help you to become debt-free ASAP, so your educational loans can become a thing of the past.
1. Set up autopay
If you have federal student loans, you can qualify for a 0.25% interest rate discount if you sign up for automatic payments. Some private student loan lenders offer similar discounts. Reducing your interest rate makes payoff cheaper. Automatic payments also ensure you never accidentally miss a payment.
2. Make payments while you're still in school
Most loans, with the exception of Direct Subsidized Loans, begin incurring interest right away.
If you do not make payments to at least cover interest costs while you are in school, your loan balance will grow. The interest accrues and eventually is added onto your principal balance, so you graduate with a larger student loan debt. That results in higher monthly payments and higher total costs.
If you make interest payments while in school, you avoid owing interest on interest, and you won't graduate with more debt than you initially took out.
3. Make extra monthly payments
If you can send even a small amount of extra money to your loans each month, this extra money can go toward paying down the principal balance faster.
In each subsequent month, this will further lower your balance and reduce the interest that accrues. This makes payoff cheaper, faster, and easier.
The more extra money you can afford to send to your student loan lender each month, the faster your debt will disappear.
4. Make a budget that prioritizes student debt payoff
It can sometimes be difficult to find extra money to pay off student loan debt. But living on a budget can help.
By living on a budget, you can prioritize where your money goes. You can focus on putting extra towards your student loans by making cuts to other spending areas.
5. Make biweekly payments
Student loan payments are due once a month. But rather than making one monthly payment, you could divide the amount you owe in half and pay that amount every two weeks. This approach works well because many people are paid biweekly, so you can make your half student loan payment each time you get a paycheck.
Making payments every two weeks means you end up making 26 half-payments each year -- or 13 full payments instead of 12 full payments. This extra annual payment reduces your loan balance and allows you to save on interest and pay off your loans faster.
6. Put your raises towards debt payoff
If you want to find student loan hacks that don't cause major lifestyle changes, using your raises to pay off your debt is a good option.
See, when your employer gives you more money, you are still used to living on your old paycheck. Rather than spending the extra, use it to make extra payments on your student loans. Since you aren't used to the additional money in your paycheck, you won't miss it -- and it will go a long way toward paying off your debt more quickly.
7. Consider a side gig
If you have time to work a few extra hours a week, consider taking on a side hustle. You can use the money you earn from it to make extra student loan payments and become debt-free ASAP.
8. Make extra payments with financial windfalls
If you get a bonus at work or a tax refund check, you can make a large extra lump sum payment to your student loan debt in order to reduce the principal balance and make payoff cheaper and easier. You can also do this with cash gifts or in other situations where you unexpectedly come into some extra money.
9. Claim the student loan interest tax deduction
Taking full advantage of the student loan interest tax deduction is another great approach for borrowers looking for student loan hacks that make payoff easier. Most people are able to deduct up to $2,500 of student loan interest per year.
Deducting this interest means that you avoid paying taxes on up to $2,500 in income. This could save you a substantial amount on your taxes, depending on your tax bracket. Since you save on your taxes due to your student loans, your educational debt payments wouldn't reduce your take-home income as much.
10. Take advantage of loan repayment programs
There are loan repayment programs available for people in certain professions, such as healthcare or teaching. Explore state-specific and national repayment program options and be sure to take advantage of any that you qualify for. If you can get help repaying your loans, the payoff will obviously be easier.
11. Explore eligibility for loan forgiveness
If you have federal student loans, there are several ways to get some of your loan balance forgiven, including working in a qualifying public service or government job or making 20 to 25 years worth of payments on an income-driven plan. See what loan forgiveness options are available to you and if any of them make financial sense to help you pay off your debt.
12. Look for an employer offering student loan repayment assistance
A growing number of employers offer student loan repayment help as an employee benefit. If you can find a job where your employer helps pay your student loans, you can pay down your debt more quickly because of this extra assistance that your company provides.
13. Choose a shorter repayment term
If you have private student loans, opting for a shorter payoff time often results in a reduced interest rate. While you will pay more each month, your lower rate and shorter payoff timeline mean you will be debt-free much sooner, and your total educational debt costs will be lower.
Federal student loans don't offer a lower rate if you choose a shorter payoff time, but you still save on interest since you don't pay it for as long.
14. Be strategic about your debt payoff order
Although you always have to pay the minimum due on all debt, you can be strategic about which loans you make extra payments on.
If you pay off your higher-interest debt first, you will reduce total interest costs over time. And, since you won't pay interest at a high rate for as long, the payoff will be cheaper and easier.
15. Refinance your student loans
This is one of the most effective student loan hacks because it can make paying your loans cheaper -- which inherently makes payoff faster and easier.
When you refinance your student loans, you get a new loan and use the proceeds from it to pay off existing debt. Your new refinance loan can be used to pay off both federal and private loans if you'd like. But while there is no downside to replacing one private loan lender with another, there are disadvantages to refinancing federal loans. Because you can only refinance with a private lender, you'd have to give up borrower benefits exclusive to federal loans, such as loan forgiveness options.
The good news is, it's often possible to significantly reduce your interest rate on existing private loans by refinancing without giving up any benefits. Lowering your rate means more of your money can go to the principal. And, depending on the refinance loan you choose, you may be able to pay off your debt more quickly and pay lower total interest costs over time.
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Best for Most
Cosigner:
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Rates:
Fixed starting at 4.29% APR APR, Variable starting at 5.89% APR including the .25% autopay discount and the .25% Juno discount.
Juno benefit:
Rate reduction of 0.25%
Check:
Soft Credit Check to get rates; Hard Credit Check to refinance
Alternative Best for Most
Cosigner:
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Check:
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Juno can help you to qualify for a student loan refinance loan at the most competitive possible rate. When you Join Juno, we group your application with other borrowers and negotiate with lenders who compete for the group's business. Through the power of collective bargaining, each individual borrower can generally qualify for much more competitive rates.
Written By
Christy Rakoczy Bieber
Christy Rakoczy Bieber is a full-time personal finance and legal writer. She is a graduate of UCLA School of Law and the University of Rochester. Christy was previously a college teacher with experience writing textbooks and serving as a subject matter expert.
