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8 Tips for Paying Off Student Loans

The equation should be simple. Do well in school, go to college for a marketable degree, get a well-paying job in your field. Unfortunately, more students than ever are faced with unforeseen obstacles: rising tuition costs, hidden additional fees on campus, or the reality of accepting an entry-level job after graduation with little hope of covering the bills. 

With the value of a higher education ever on the rise and more careers requiring degrees, the original equation cannot be altered, leaving more students than ever before are finding themselves saddled to large sums of student loan debt. 

Students are left to reassess their solutions to the financial equation and find themselves in more debt than expected. Thankfully, this isn’t the end of the story. Follow our steps to pay off your loan sum efficiently, so your income is freed to focus on your passions, not your bills.  

  • Save money during college. Setting aside as much of your income from campus jobs as possible will allow you to pay off a large sum of your debt after you graduate. Since interest accrues quickly, paying off your loans swiftly allows you to tackle your actual loan debt, rather than a mountain of accrued interest.


  • Refinance federal loans into a private loan. Federal loans tend to have higher interest rates than private loans. It will be up to you to research the right loan lender to fit your individual situation, but reducing the amount of interest accruing will pay off your actual loan amount faster.


  • Pay more than the minimum payments. Make a goal to pay a set amount over each minimum payment, to equal an additional payment each year. Even one extra payment per year can have a significant impact on your student loan balance. If you are paid biweekly, split up your loan payment into two payments per month to lessen the shock to your wallet. 


  • Look into forgiveness options for your field. If you are pursuing a career in the nonprofit sector,  or a federal, state or local public service field, look into the federal loan forgiveness options available through the Public Service Loan Forgiveness program.


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  • Earn less after graduation. If you are one of the millions of graduates who find themselves disillusioned with the job opportunities available after college, the good news is that there is a financial silver lining to accepting a lower-paying job. Having a modified adjusted gross income of less than $80,000 secures an annual student loan interest tax deduction of $2,500 for each year you pay on the interest of your student loans. File as a single taxpayer or “married filing jointly” to make sure you continue to receive this tax credit each year you qualify.


  • Live humbly. Take advantage of the exposed brick and historic home trend by living in a more up-and-coming area to save on rent rather than a shiny new place. Or buy yourself an easy fixer-upper house for your first home if you can’t stand throwing money into a rental home. Building equity is a great way to get ahead in the real estate game.


  • Snowball your payments. If your loans are not consolidated, try to pay off the lowest one first, and then transfer that amount you were paying on both loans to your largest debt. This is called debt snowballing, or rolling over your payments. Following the debt snowballing plan will have you throwing real snowballs at your vacation home in Aspen in no time. 


  • Start a side business. Do some research into capitalizing on a talent or skill by setting up a side business, with the plan to dedicate all the funds to your student loans. Not only does this allow you to set measurable financial goals to pay off your loans and a matching sales goal, the competitive feeling behind hitting your benchmarks can be exhilarating. It also leaves you with a profitable skill or business once your debt is paid in full. Side hustles can be anything from making adorable baby bows on Etsy to driving for UberEats. There can be serious dough in starting a side business, which can set you up for financial freedom long after your student loan is covered. 


As the cost of education continues to increase each year, so do national borrowing levels. Your debt does not need to dictate the rest of your financial life, or loom over you for years to come. Set yourself up for success after graduation by following these payment strategies closely as you enter the professional workforce. 

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Author: Michaela Schieffer

Michaela Schieffer is a former admissions counselor and now independent college counselor, guiding students through their college applications and essays through Moon Prep's specialty lies in the Ivy League, direct medical programs (BS/MD), and highly competitive universities.