How to Pay Off Student Debt

Irritated student

Student debt can feel like the worst thing in the world. You go through all the trouble of working for your degree, and just as you’re done basking in the feeling of a significant accomplishment in your life, you’re hit with a bill that reminds you of the tens of thousands of dollars you had to borrow to get to that point. Dreams of buying a car or a house, starting a family, or generally moving on with your life all have to be balanced against the prospect of paying off your student debts for years to come.

Fortunately, however, you’re not without options. There are a number of ways you can go about settling your outstanding loans, but even this can be confusing, as each way comes with its own rules and regulations.

How Long Do You Have to Pay Back Student Loans?

Schools and loan providers understand that you can’t cough up thousands upon thousands of dollars in a few months, or even a few years; but even so, they would like to get their money back by a set point. For federal loans, that point is usually 120 months, or 10 years, according to the Consumer Financial Protection Bureau, unless you negotiate a different plan with your provider (perhaps by proving financial hardship that precludes a standard payment timeframe). However, drawing up a longer payment plan means that you will have to pay more interest as long as the loan exists.

Private loan providers will have their own timetable of repayment, but the basics will remain: they may allow you to request an extension of the loan’s ultimate deadline at the cost of paying increased interest on the principal of the loan.

Refinance your student loan

Diversify Your Income

However long it takes you, one of the most straightforward ways of chipping away at your principal is to earn enough money where you can honor your financial obligations without starving. For many people, this means adding an extra stream of income to their lives. This income can be from a second job, but there are many other ways to take care of your debt instead of simply siphoning off funds from your paychecks. You could, for example:

The pay you may get from these opportunities may not seem like much at first; but, speaking to US News & World Report, a woman who settled $40,000 in debt in just 11 months promises that “it adds up.” The woman’s extra ventures were so successful that, not only was she able to pay off her debt in under a year, she quit her job and became self-employed. A few extra hours of work a week, or something that you do on weekends, can make a huge difference in how you pay off your student debt.

Pay More Frequently

Girl saving money

Easier said than done, but there is a massive advantage to increasing the frequency of your payments – it slashes your interest rates, preventing them from accumulating and keeping your principal at constantly manageable (and, more importantly, dwindling) levels. Paying twice a month, instead of once a month, will hurt financially in the short-term, but it will also cut down on the length of your loan (and the size of its interest).

Furthermore, making consistent biweekly payments is the best way you can show you are serious about settling your student debt. That way, if – and when – an emergency strikes, and you are unable to continue on that schedule, you can appeal to the loan provider for leniency regarding an increase in interest rates. Your diligence with not only staying current with your payments, but staying on top of them, will engender some very useful goodwill when the chips are down.

You don’t have to go as far as making two whole payments a month. Investopedia suggests simply adding more money to your monthly payment, if possible: $5 here, $20 there, etc. Absolutely everything counts towards driving your principal (and interest rate) down, saving money in interest payments, and proving to the loan provider that you are determined not to let your loan get the better of you.

Or, as Business Insider puts it in their article mentioned above, always pay more than the minimum. Settling for just the basic amount of the monthly payment will drag the repayment on for years longer than needed.

Live Below Your Means

It’s always a good idea to live within your means, but the weight of an outstanding student loan can make it a better idea to go one step further – do without. Do without a car, so you save money on insurance, gas and servicing. Do without an expensive telephone or cable bill. Do without restaurants and a big apartment. Do without a gym membership and exercise on your own, at home. US News & World Report mentions some people even move back in with their parents, paying a nominal rent amount and not having to shell out hundreds of dollars – or even thousands of dollars – a month on a place of their own.

None of those things are fun, but they will help you save money – money that can go toward your student loan payment (more than the minimum, of course). Successful stories of student debt repayments are made of people who sacrificed some kind of luxury or pleasure to get out of debt ahead of schedule.

Scholarships to Help Pay Off Student Loans

Scholarships to help pay off student loans seem a bit backwards – after all, scholarships are thought of to help you as you enter school; they aren’t generally thought of to pay off the money you owe after school. But savvy students will heed the advice of the founder and CEO of, who says that searching for scholarships while in school, with one eye on your inevitable student loan payments, is a top way to get out of debt.

You can find scholarships that will reward your academic and extracurricular activities even once you have matriculated. They may not be as numerous (or as financially rewarding) as pre-enrollment scholarships, but any money that you can put towards paying off your student debt as soon as possible – before interest even enters the equation – is an incredible bonus.

Taking the First Step to Pay Off Student Debt

Student debt can be scary. At over $1 trillion, it has surpassed credit card and automobile debt as the second largest source of personal debt in the United States (behind only home mortgages), according to the New York Daily News and a number of other sources. While paying off your loans does involve financial sacrifice, it can be done manageably if you approach the process carefully and realistically. Continue reading for more information on how you can budget your expenses, understand repayment and refinancing options, and make the jargon and figures comprehensible and manageable.

How long can you wait to repay your student loan? How long should you wait?

College on the Cheap’s Street Team asked students if they can wait until after graduation to begin repaying student loans, and most of them got the question right! Think you know the answer? Check out the video.

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