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, unless you consolidate your loans into a different repayment plan. However, having 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

When Do You Start Paying Back Loans?

Most student loan providers understand that you won’t be in a position to make your first payment as soon as you step off the graduation stage. For that reason, you are generally given a grace period from the time you leave school – whether for graduation, dropping below half-time student status, or dropping out entirely – to when your first payment is due. This is to give you time to get settled after the conclusion (or termination) of your academic life – to find a job and come up with a viable and feasible payment plan for your student loans. Different student loans have different grace periods:

Other loans, such as the Federal Direct PLUS loan, have no grace period. Usually, you must begin paying it back after the final loan disbursement. Parents of students who are enrolled at least part-time may request a deferment. Graduate students who take out a GradPLUS loan may also defer payments as long as they are enrolled half-time.

However, it may be in your interests to start making payments on your loan even during the grace period. Business Insider tells the story of a young man who, facing $74,000 in debt, resolved to make his payments instantly. He started making payments as soon as he got his first bill, foregoing the grace period and getting a head start on his student debt. That, and a combination of other sound strategies, helped him pay off his $74,000 debt in three years.

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. 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).

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 charged) 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 maintenance. 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 $1.3 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 Business Insider 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.

Frequently Asked Questions

How can I plan for paying back student loans?

Paying back student loans without a proper plan often gets you into trouble. Ideally, you should begin planning for repayment while you are in college, and maybe even start paying down the principal or interest on your loan then. Once you get a job, start paying back your student loans by putting about 10% of your monthly paycheck towards them. If you are having difficulty paying back student loans, consider student loan consolidation or refinance, a process that would allow you to consolidate your loans into one, aggregate loan repayment amount for the month which can be lowered down as well if you can arrange for a co-signer with a good credit history.

How might I begin my repayment of student loans?

The process of repayment of student loans differs for each type of loan. Federal student loans offer the flexibility of deferred payments and a grace period that allows students to graduate without the tension of repayment. However, this is not the case for all loans. For private loans, each private lender has different criteria for repayment and other terms and conditions. Most student loans do allow deferred payment but private loans do not always offer this perk.

Is loan consolidation or refinance an option to pay off student loans?

Yes. Students who have taken loans from more than one lender to cover their cost of education can look into loan consolidation as a way of making the process to pay off student loans easier. It becomes difficult to keep track of several repayment dates and amount in a month, so the single loan and monthly payment that consolidation or refinance offers makes it much easier to manage and pay off student loans. At times, loan refinance also helps the student obtain a lower interest rate.

What can help paying student loans?

The most important thing that can help paying student loans without much difficulty is planning. Before you commit to taking out a student loan, chart a repayment plan with ideas regarding how you’ll start making payments when they are due, and be ready to stick to this plan. Borrow only what you need, and not a penny more; furthermore, be aware of their payment timings, installment amount, duration and the interest rate. If you’re having trouble making your payments on the loan, consider filing for deferment or forbearance.

I’m not sure how to pay for college. How can I manage this?

How to pay for college is one of the most important questions for many high school students who are nearing graduation or who have already graduated. Fortunately, there are plenty of ways to pay for college. You can look into federal, state, institutional, and/or private sources to pay for college. Federal financial aid is the cheapest form of financial aid available, and should be the first means of aid sought by every applicant. State or institutional assistance programs are additional aid options, though are often less available than federal or private financial aid. Applicants who have exhausted from all other forms of financial assistance can look to private financial assistance as a final measure.

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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