7 Smart Strategies to Pay Off Student Loans Faster

Student loan debt in America has surpassed $1.7 trillion. Most college grads are eager to pay off their loans faster and pursue other financial goals. This article will explore strategic ways recent graduates can pay down their student loans quickly and become debt-free ahead of schedule.

Refinance Student Loans to a Lower Interest Rate

Refinancing student loans involves taking out a new loan from a private lender to pay off your current student loans. The goal is to qualify for a lower interest rate to reduce your overall repayment costs. By researching lenders like Earnest, SoFi, LendingTree, and Laurel Road, you can find competitive interest rates starting around 2-5% for borrowers with good credit and income.

Be sure to compare interest rates across multiple lenders. Refinancing federal loans means losing certain protections and payment plans, so make sure you have an emergency fund first. Overall, refinancing your student loans can potentially save thousands of dollars in interest and help you pay off debt faster.

Make Bi-Weekly Half Payments to Save Interest

Adjusting your student loan payment schedule can accelerate your payoff timeline. Making bi-weekly half payments effectively provides one extra monthly payment per year. This adds up significantly over a 10-year loan term.

For example, a $30,000 loan balance at 6% interest with standard monthly payments would take 10 years to pay off and accrue $10,619 in interest. Making bi-weekly half payments would pay off the loan 45 months faster and save over $5,000 in interest!

Pay More Than the Monthly Minimum Due

Paying even $20 or $50 extra per month on your student loans above the standard monthly minimum results in significant interest savings and a reduced payoff term. Online student loan calculators allow you to estimate your savings by inputting your balance, interest rate, and extra payment amount.

Every extra dollar goes directly to reducing your principal balance rather than interest. Paying an extra $100 per month could pay off student loans years early and save thousands.

Enroll in an Income-Driven Repayment Plan

For borrowers struggling to make monthly payments, income-driven repayment (IDR) plans like REPAYE and PAYE can provide temporary relief. Your payment is capped at 10-15% of discretionary income, and the remainder is forgiven after 20-25 years.

IDR plans also include an interest subsidy, with the government paying unpaid interest on subsidized loans for the first 3 years. These programs allow lower payments but result in paying more total interest over the life of the loan.

Live at Home or Get Roommates to Save Money

Recent grads can save hundreds per month on rent by living with parents or getting roommates. Avoiding high rental costs leaves more money to put toward student loan principal. Even $300-500 in monthly rental savings can pay off loans years faster.

Make sure to track your extra savings and direct it specifically toward additional student loan payments. Living rent-free with family provides even more flexibility to allocate funds toward debt payoff.

Start a Side Hustle for Extra Income

A flexible side gig like rideshare driving, tutoring, freelance writing or Etsy selling enables borrowers to earn extra income that can be used for faster repayment. Consider taking on side jobs with hourly earnings that can specifically help you make extra principal payments.

Even an additional $200-500 per month from a consistent side hustle provides significant savings. The key is directing all profit directly toward student loans above and beyond the standard monthly payment.

Use Employer Student Loan Paydown Benefits

Some companies like Abbott Laboratories, Fidelity Investments, and Aetna now offer student loan paydown assistance as an employee benefit. Make sure to research employers providing this benefit, which often contributes $50-100 per month directly toward student loan principal balances.

Maximize your full employer contribution amount every year. $1,000 or more per year from your company can drastically speed up repayment. Target job searches at companies offering this in-demand employee perk.


These 7 strategies demonstrate proven ways recent graduates can take control of their student loans and pay them off ahead of schedule. Refinancing, making extra payments, reducing expenses, earning side income, and utilizing employer benefits can help you eliminate debt fast.

Try out any combination of these methods that fit your unique situation and accelerate your student loan payoff date. The freedom of life without student loan debt awaits!