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how to pay off student loan debt (faster)

Student loan debt in this country totals a staggering $1.75 million*. Currently, more than 43 million borrowers have student loans with an average debt balance of more than $37,100. The takeaway? If you have student loans, you’re far from alone.

But just because student loan debt is a fact of life for you (and so many others), it doesn’t mean you’re powerless. With a little knowledge, planning, and discipline, there are some things you can do to free yourself sooner and move forward with a debt-free life.

Click the button to watch the video to learn 4 tips for student loan repayment.

Read on for a roundup of five strategies to pay off your student loans faster.

1. Take Advantage of the Grace Period

Many student loans come with a grace period. During this time — which typically begins as soon as you stop attending school or drop below half-time attendance — you don’t have to make payments on your loan. While the duration varies from lender to lender, it usually lasts around six months. Grace periods can be useful if you’re not yet employed or trying to save up for another reason, such as to pad your emergency fund or make a down payment on a home. However, interest continues to accrue on most loan types during your grace period. This means you'll end your grace period owing more than when you started it.

You can prevent the amount you owe from continuing to balloon by paying as much as you can during your grace period. Even if your payments during the grace period just cover the interest, you’ll still come out ahead. In addition to saving money on interest charges and paying off your loan faster, there are other reasons to pay your student loans during the grace period. These include getting used to budgeting for your monthly loan payment when it does kick in, and gaining a better sense of how much you can comfortably afford to prepay. (See #3.)

2. Refinance Your Loan(s)

If you’ve got a reliable job, good credit, and a decent debt-to-income ratio, you have another option when it comes to saving money and paying off your loan sooner: refinancing. Whether you want to reduce the rates or term of one student loan or consolidate multiple student loans into a single private loan, refinancing can be a savvy strategy. Wondering if it makes sense for you to consolidate your existing loans? Use our handy student loan calculator to gain a clearer financial picture.

3. Prepay — With Care

You’ll never be penalized for making an early payment or paying more than the minimum for your student loan. Consistently paying more than your monthly minimum will save you a lot of money in the long run and help you be debt-free significantly sooner. Depending on your situation, you can contribute smaller amounts at any point during the month or make a larger, lump-sum payment on the due date. Or mix it up!

However, there is a caveat. In some cases, your student loan service will apply the extra amount to your next month’s payment instead of to your balance. To avoid this, be sure to instruct your servicer to keep the next month’s due date as-is and to apply the overpayment to your loan balance.

4. Use “Found” Money Wisely

Get a generous tax refund, a raise, or some birthday cash? Allocate some or all of it to your loan. Even better? Make your own “found” money with a side hustle, like selling clothes you no longer wear, renting out your parking space, or freelancing on the side.

But even if you don’t have time to earn more money, you can still sock away extra money by making small changes. You could skip your daily stop at Starbucks or bringing your lunch to work and pocket that $5 to $10 instead. Try our Lunch Savings calculator to see how much you can save. Additionally, look into money-saving apps that can help you budget and save better.

5. Check In With Your Employer

Did you know that some employers offer help with paying off student loans? If your company offers a student loan repayment benefit, taking advantage of it can accelerate your payoff process while trimming the total interest you’ll pay over the course of the loan. Keep in mind that program structures vary from company to company, and there may be certain requirements, so make sure to practice due diligence before enrolling.

Pay Off Student Loan Debt Faster With ALEC

While these five strategies answer the specific question of how to pay off student loan debt faster, there are many other ways to manage your post-graduation debt. Utilizing these tips can offer you additional relief.

If you’re ready to take a giant step in the direction of financial freedom by taking control of your student loans, student loan financing can be a powerful tool. Learn more about options to refinance your student loans today!


* Education Data Initiative, Student Loan Debt Statistics, updated April 10, 2022.