According to Forbes, student loan debt has become a $1.5 trillion dollar crisis in the United States. That’s trillion with a T, not billion! With a total of 45 million borrowers, spanning across all demographics, student loan debt has become the second-highest consumer loan debt, falling just behind mortgages. It’s higher than both auto loans and credit card debts consumers have compiled over the years.

With borrowers in the 2017 class owing just shy of $30,000 in student loan debt, and an average of 11.4% of students in default or delinquent on their payments (90 days or more they haven’t made payments), it looks like there’s no clear cut solution to getting out of debt. But, there are some viable options that students can turn to if they are seeking options of how to pay off student loans fast. Here we’ll cover a few of the methods you can utilize to get your student loan debt down, in less time, regardless of how much you owe.

Student Loan Debt Statistics

Source: Forbes

Strategies to Help Pay Down Student Loans Faster

You obviously want to bring down your total debt amount in as short a period of time as possible. However, with your car payment, rent or mortgage, and other expenses, how do you find the money to do that? One benefit recent graduates who are holding onto nearly $30,000 in student loan debt have in their favor is the fact that they’re earning higher salaries than in years past. Money.com notes that the average starting salary for those grads from the 2017 class is just shy of $50,000 annually. Therefore, students who leverage their options properly, rather than going out and making foolish purchases, can start repaying their debt amounts down quickly. Here are some tips to help you start to repay your student loans and how to bring the total amount owed down as quickly as possible.

1. Make Sure You Know The Details of Each Loan

Understanding the details of your loans is the first step in setting up a plan if you are looking for options on how to pay off student loans fast. For example, private versus federal loans will have several differences between them. Private loans are offered through private banks, credit unions, and lenders, who are free to set their own interest rates and repayment terms. Federal loans, are based on a student’s need and are federally funded by the government. These loans will carry a much lower interest rate than private loans.

Some additional differences to consider between the different student loan types are:

Federally subsidized loans are determined based on a student’s financial need. The biggest factor in qualifying for these loans is your parent’s income

• Federally unsubsidized loans are offered to undergraduate and graduate students but aren’t linked to financial need. These will normally carry higher interest rates

• Direct PLUS loans are for parents of eligible students and are available to pay expenses while students are in school. Eligibility is determined by a credit check or credit score

With federal loans, you will have a quiet period after graduation before you have to start repaying. Bear in mind that interest rates do start to accrue while you’re in school, even if you aren’t repaying. But those rates are typically low. On the flip side, with the private lenders, they are in charge of dictating loan terms. As long as students or borrowers agree to those terms, they must abide by the repayment terms, interest rates, and other terms banks or lenders set in place.

If possible, taking out only federal loans is your best approach. However, based on your financial need, AKA your parent’s income, you might be forced to go the private loan route.

Regardless, make sure you understand the terms, interest, and repayment requirements of your loans.

2. Choose a Repayment Option That Works for You

Just as important as understanding the loan terms is understanding how you’ll be repaying those loans. Some options include:

• Standard repayment plan where students pay a fixed amount for 10 years (all students are eligible for this)

• Graduated repayment plans are those where payments are low at first then increase progressively; repayments are made over the course of 10 years

• Extended repayment plans can be flexed over a period of 25 years; students must have more than $30,000 in debt

• Revised pay as you earn is based on your income. The payment terms and amount will increase as you earn higher salaries. Payments are recalculated annually as 10% of your total salary or earnings and outstanding balances are absolved after 20 years, as long as you don’t default and make your payments on time

• Income-based repayment is calculated based upon your yearly income and set at 10% or 15% of your discretionary income. Any outstanding balance is absolved after 20 or 25 years

• Income contingent and income-sensitive repayment plans are also available for students

It’s important that you choose a repayment plan based upon your ability to pay. So, if you’re looking for options on how to pay off student loans fast, you’re obviously going to want to pay higher amounts monthly when possible. So, choosing a graduated plan or standard plan might be a better approach than income-based plans.

Remember that even if you aren’t paying, interest rates are accumulating on your loans. So, it’s best to repay as much as you can towards interest, in order to avoid those amounts climbing up too high.

3. Pay Off High-Interest Loans First

If you’re stuck with multiple student loans, and have both private and federal, start with the private loans. You’re going to want to pay more towards loans that have higher interest rates attached to them. Why?

Because your monthly payments are primarily going towards the interest accruing on your loans when you first start paying. If you can put a little more money each month towards the loans with higher interest rates, this will help bring down the principal balance faster. If you simply pay the minimum each month, it will result in a never-ending battle of trying to fight off rapidly accruing interest.

A good way to go about repaying loans is to pay the minimum monthly required on the federal loans and put more money into paying down the private loans. Once you have paid down the private loans, then you can begin paying more toward your federal or other lower interest rate loans.

Refinancing might also be a good option with private loans. Why? Because you could:

• Reduce the overall interest rate on your loans by aggregating all of your loans into one big one. If you have three private loans with rates of 8%, 10%, and 15%, you might be able to consolidate all three loans with another company for a much lower rate

• It becomes one monthly payment rather than multiple payments to many different lenders

If you have both private and federal loans, work your way from highest to lowest interest rates, and pay off the smallest balance to the largest.

4. Pros and Cons of Consolidating and Refinancing Your Student Loans

Consolidating or refinancing your student loans is an option many borrowers should consider. So, what are the benefits or drawbacks of choosing this option? And, is it right for you? First, let’s determine what exactly this means.

Refinancing simply means that you are taking out a new loan to pay down your old loan. You typically will only do this if you can get a lower interest rate on your new loan compared to the interest rate on your old loan. This will decrease your monthly payments and you will pay less in interest over the life of the loan.

Consolidation simply means refinancing multiple loans into a single loan. It simplifies your payments. Instead of repaying multiple loans each month, you’re only making one payment each month.

Some of the benefits and drawbacks of consolidating or refinancing loans can include:

The Pros

• It’s only one payment each month so you’ll never forget to schedule an online payment or send a lender a check. This will help you to avoid missing payments

• Lower payments are possible either through lower interest rates or longer repayment terms

• You can add a cosigner onto your loan to help reduce monthly payments and interest. This is especially beneficial if you don’t have a great credit score

• If you do have a good credit score, you will likely get lower interest rates. This can help drastically reduce your interest payments and help save you money over the life of the loan

• Prevent default. Consolidation makes monthly payments more manageable, helping you to prevent defaulting on your loan

The Cons

• Refinancing may make you lose your federal repayment plan benefits

• Eligibility requirements are often steep, so it might be hard to get a lender to work with you in some cases

• Depending on your credit score, your interest rate may actually increase

• Some lenders may only offer variable interest rate refinancing options, which can cause payments and interest to fluctuate. Depending on where interest rates go you might end up paying more over the course of the loan

As you can see, the pros (in most cases) outweigh the cons. But, do your research, and make sure you choose the right plan and the right lender for you. Oh, and read the fine print… those words really matter!

5. Make Bi-Weekly Payments to Save on Interest

Another option for those looking to learn how to pay off student loans faster is to make bi-weekly payments on your loans instead of monthly. All you need to do is take whatever you pay each month, divide it by 2, and then pay that amount every two weeks.

In doing this, you are cutting down the amount of interest that accrues between payments, as well as making one extra payment throughout the year. Remember how we focused on paying higher interest loans first, with bi-weekly payments you’re going to pay on those loans more often, reducing the amount of interest accruing, which in turn, will start cutting away at the principal amount faster.

Not all lenders will allow you to do this, so the first step is to check with your lender to make sure they do accept bi-weekly payments.

Make sure you discuss how you want the payments to be made with your lender. Give them clear instructions on how to apply for those extra payments; for instance, a few times a year you will have three payments rather than two. So, tell the lender to apply those funds to your loan balance, as opposed to the next month’s payments. Try to make sure your due dates align with your paycheck if possible to help you avoid late payments and to ensure you have the funds available.

6. Sign Up for Autopay to Reduce Your Interest Rates

Studentloanhero.com highlights that many lenders are willing to offer discounts to students who opt for autopayment of their loans. The reason being is that with such high default rates today, lenders like to see that money will automatically be pulled from your accounts each month rather than relying on individuals to make those payments. You can set up autopay in a few different ways. You can set up:

• Automatic withdrawals allowing your lender to deduct funds each month

• Set up bill pay with your bank directly, or

• Utilize credit card bill payment options (not recommended if you’re struggling with credit card debt)

Regardless of which one you choose to set up, lenders are happy to know they’re getting their money each month automatically. In turn, you will likely pay a lower interest rate than if you were to manually submit your payment online each month. So, make sure to discuss these options and possible discounts with your lenders.

7. Stay Consistent and Use “Found Money” to Make Extra Payments

Investopedia.com suggests automatically applying found money to your student loan payments. What is found money? It comes in many forms including:

• Refunds or rebates on purchases you make

• Your yearly tax returns

• Income earned from side jobs

• Bonuses you receive at work

• Cash gifts or holiday gifts

Remember, your salary is what you use to pay your monthly expenses, including student loans. So, if you have a little spare cash, that you would otherwise spend foolishly, put it to good use and pay down your student loans!

With found money, you can easily knock off several hundred or thousands of dollars at once. So, why not utilize it to help bring down that total amount owed on your student loan balance?

Student Loan Refinancing Rates

Refinancing your student loans is one of the ways in which you can repay them quickly and reduce interest rates. Refinancing companies offer both variable and fixed loan types for both graduate and undergraduate degrees. Some rates available for students today are available with multiple companies. Here are some rates offered by different companies according to Studentloanhero.com:

• Earnest offers rates as low as 1.99% up to 6.89% for private and federal loans

• Figure Student Loan Refi has rates between 2.32 to 6.31% for private and federal loans

• Splash Financial offers rates from 2.3 to 7.6% for private and federal loans

• Credible offers as low as 1.8% for variable and 3.4% for fixed interest rates on federal and private loans

Each of these refinancing companies also offers variable repayment terms, ranging from 5 years, up to 20 years. And, these aren’t the only companies you can refinance with. Depending on the total amount owed on your student loans, the institution you graduated from, how old your loans are (what year you graduated), and other variables, you should compare multiple refinancing companies prior to choosing one.

Interest rates on your refinanced loans will primarily be determined by:

• Your credit score

• Income

• Savings

• Degree type, and

• Whether you have a co-signer

It’s worth comparing a few companies to refinance with, prior to choosing one, as you can see from the range of rates above just how much interest rates can fluctuate.

Creative Ways to Pay Off Student Loans

Still have quite a big balance you need to pay down? Get creative. Some additional ways you can make money to pay towards student loans include:

• Get a side hustle or job (drive for Uber or Amazon)

• Delivery driver (tips are cash, so you can easily set this towards your found money pile)

• The military will pay your debt off

• Get a government job (the benefits are great and your debts are absolved after about 10 years if not repaid in full)

• Volunteer. Americorps, Teach for America, and others will repay your debt

This list is by no means exhaustive. There are plenty of ways to make some extra money. Applying those extra funds towards your loan balance could help you pay off your student loan debt even faster.

What Are Great Lakes Student Loans

Great Lakes is a student loan servicer and currently has over 10 million borrowers. A loan servicer acts as an intermediary between you and your lender by collecting monthly payments, assisting with loan forgiveness, and helping you transition to income-based repayment plans, in addition to other services.

It can help by serving as an intermediary in the event you have a hard time making a payment on your loan, need to set up a different repayment plan, or otherwise require assistance with your federal loans. Not all loans are serviced through Great Lakes, so the National Student loans Database System can help you find out if your loans are/aren’t serviced by them.

In addition to serving as an intermediary, Great Lakes can help you as a borrower by:

• Working with your lenders if you have missed payments

• Providing help with refinancing or consolidation

• Answering general questions or other concerns regarding your loans


You’re not alone when it comes to student loan debt. But, figuring out how to pay off student loans fast, is a great approach towards improving your financial well-being by avoiding these debts lingering around for years to come. So, consider a few of these approaches to repay your debt faster, and living comfortably without having to worry about student loan debt following you for the next 40+ years. Start your repayment plan today, and get on a fast track towards reducing your student loan debt with a few of these great tips.

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