How to Pay Off Student Loans Fast: 9 Useful Hacks

Still paying off student loans? These nine hacks can help you speed up your loan repayment plan, save money, and become debt-free in no time.

portrait of Genevieve Carlton, Ph.D.
by Genevieve Carlton, Ph.D.

Published on February 10, 2022 · Updated on February 23, 2022

Reviewed by R.J. Weiss

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How to Pay Off Student Loans Fast: 9 Useful Hacks


In 2021, 43.4 million U.S. borrowers owed an average of around $37,000 each in student loans. And 20 years after starting college, half of all borrowers still owe at least $20,000 on their loans.

The problem is even worse for Black borrowers. A 2019 study from Brandeis University found that the median student loan debt for white borrowers dropped by 94% two decades after college, while Black borrowers still owed 95% of their loans.

According to the study, Black college students may have fewer family resources to help with loans. Later, they may also face discrimination in the workforce, which can hinder their ability to earn money to make student loan payments.

Many U.S. borrowers find themselves making payments for years only to watch their repayment amount grow. The federal government paused federal student loan payments during the pandemic. However, many borrowers owe more now than they originally borrowed — even when making payments.

According to a recent report, 63% of borrowers who voluntarily paid their loans during the COVID-19-driven payment suspension owe more than their original loan distribution, even though interest has not accrued for nearly two years.

Borrowers wondering how to pay off student loans fast may feel helpless. While taking out fewer loans is best, what other steps can you take to reduce your loan balance as fast as possible?

These nine tips can help you pay off your student loans in less time than you thought possible.

1. Pay More Than the Minimum

Lenders set a minimum monthly repayment amount for student loans. But paying more than the minimum can go a long way toward eliminating student debt fast.

Take these examples from the Federal Student Aid office. A borrower who takes out $15,000 in student loans can pay off that balance a full year earlier by sending in an extra $15 per month. Throw an additional $60 per month at the balance and you'll pay it off three years earlier.

Make sure to ask your lender to apply extra payments directly to the principal. That can save you a bundle in interest — over a 10-year repayment plan, paying an extra $60 a month could mean saving nearly $1,200.

2. Make Interest Payments in School

Interest is a major reason borrowers pay down their loans only to watch the balance barely change. But you can pay off loans faster and save money by making interest payments while still in school.

Most student loans begin accruing interest long before borrowers begin making payments. Other than Direct Subsidized Loans offered by the federal government, borrowers will see interest accumulate while enrolled.

How much of a difference can that make? If you borrow $27,000 in unsubsidized loans while in college, you'll add around $3,400 in interest to the loan by the time your first monthly bill shows up.

Private loans with higher interest rates can rack up even more debt. On a $33,000 loan with 9% interest, borrowers will add more than $9,000 to their balance in interest six months after graduation.

Paying down the interest while in school means paying off the loan faster. When it comes to financing your education, prioritizing subsidized loans can also make it easier to repay loans down the road.

3. Research Repayment Plans

The Federal Student Aid program puts borrowers on their standard repayment plan, which sets monthly payments based on a 10-year repayment schedule. For most borrowers, this plan will pay off the loan on the fastest timeline. Still, other plans may make more sense for you depending on your income and how much money you borrowed.

Some repayment options, such as the extended repayment plan, use a longer timeline. And while income-based repayment plans make sense for some borrowers, these plans typically do not prioritize paying off loans as quickly as possible.

4. Refinance to Lower Your Interest

Borrowers can refinance their student loans to lower their interest rates and pay off their loans sooner.

Consider an average loan of $36,400 on a 10-year repayment plan. Borrowers paying the average federal loan interest rate of 4.66% would pay $9,200 in interest. But by refinancing to a 2.59% interest rate, borrowers can save $4,250-$6,750 in interest, depending on how quickly they pay off the loan.

Loan consolidation may also help borrowers lock in lower interest rates and pay off their student loans faster. Before you refinance or consolidate any loans, look into how the change will affect your monthly payments and the full repayment date.

5. Pay Off Loans With Every Paycheck

Most lenders require monthly payments for student loans, but you can pay your loan off in less time by making more frequent payments.

For example, making biweekly payments when your paycheck hits your bank account can mean paying off your debt faster. That's because making 26 biweekly payments at half the monthly loan amount adds up to one extra full payment each year.

6. Research Loan Forgiveness Plans

The Federal Student Aid program offers several loan forgiveness plans. Teachers and other professionals in public service fields may qualify for loan forgiveness. However, loan forgiveness can require 120 monthly payments, so some borrowers may be able to pay off their loans in less time.

Similarly, you should research loan discharge options. Students whose college closes, as well as those with a permanent disability, can apply to discharge their loan balance.

7. Sign Up for Automatic Payments

Many lenders lower the interest rate for borrowers who sign up for automatic payments. The Federal Student Aid program, for example, cuts interest rates by 0.25%. The lender then automatically deducts payments from the borrower's bank account.

While a small decrease in interest likely won't mean paying off loans faster, automatic payments can ensure you don't miss a payment and end up pushing back your repayment date or losing eligibility for loan repayment plans.

8. Research Employer Student Loan Repayment Plans

Some employers offer student loan repayment plans as an employee benefit. This perk can save you money while also paying off your loans faster.

These plans take several forms, according to SHRM. For instance, employers may make monthly payments to the loan servicer in employee-assisted repayment plans. Other employers may make matching contributions, similar to a 401(k) match. Finally, some employers may let their employees choose between a student loan contribution or retirement contribution.

Only a small number of companies offer these benefits. Borrowers on the job market can research employee benefits and ask about student loan repayment plans.

9. Use Your Tax Refund to Pay Off Loans

Extra payments are one of the best ways to pay off student loans fast. But many new graduates struggle to find money for extra payments. Putting your tax refund toward your student loan balance can potentially take years off your repayment date.

Similarly, consider setting aside bonuses, raises, and monetary gifts to pay down your loans. As with other extra payments, make sure your lender applies the money toward your principal rather than toward interest or your next monthly payment.

And don't forget to apply for tax deductions based on student loan interest. Increasing your refund might mean becoming debt-free sooner.


DISCLAIMER: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.


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