Pay Off Your Students Loans Without Feeling Broke

Sergio Guevara

Sergio Guevara

Head of Client Success at Gradehacker

Updated on September, 2023

How to Pay Off Your Student Loans

If you are a college student with student loans and are looking for the best tips to pay them off in a smarter way, you have to:

You deserve to plan your college finances in detail!

Let our team of experts help you review your situation and choose the right financial aid option for you!

New call-to-action

You deserve to plan your college finances in detail

Let our team of experts help you review your situation and choose the right financial aid option for you!

New call-to-action

Paying off your student loans is a unique feeling that all students in debt should experience.

Still, even if there are many loan servicers that will help you pay for college, there’s not much information on how to prepare for the repayment period.

So, if you’re looking for the best tips on how to pay off your student loans in the best way possible, we have the solution for you.

Here at Gradehacker, we are the non-traditional student‘s #1 resource. From our years of experience, we know firsthand how students struggle with financially managing to go to college.

Many feel like the majority of their budget goes to paying off student loans, and if you are one of them, here is the ultimate strategy on how to pay your student loans without feeling broke.

Consider these steps to pay your student loan debt and escape that gloomy financial crisis!

Why Are Student Loans so Important?

Student loans are commonly associated with frustration, stress, and massive debts. The first thing you should know is that you are not alone since student loan debt is a national crisis phenomenon.

America is now facing one of the most striking student loan debt crises in history. Don’t believe us? According to EducationData, the American student debt is over $1.747 trillion and affects more than 43.4 million students across the country.

However, these past few months have been a relief for those with federal student loans.

First of all, the US Government paused loan payments and set interest rates to 0% during this time for federal student loan borrowers. This gave them the opportunity to rest from making payments or even the chance to catch up with old dues.

Secondly, some people believe that anywhere from $10,000 to $50,000 could be forgiven from their federal student loans, as President Biden has planned since he campaigned for the White House.

But there is nothing certain about that, and the pause on the student loan payments is about to come to an end on October 1st. And, of course, it’s always a complex situation for those with private student loans, especially those who have served in the military or have taken out larger loans.

One important aspect to consider is the principal balance of your student loan. This refers to the total amount you initially borrowed without factoring in any interest or fees.

Be aware of the repayment cost, as it directly impacts the total amount you will need to pay back.

Late payment is another critical factor to be mindful of when dealing with private student loans. Missing a payment or paying after the due date can result in penalties, fees, and possibly a negative impact on your credit score.

It’s important to stay organized and keep track of your repayment schedule to avoid any late payment issues.

Subsidized loans typically have the interest paid by the government while the borrower is in school or during deferment periods. However, once the repayment period begins, the borrower becomes responsible for the interest.

So, what can you do to be smarter on how you pay off your student loans?

1. Keep Track of Your Loans To Avoid Future Headaches

This sounds crazy, but many students take out loans without knowing the whole picture. Commonly, borrowers aren’t fully aware of all the loans they have taken until after graduation.

So, what can you do? First, identify your lender.

In the National Student Loan Data System you should be able to check your federal loan status. Here, you can check and confirm all the information. 

In the case you have a private student loan, you should be able to contact your lender directly if you have any inquiries or doubts, or you can check your credit score report for that information.

By doing this, you will know all your outstanding loans and services, so you can organize yourself and find that specific loan information.

Additionally, you can get a free credit report on the Annual Credit Report website to double-check that information.

It’s essential to do regular credit checks to ensure that you are aware of your economic situation and explore potential student loan repayment options that align with your long-term financial goals.

Bi-weekly payments can help you pay off your student loans faster and potentially save on interest over time.

Find the best scholarships for adult students

 If you are an adult looking for academic opportunities, see your possibilities here!

Find the best scholarships for adult students

 If you are an adult looking for academic opportunities, see your possibilities here!

2. Choose The Payment That Suits You Best

Now that you know your loans and how much money you have to pay, this is the moment when you decide how you will pay your loans.

You should know that there is more than one repayment option.

One way is to switch your loan repayment to income-driven plans. This way, you’ll be paying about 10% to 15% of your discretionary income, depending on the plan.

When considering income-driven repayment plans, communicating with your student loan servicers is essential. By discussing your options with them, you can gain valuable insights and guidance to determine if income-driven repayment plans are the right fit for you.

There are also other student loan repayment plans, such as:

You should know how the loan variable interest rates are or if it’s fixed. In case they have a variable rate, it will adjust according to the market. This means that if the interest rate goes up, your monthly payments will increase as well.

Evaluate which payment options offer you a realistic plan so that you can have a doable monthly payment based on your necessities and easily track your loan balances.

Also, you can use the Federal Student Aid website to know which payment method will suit you best according to your income, family, and taxes.

And if you are unsure how to choose a student loan, you can watch our video!

3. Use Your Grace Period to Start Early

After you graduate, it’s usual that your lender grants you a six-month grace period where you don’t have to make any monthly loan payments.

Do not waste the periods of deferment and use it to:

Follow these steps, and you’ll get used to paying a specific amount each month to your debt.

During this six-month grace period, it’s critical to familiarize yourself with the terms of your loan, including minimum payments, loan terms, and the time frame in which you are expected to start making regular payments to avoid any potential penalties or difficulties in the future.

4. Create a Budget to Pay Your Debts

Create a budget!

Budgeting isn’t just a good habit during college; it’s useful throughout life. Create a budget by acknowledging your income and setting your fixed expenses. And include everything! From regular college costs to important everyday expenses.

Consider your priorities and act according to your debts.  By aligning your monthly payment with a standard repayment plan, you’ll save a lot of money and pay your debt faster.

And if you’re looking for more tips to improve your finances, you should consider using budgeting apps to make this step easier. 

Looking for a simple FAFSA guide?

CTA Entire Class Bundle Alberto

Understand better how Financial Aid works and feel confident taking that step!

Looking for a simple FAFSA guide?

Understand better how Financial Aid works and feel confident taking that step!

5. Increase Your Income

Cutting off expenses is necessary to pay your debt, but increasing your income is just as important.

You can start by asking for a raise. You might not get one the minute you enter the workforce, but you can reach out to your boss or employer and ask what you can do to earn it. See how you can manage more responsibilities, perform more tasks, or improve your results.

Another option is doing other activities requiring less time and giving you a small income. Maybe you can consider getting a part-time job or taking extra shifts in your current position.

You can also start a side hustle or take free courses where you learn new skills to expand your area of knowledge.

This way, you’ll live better but also make extra payments if you need to, especially if you have 20-25 years of repayment for your type of loan.

6. Have a Simpler Lifestyle to Avoid More Debts

This might seem like a logical step, but don’t be so surprised!

Believe it or not, many people consider making large purchases even though they haven’t finished paying for their student loans. From throwing a big wedding to buying a new car, these are nice events that most people desire but that no one with a loan debt should have.

Maybe these examples are a bit too extreme, but consider the small purchases, such as the daily coffee you buy when you leave home or trips to the mall and leaving with a few shopping bags.

We aren’t saying you can’t have personal expenses here and there, but think about how all of these purchases add up to your debt and how sooner you could end it by paying it first.

Just wait until you can actually afford the things you want to buy.

Making an additional payment towards your student loans can not only accelerate your repayment progress but also potentially qualify you for certain student debt relief programs, so don’t enroll in more loans if you can’t afford them.

Having Doubts on How we Can Help You?

Get in touch with us!

New call-to-action

Having Doubts on How we Can Help You?

Get in touch with us!

New call-to-action

Successfully Pay Off Your Student Loans

Student loans can be stress-provoking and overwhelming. But remember, whether you have a federal or private loan, you are not alone.

These simple tips will help you successfully pay off your entire loan. It’s all a matter of being smart and budgeting correctly. Think of the investment you are making towards your future!

We understand how overwhelming this aspect of college finances can be. We hope that these tips will change your experience paying off student loans. 

But if you aren’t sure what are the next steps for you or don’t know how you can graduate faster, you can book a meeting with our team and find out!

If you are looking for financial-related tips, check out our related articles:

Sergio Guevara

Sergio Guevara

Sergio Guevara has been an avid essay writer and researcher for Gradehacker since 2018. He has helped countless non-traditional students with a plethora of subjects like literature, nursing, and history. Now as the head of the Client Success Team he’s constantly involved with SEO-driven content that can make the life of both non-traditional and traditional college students much easier. You can find him on LinkedIn