5 Tips for Paying Off Student Loans Quickly

a stack of 100 dollar bills set aside for paying off student loans

With the rapidly increasing cost of education, student loan debt has become a reality for many graduates. At the same time, discovering the most ideal way to repay student loans can create a unique challenge of its own. To help you navigate the best path toward financial freedom, this article provides five tips you can use to help repay your student loans and take more control of your financial future. Read on for five tips designed to help you pay off your student loans.

Paying Off Student Loans Starts with Creating a Budget

Whether you're paying for a car or saving for a home, it's vital to budget, prioritizing your savings and/or investments and bills. The right budget can help you answer key questions:

  • Where you're spending your money
  • Are there ways you can spend less?
  • What expenditures can be reduced to put more on your student loans? Contrary to popular belief, your budget isn't a rigid, unmovable plan, and there are no one-size-fits-all standards you must apply. Instead, your budget should be built around your needs, situation, and goals.

    What Is the 50/30/20 Budgeting Rule?

    One popular budgeting approach is the 50/30/20 rule. Here's how it breaks down:

  • 50% of your income should go to basic and fixed needs, like mortgage, rent, car payment, transportation, insurance, healthcare expenses, or minimum loan payments.
  • 30% of your income should go toward variable expenses or wants, such as cable, entertainment, clothing, and travel.
  • 20% of your income should go toward savings and debt, such as extra debt payments or emergency savings.

    As we mentioned, no budget is rigid. And when you have student loan debt, you may want to tweak the categories and percentages based on your goals. For instance:

  • 60% of your income should go toward fixed or basic needs, including student loan payments.
  • 20% of your income should be for variable or discretionary expenses.
  • 20% of your income should go toward savings or extra debt payment.

    You can continue to adjust these percentages to map out a strategy. There is no right or wrong way to budget.

    Make More Than the Minimum Payments

    The minimum monthly payment on any loan is just that — it's the least you should pay. In most instances, the minimum monthly payment is nothing more than the interest that accrues. Because of this, it's a good practice to pay more than the minimum monthly payment, which can help:

  • Pay your student loans off faster.
  • Reduce the total cost of the loan.
  • Improve your debt-to-income ratio.
  • Help improve your credit score.

    Make Payments on Time

    On-time payments are one of the most important credit signaling factors. According to Experian, your payment history can account for anywhere from 30% to 40% of your credit score. However, your credit score is one reason you should make on-time payments. Late payments can cause your student loan balance to increase and lead to myriad consequences. Make sure to check with your lender in regards to their policy.

    Consider Consolidation or Refinancing

    Another possible tip for paying off student loans faster is to consider loan consolidation or refinancing.

    Student Loan Consolidation

    Student loan consolidation is a solution exclusively for federal loans. As the name suggests, consolidation combines multiple student loans into one federal loan, which offers many benefits:

  • You'll only pay one monthly payment.
  • May open the door to different forgiveness options.
  • Can make you eligible for income-driven repayment plans.

    While student loan consolidation can reduce your monthly payment by extending the term, it may cause your total interest to increase.

    Student Loan Refinancing

    Student loan refinancing works similarly to consolidation. Although student loan consolidation works for federal loans, refinancing is suitable for private and federal loans. A few key benefits of student loan refinancing include:

  • You'll only pay one monthly payment.
  • Possibly lower interest rates.
  • Help you save money.

    However, student loan refinancing may make you ineligible for different federal loan protection, repayment options, and forgiveness programs.

    Take Advantages of Any Discounts or Loan Forgiveness Programs

    If you want to pay off your student loans faster, seek out different discounts or student loan forgiveness programs.

    Common Student Loan Discounts

    The most common type of student loan discount is the auto-debit credit or direct-debit discount. It reduces your interest rate when you set up automatic payments for your student loan. Some lenders may offer an interest rate discount for utilizing other products or for making consecutive on-time payments. Speak to your loan servicer to explore what's available.

    Student Loan Forgiveness or Cancellation

    Student loan forgiveness programs can eliminate some or all of your student loan debt. The most publicized student loan forgiveness initiative was when President Joe Biden announced the Student Debt Relief Plan, which offered eligible borrowers up to $20,000 in loan forgiveness. In addition, explore the following programs to determine your eligibility:

  • Public Service Loan Forgiveness
  • Teacher Loan Forgiveness
  • Closed School Discharge
  • Perkins Loan Cancellation and Discharge
  • Total and Permanent Disability Discharge
  • Discharge Due to Death
  • Discharge in Bankruptcy

    Government Repayment Plans

    SAVE Repayment Plan

    With student loan repayments resuming in October 2023 following the end of the COVID-19 payment pause, the U.S. Department of Education has launched the SAVE (Saving on a Valuable Education) Repayment Plan. The SAVE Repayment Plan is an income-driven repayment plan (IDR) that looks at two main things to calculate your monthly student loan payment: your income and the size of your family.

    The Revised Pay As You Earn (REPAYE) Plan has been replaced by the SAVE Plan, meaning if you are already on the REPAYE Plan, you could also qualify for the benefits of the new SAVE Plan.

    For information on how to apply, what types of loans are eligible, additional benefits, and the application to apply for the plan, visit the Federal Student Aid Website.


    1. See 20 Years of Tuition Growth at National Universities
    2. College Tuition Inflation: Compare The Cost Of College Over Time
    3. Student Loan Debt by Graduation Year [2023]: Total + per Student
    4. Student Loan Debt by Year | BestColleges
    5. How Many Days After Missing a Student Loan Payment Do Your Loans Go into Default?
    6. What Happens If You Miss a Student Loan Payment? - NerdWallet
    7. How Much Monthly Income Should Go to Student Loans? | Money
    8. Student Loan Consolidation | Federal Student Aid
    9. The Biden-Harris Administration's Student Debt Relief Plan Explained | Federal Student Aid
    10. SAVE Repayment Plan Offers Lower Monthly Loan Payments | Federal Student Aid
    11. Prepare for Student Loan Payments to Restart | Federal Student Aid
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