7 best ways to get out of student loan debt

Student loan debt makes up a large chunk of Americans’ total debt burden — it’s second only to mortgage debt. More than 44 million Americans carry student loan debt, owing a total of more than $1.5 trillion, according to U.S. Chamber of Commerce data.

While getting out of student loan debt can be challenging, you do have options for paying down your student loans to get out of debt sooner.

• 7 best ways to get out of student loan debt
• Look into student loan forgiveness programs
• Apply for an income-driven repayment plan
• Research federal loan cancellation or discharge
• Ask your employer for repayment help
• Consolidate your federal loans
• Refinance your student loans
• Take on a side hustle

7 best ways to get out of student loan debt

While you can’t eliminate student loan debt quickly, you might be able to reduce your payments or shorten your loan term so you can pay off your student loans faster. These seven strategies can help you get a handle on your student loan debt — the right one for you depends on the type of loan you have, your income, and your financial goals.

1. Look into student loan forgiveness programs

If you have a federal student loan, you might be eligible for student loan forgiveness, where you’d no longer need to repay some or all of your loan. (Note that if you don’t qualify for a student loan forgiveness program, you’re still responsible for paying back the loan.) Here are a few common types of federal student loan forgiveness programs.

Public Service Loan Forgiveness (PSLF)

If you work full-time for a U.S. federal, state, local, or tribal government or not-for-profit organization, you might qualify for the Public Service Loan Forgiveness Program (PSLF), which forgives your remaining loan balance. To qualify, you need to have made 120 qualifying monthly payments while working for a qualifying employer. Note that if you work part-time for more than one qualifying employer and your weekly work hours total 30 or more, you can be considered for the program.

Military student loan forgiveness

If you’re currently in or have served in the military, you could qualify for loan forgiveness under PSLF. If you served in a location where there was hostile fire or imminent danger, you might qualify to have half of your loan canceled if your service ended before Aug. 14, 2008. If you served on or after that date, you might be able to have your entire loan forgiven.

Teacher Loan Forgiveness Program

If you’ve taught full-time for five consecutive years in a low-income school or educational service agency, you might get either $17,500 or $5,000 forgiven from your federal student loan. To get any forgiveness, you need to have at least a bachelor’s degree, be a state-certified teacher, and not have your certification or licensure requirements waived.

To get $17,500 forgiven, you need to be either a full-time math or science teacher at the secondary level or a special education teacher at the elementary or secondary level. All other qualifying teachers could receive $5,000 in loan forgiveness.

2. Apply for an income-driven repayment plan

If your student loan payments are taking a large percentage of your income, you might qualify for an income-driven repayment (IDR) plan, which is a reduced payment designed to be affordable based on your income and family size. The Department of Education offers four types of IDR plans.

Income-Based Repayment Plan (IBR)

The IBR Plan consists of monthly payments that are typically equal to 10% or 15% of your discretionary income (but never more than what you’d pay under a 10-year Standard Repayment Plan). New borrowers (on or after July 1, 2014) pay 10%, and all other borrowers (before July 1, 2014) pay 15%.

Repayment programs are spread out over 20 years for undergraduate loans and 25 years for graduate or professional study loans.

Income-Contingent Repayment Plan (ICR)

With an ICR Plan, you’ll pay the lesser of two options: either 20% of your discretionary income or your fixed payment over the course of 12 years that’s been adjusted to your income. The plan lasts 25 years and is available to any borrower with an eligible federal student loan.

Pay As You Earn Repayment Plan (PAYE)

The PAYE Plan generally consists of payments that are 10% of your discretionary income (but never more than you’d pay under a 10-year Standard Repayment Plan). The repayment term is 20 years.

Revised Pay As You Earn Repayment Plan (REPAYE)

With the REPAYE Plan, you’ll generally pay 10% of your discretionary income. The repayment term is 20 years for undergraduate loans and 25 years for graduate or professional study loans. This plan is available to any borrower with an eligible federal student loan.

3. Research federal loan cancellation or discharge

If you have a federal student loan, you might qualify for a cancellation or discharge, both of which are similar to loan forgiveness.

• Federal Perkins Loan cancellation and discharge — If you have a Perkins Loan, a low-interest federal student loan for students with extreme financial need, you might qualify for a total or partial cancellation of your loan if you teach in a school that serves low-income students, are a special education teacher, or if you teach math, science, foreign language, or bilingual education. Other qualified professions include firefighters, law enforcement officers, librarians, nurses, public defenders, speech pathologists, and volunteers with the AmeriCorps VISTA or Peace Corps. Perkins Loan discharges, where you don’t need to pay back the loan, are available under certain conditions, such as bankruptcy, death, school closure, veteran disability, spouse of a 9/11 victim, and total and permanent disability.
• Closed school discharge — You might qualify for a complete discharge of your loan if your school closes during your enrollment.
• Disability discharge — You might qualify for a total discharge of your loan if you’re totally and permanently disabled.
• False certification discharge — You might qualify for a discharge of your loan if your school certified your eligibility requirements and you didn’t meet them, if the school certified your eligibility but you had a status that legally disqualified you, or if the school signed your name on the application or endorsed a check for you.

4. Ask your employer for repayment help

Some companies offer student loan repayment assistance as a work benefit. The employer will typically make part or all your loan payments either to you or your lender.

This benefit has become increasingly popular since the Consolidated Appropriations Act (CAA) was signed into law in December 2020. It allows employers to offer student loan repayment as a tax-free benefit to employees and is scheduled to last through Dec. 31, 2025. Research which companies offer this, or consider asking about it during your interview.

5. Consolidate your federal loans

If you’re a federal student loan holder with multiple student loans, you can consolidate your federal student loans with a Direct Consolidation Loan at no cost. Combining multiple loans into a single Direct Consolidation Loan won’t necessarily give you a lower interest rate — your new rate will be a weighted average of all your existing loans. But you’ll have an easier time keeping track of your student loan debt, particularly if your loans are with different loan servicers.

Note that if you’ve been making payments under an IDR plan, consolidating your loans into a Direct Consolidation Loan resets your payment clock. You’ll typically lose credit for the months you’ve already been paying on your loans. But because of the pandemic, you won’t lose credit for those payments for a limited time.

6. Refinance your student loans

If you can get better terms on your loan by refinancing, you might want to consider the option to refinance student loans. Common benefits of refinancing a loan are getting a lower interest rate or a longer repayment period that would lower the monthly payment, freeing up some money for daily living expenses.

You can refinance federal student loans, private student loans, or a combination of both with a private lender. But if you refinance a federal loan into a private loan, keep in mind that you’ll lose the benefits and protections that come with federal loans, such as PSLF and income-driven repayment plans.

7. Take on a side hustle

Another option to pay your student loan back sooner is to double up on your payments. Consider taking on a side hustle to bring in some extra income, such as delivering groceries or food, doing online tutoring, or house or pet sitting.