10 ways to pay off student loans fast

Student loans can be a significant financial burden, especially for recent grads. More than half of the class of 2022 graduated with education debt, owing an average of $29,400, according to College Board.

The fastest way to pay off your student loans is making extra payments each month. This reduces the overall interest you’ll owe and helps you see your balance decrease faster. While no single method will erase your debt completely, using a combination of tactics can simplify repayment and save you money over the life of your loans.

1. Pay more than the minimum

Paying a little extra toward your student loans each month is a smart way to pay down your balance faster and reduce the amount of interest you pay over time. If you can afford to do so, you could potentially save thousands of dollars.

For example, say you have a $20,000 student loan at 6.00% interest for 10 years. Your normal monthly payment would be $222 — but if you paid an extra $150 per month, you could save over $3,300 in interest and reduce the term of your loan by nearly five years:

2. Make biweekly payments

By making payments every two weeks instead of once a month, you reduce the accrued interest that’s charged to your account. And while you’ll pay the same amount most months, you end up making an extra payment each year.

Let’s go back to our previous example of a $20,000 loan with 6.00% interest and a 10-year term. If you made biweekly payments of $111, you’d pay off your loans a year ahead of schedule and save more than $650 in interest:

Some loan servicers allow you to set up automatic biweekly payments online. If yours doesn’t, you can make them manually. For instance, if your payment of $300 is due on the first of the month, you would pay half of that amount ($150) two weeks before and the other half on the due date.

3. Apply for loan forgiveness

You may be eligible for federal student loan forgiveness programs if your job meets specific criteria. These programs can help you save money by forgiving a portion of your student loan debt.

For example, if you work full-time for a not-for-profit organization or federal, state, local, or tribal government, you may qualify for Public Service Loan Forgiveness (PSLF). This program forgives the remaining balance of eligible federal student loans once you’ve made 120 qualifying payments under an income-driven repayment plan.

Related: Student loan forgiveness programs for teachers

4. Find a repayment assistance program

State governments, federal agencies, and even some private employers offer repayment assistance programs that could help you save money and make it easier to manage your student debt.

These programs are most common in certain professions — teachers, lawyers, veterinarians, nurses, doctors, dentists, and mental health professionals may have an easier time finding options. Often, you must commit to working for several years in a low-income area or underserved community. In exchange, these programs will pay a portion of your student loans annually.

A few popular repayment assistance programs include: 

• Nurse Corps Loan Repayment Program (NCLRP): The NCLRP pays up to 85% of your nursing school debt if you work for two years at a critical shortage facility.
• Attorney Student Loan Repayment Program (ASLRP): The ASLRP program offers up to $6,000 per year in federal student loan repayment to qualified attorneys at the Department of Justice in exchange for three years of service.
• National Health Service Corps Loan Repayment Program (NHSC LRP): The NHSC Loan Repayment Program pays up to $50,000 of loans for health care professionals in eligible disciplines who work in underserved areas for at least two years. 

5. Refinance high-interest debt 

A student loan refinance can reduce your interest rate or lower your monthly payments, helping you save money or otherwise make your debt more affordable.

When you refinance, you take out a new private loan (ideally with a lower rate or more desirable terms) and use that money to pay off your existing education debt. You typically need good-to-excellent credit and consistent income to qualify, but adding a cosigner to your application could help if you aren't eligible on your own.

Related: Should I refinance my student loans?

6. Look for lender discounts

Some lenders offer additional incentives that can help you reduce your outstanding balance. While these discounts vary from lender to lender, common options include:

• Graduation rewards, which can reduce the balance of your loans when you complete your degree
• Loyalty discounts, which reduce your interest rate if you or your cosigner have another account with the lender
• Referral bonuses, which typically offer cash back if a friend uses your link to successfully take out a new loan

Contact your loan servicer to learn about available discounts that could help you pay off student loans faster.

7. Sign up for automatic payments

Many lenders will lower your interest rate by 0.25 percentage points for enrolling in automatic payments. While that may sound small, it can add up over the years you’re in repayment.

You can typically enroll online, and can often pick the date your payment will be processed. Note that autopay could cost you late fees or insufficient funds fees if there’s not enough money in your bank account to cover your loan payment. (Your bank might also impose an overdraft fee.) Only sign up for automatic payments if you can keep your bank account comfortably padded.

8. Use financial windfalls 

If you unexpectedly find yourself with extra cash, put it toward your student loan. You might have more windfalls than you realize — consider applying the following to your debt:

• Tax refunds
• Work bonuses
• Proceeds from selling used items
• Investment gains
• Inheritances
• Insurance or lawsuit settlements
• Contest winnings

This can help you pay down the principal balance faster, reducing the interest you owe and ultimately helping you pay off your student loans faster.

9. Reduce your expenses 

While it sounds simple, following a budget is one of the most effective strategies to pay off student loans quickly. It can help you limit expenses, prioritize payments, and set goals for paying off your debt.

While every little bit counts when paying off debt, focus on cutting costs that will make the biggest difference in your budget, allowing you to put more of your money toward your loan balance.

For example, nearly half of Americans spend 30% or more of their budget on housing, according to Pew Research Center. Reducing your housing costs by living with parents, getting a roommate, or choosing a less expensive neighborhood could make a much larger impact on your budget than, say, giving up a monthly subscription.

10. Boost your income

Sometimes, there’s only so much you can cut from your budget. If you can’t reduce your spending, try increasing your income instead. Ask for a raise at work, apply for a higher-paying job, or start a side hustle to bring in extra cash. Even small amounts of additional money can add up over time, making it easier to pay off student loans.

Is it a good idea to pay off student loans early?

Paying off student loans early can free up your budget, allowing you to focus on other financial priorities, but it’s important to consider your entire financial situation first. 

Pros 

• You’ll pay less interest: An early payoff means you’ll reduce the total amount of interest owed over the life of your loan. 
• You can reduce your debt-to-income ratio (DTI): A lower DTI can improve your credit score and make you more likely to get approved for future loans, such as mortgages. 
• You’ll free up more income: Money you were putting toward monthly student loan payments can be redirected toward saving for retirement or putting a down payment on a house. 

Cons

• You might have less funds for emergencies: Allocating extra money to pay off student loans might leave you with less cash for unexpected emergencies and expenses. 
• You may divert funds from higher-priority loans: If you have other debt with higher interest rates, it may be a good idea to address those first before focusing on student loans. 
• You’ll lose out on the student loan interest tax deduction: You can deduct up to $2,500 of paid interest each year from your taxable income, but paying off loans early means you’ll lose access to this benefit.