Updated on 07.15.16

15 Ways to Deal with Student Loan Debt

Dealing with student loan debt is tough. You’re probably no stranger to the student loan crisis we’re facing with $1.2 trillion and growing in debt.

The average student will graduate with a whopping $40,000 in student loans, but for those who pursued graduate or higher degrees, switched majors, or went back to school, that number can be significantly larger. In fact, according to the Federal Reserve Board Survey of Consumer Finances, almost 19 percent of borrowers owe $50,000 and above (with 5.6 percent owing over $100,000).

For some, student loans were a necessary burden throughout college that lead to a better paying job in the field of their choice. To many, student loans may have felt like free money in a sense or just something to deal with after graduation. Whatever the case may be, student loan debt is causing graduates to start out drowning in debt and stress from these loans.

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Eliminating Student Loan Debt

Before you throw in the towel, know that you can manage your student loans in a smarter way, pay them off faster and cheaper, and live a debt-free life. Here are some ways to deal with student loan debt:

Take advantage of your grace period.

Depending on your loan type, your lender may have granted you a grace period after you graduate (or stop attending the college) where you don’t need to make any payments towards your loan. Avoid the tempting option of simply ignoring your debt during this period. If you still have the luxury of a grace period, now is the time to fully understand your loans, make a game plan and if possible, start making those payments you’d normally be making anyways. For example, if your loan payment is going to be $250 per month, take that $1500 at the end of six months and apply it towards your loan. Not only will it reduce your loan, but you’ll already be in the habit of putting that $250 aside.

Understand your loans.

Even if your grace period is long gone, the first step in dealing with your student loans is to really understand what you’re dealing with. It’s easy to turn your brain off, make your minimum payment (if you can even afford it), and go on. But to actually make an impact, you need to know how your loan works. Here’s how to understand your student loan debt:

Step 1: Find your loans.

It would seem crazy to someone that never had a student loan, but yes, it is very possible and extremely common to not be aware of all your loans after graduation. Since you can’t go back in time to tell 18-year-old you to keep track of every detail of each loan you take out, you’ll have to put in the leg work now. For starters, check the National Student Loan Data System to find any federal loans. To check what you owe to private lenders, contact them directly. Another option is to order a free copy of your credit report to see who your lender is.

Step 2: Understand your payment options.

Some loans offer the chance to switch to a payment plan based on what you’re earning. If you’re unable to make your payments at all, you can apply for a temporary deferment.

Step 3: Familiarize yourself with each loan’s details.

If you’re dealing with multiple loans, which many are, then try to first tackle the loan that you’re paying the most interest on every month. Besides the interest rate of each loan, understand what the minimum payment will be and which loans would qualify for things such as a deferment, loan forgiveness, and a better payment plan.

Choose your best payment plan.

As I mentioned above, you could have the option of choosing a better payment plan, such as an Income-Based Repayment or Pay-As-You-Earn. These options give you a more manageable minimum monthly payment based on what your current income is. You may also wish to explore student loan consolidation if you are having difficulty keeping track of multiple loans at once.

Continue to live a “college lifestyle.”

I get it. You put in your time of ramen noodles and cheap, used furniture. You worked your butt off in college, you’re finally making money (hopefully) working hard at a job, and you deserve to start living better, right? Wrong. Face the reality of your debt situation, and work towards paying off these loans. You probably lived simple in college so why stop now?

  • Continue to opt for affordable rent with, if possible, a roommate to share expenses.
  • Cut costs whenever possible, and find ways to save money that work for you.
  • Clip coupons, shop sales, and cook at home instead of going out to eat.
  • Skip the concert tickets, pricey dinners, and expensive bar tabs for plenty of free things to do such as pot lucks with friends, free museums, and outdoor activities.
  • Limit your driving with public transportation, carpooling, planning efficient routes, and walking and biking whenever you can.

Stick to a budget.

Once you know what your payment is going to be, create your monthly budget, and stick to it. When you’re making your budget, try to trim anything you can to put that money towards your debt. Find ways to save money so you can budget more towards your debt repayment.

Make a smart debt repayment plan.

For many, student loans aren’t the only debt they accrued while in college. According to Debt.org, the average college student has $3,200 in credit card debt on top of their loans, and that amount may be modest. Don’t ignore your credit card debt while dealing with your student loans. Once you lay out what you’re paying in interest every month, you can make the best strategy for dealing with your debt.

Earn more money.

I know that is easier said than done, but it is the best way to put a dent in your student loans. Here are some ways to increase your income:

  • If you’re currently employed, try to negotiate a larger salary or promotion. Can you take on more responsibilities at your job to earn more?
  • Pursue opportunities for overtime or extra shifts.
  • Apply for jobs with higher paying salaries.
  • You can start your own business based off your interests.
  • Get a part-time job. If possible, opt for one near your home or work so it doesn’t become a huge hassle.
  • Turn your passion into additional income with blogging, teaching, or freelance writing.
  • Sell your unwanted belongings at second hand or consignment shops, online, or at a yard sale.
  • Offer your services. Play an instrument? Start giving lessons. Know a subject very well? Let people know you’re ready to tutor. If you’re a pro at grammar, writing style, and spelling, you can offer editing services.

Deduct your student loan interest.

Once tax season rolls around, don’t forget to deduct your student loan interest. You can reduce your taxable income by up to $2,500 on any interest you’ve paid for that tax year. Your lender should send you this information, but you can also request it or get it online. It may not make a huge difference, but any little bit helps.

Explore loan forgiveness.

The main goal of that ridiculously priced degree is a job, right? So why not get a job that helps reduce your debt while still earning an income? Depending on your industry, you can opt to search for something with a loan forgiveness program. Public service careers may offer student loan forgiveness.

Many times, loan forgiveness is offered when a certain area, such as a low-income area or rural community, is lacking a specific profession. Some of these jobs include teacher, law enforcement, doctors, lawyers, dentists, social workers, firefighters, speech pathologists, nurses, psychiatrists, and more. Keep in mind many of these opportunities come with many requirements and stipulations. You may have to sign a contract to work for a designated amount of time or live in a certain area. If you don’t complete your contract, you may be asked to return any student loan assistance you have received or not get that assistance at all.


As if paying down your student loans isn’t great enough, you can also help people while doing it. Organizations such as AmeriCorps, VISTA (Volunteers In Service To America), Peace Corps, Teach for America, and National Health Service Corps. all offer some type of student loan forgiveness or reimbursements for your dedicated service. New to the volunteer scene are Zerobound and SponsorChange. Both these organizations connect organizations in need of volunteers in exchange for money towards your student loan debts. Just like careers that offer loan forgiveness, there’s plenty of stipulations to earn this. Depending the program, only certain loans may qualify. As with any loan forgiveness, be sure to fully understand what’s required of you.


In an effort to get young, educated professionals to come, many destinations offer student loan assistance if you move there. Kansas; Detroit, Michigan; Niagara Falls, New York; and Saskatchewan, Canada are all places that are willing to give you some type of reimbursement for moving there. Just like with the other types of student loan forgiveness options, there are strings attached. You might have to live in a certain community or neighborhood, work at specific company, or commit to staying there for a designated amount of time.

If you don’t want to move to these specific areas, moving can actually help you tackle your student loans in other ways, too. Moving closer to your job lowers commuting costs. Consider downgrading or moving to an apartment with a cheaper rent. If you’re not currently tied down to a job, you can move to an area with lower costs of living. If you can move to a more walkable location, you may be able to sell your car. Between a car payment, insurance, maintenance, gas, parking, tolls, registration fees, and other costs, think about how much you could save by not owning a car. These can all result in you putting that extra money towards your student loan debt.

Sign up for auto-debit.

Enrolling in automatic payments can lower your interest rate, depending your lender. While it may only be small amount, that amount can really add up over time. For example, Sallie Mae offers a .25 percent reduction of a loan’s interest if you qualify. But even if you won’t get a break, auto-debit can eliminate the possibility of late fees and missed payments, which increases what you owe.

Pay your interest during deferment.

Depending your loan type, you may opt for a deferment if you’re in school, unemployed, experiencing an economic hardship, an active military member, or another approved situation. If that’s the case, opt to continue making interest payments on your loan to help alleviate the burden once your deferment ends.

Enroll in Upromise.

This is a simple, free way to put a small amount of money towards your loans. In fact, its one of our Best Credit Cards for Students. Create an account, plug in all of your credit cards and loyalty cards, and earn cash back on certain products or at specific stores. If you are buying anything online, click through the link on the website, and you can earn 5 percent cash back. Since you’re dealing with your student loans and won’t be doing much shopping, you can also share the link with your family and friends and let them earn money for you. You can opt to link this directly to any Sallie Mae student loan you have, or you can get a check back.

Don’t tack on more big debts right away.

That much-sought after next phase after graduation could be expensive. You’re next goals may be marriage, purchasing a car, or buying a home. These can be great options if that’s what you want and can afford. However, if you’re already dealing with overwhelming student loans, going deeper into debt for these isn’t the best move. The average wedding cost is $30,000 and much higher if you live in a large city or have expensive taste. Opt for a less traditional, cheaper wedding or wait until you can afford the wedding of your dreams.￿

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