Knowledge Hub / Top 10 Ways to Pay Off Student Loans Faster
Top 10 Ways to Pay Off Student Loans Faster

Top 10 Ways to Pay Off Student Loans Faster

Living with Student Loans Paying for College
ELFI | June 20, 2025
Top 10 Ways to Pay Off Student Loans Faster

Whether you’re starting college in the fall (congratulations!) or are already in the working world, you may be worried about managing student loan debt. While the thought of education debt can be overwhelming, there are strategies you can use to pay off your student loans faster and alleviate some of that stress.

Managing Your Student Loans While You’re Still in School

Student loans may be the last thing on your mind as you handle mid-terms, papers, and late-night study sessions. But, there are things you can do while you’re in school to reduce your student loan debt (and your future self will thank you!), including:

1. Create a Budget

Budgeting as a student is a unique challenge; the bulk of your “income” may come in the form of financial aid and student loans. But, by creating (and sticking) to a budget, you can come up with a plan for how you’ll spend your money and identify areas where you can trim your expenses.

For example, you may find that you can save money by renting your textbooks rather than buying them, or you may be able to downgrade your meal plan if you find that you aren’t eating in the cafeteria as much as you expected.

Tracing your expenses and cutting corners will reduce how much you need to borrow in student loans, so you’ll have a smaller balance by the time you graduate.

2. Maximize Gift Aid

While student loans are a common tool for financing college, there are other financial aid tools. Grants and scholarships are forms of gift aid, meaning they don’t need to be repaid. And, you might be eligible for more gift aid than you thought.

There are thousands of scholarships and grants from companies and on-profit organizations you may be eligible for, and you can qualify for multiple awards and use them to cover a larger portion of your education. Tools like Scholarships.com and FastWeb are excellent ways to find potential opportunities.

3. Make Payments (Even If They’re Small)

If you work while in school — even just a few hours a week — try to put some of your earnings toward your debt. Even small amounts, such as $10 or $20 per month, will cut down on the amount of interest that accrues while you’re in school, helping you save more money.

4. Return Your Student Loan Refund

When you take out a federal or private student loan, the lender usually sends the money directly to the school. Your college applies the loan to your tuition, room and board, and other school fees. If there’s money left over, the college usually credits it to your student account, or sends you a check. You can use that money for your other expenses, such as groceries or textbooks.

If you find that you borrowed more than you needed, you can return or repay that money rather than use it. Less interest will build, and you’ll have a smaller balance upon graduating.

5. Work While In School

Working while in school can make a big difference in your finances. You can use your income for any expenses that pop-up, like supplies you need or the occasional pizza splurge, so you don’t need to rely so heavily on student loans. And, if you’re earning money, you can use some of it to pay down your debt.

Paying Off Your Student Loans Faster After You Graduate

Once you graduate, your loans will enter repayment. To pay off your student loans faster, use these tips:

1. Stick to a Standard Repayment Plan

With federal student loans, the default repayment plan is 10 years with fixed monthly payments. Federal loan borrowers can apply for income-driven repayment (IDR) plans that can reduce your payments, but you’ll be in debt much longer, and more interest can accrue. If possible, stick to a standard repayment plan to minimize how much interest builds and you can become debt-free faster.

2. Pay What You Can During the Grace Period

With many student loans, you have a grace period — a period of six months after you graduate to find a job and get your finances in order before your loan payments begin. If you’re able to find a job, start making payments early. Paying what you can — even if it’s a smaller amount — during the grace period will cut down on interest charges.

3. Ask Your Resources from Employer

Once you start working, ask your human resources department about what benefits are available. According to the Society for Human Resource Management, a larger percentage of employers are offering student loan repayment benefits than ever before, so you may be eligible for help with your loans.

If your employer has a student loan repayment program, they will often match your monthly payments, up to a certain maximum. For example, they may match up to $100 per month. Taking advantage of these programs can help you pay off your loans years ahead of schedule.

4. Pay Extra Toward the Highest-Interest Debt

One of the most effective ways to pay down debt is the debt avalanche method. Using this strategy, you apply any extra money you may have toward the student loan with the highest interest rate until it’s paid in full. Then, you apply that loan’s payment amount and extra cash to the account with the next-highest rate, and continue until you’re 100% debt-free.

By eliminating the highest-interest debt first, you’ll pay off your student loans faster and save more money.

5. Refinance Your Student Loans

Depending on the type of student loan you have, when you took them out, and your credit at the time, you may have loans with higher interest rates. If that’s the case, student loan refinancing can be a particular effective strategy. You could refinance your loans and qualify for a lower rate, cutting down your loan cost and paying off your loans faster.

With ELFI, you can view student loan refinance rates online without affecting your credit score.