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How to Pay Off Student Loan Debt

Samantha Rose
Samantha Rose is a personal finance writer covering financial literacy for OppU. Her work focuses on providing hands-on resources for high school and college-age students in addition to their parents and educators.
Read time: 11 min
Updated on January 3, 2022
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Rely on expert tips and our step-by-step repayment worksheets to tackle student loan debt.

Student loan debt is continuously on the rise, topping US$1.6 trillion in 2019. Nearly 43 million American adults carry a federal student loan, with the average 2016 grad holding $37,172 in student loan debt.

Sound daunting? For many grads with student loan debt, it is—but it doesn’t have to be.

A debt-free timeline is the best motivator to live uncomfortably for a brief period in order to reach true financial freedom. Skimp on a budget, pick up a side hustle, and put some serious effort into tackling student loans now in order to pay them off as quickly as possible. With the help of our two repayment strategy worksheets, anyone can get organized, structure their monthly payments, and take advantage of compounding motivation.

Ready to get started?  Here are eight steps to put you on the path to financial freedom.

Step No. 1: Organize your debt

The first step to paying down student loans is organizing them. Break out your computer (or use a pen and paper) and write down the following:

Type of loan (federal or private)

Federal loans are provided by the government. Private loans are provided by private companies and are typically more expensive.


These are companies that collect payments on student loans. They’re responsible for processing changes in repayment plans, deferments, forbearances, and other services.

Interest rate (fixed or variable)

A student loan can have either a fixed rate (the same interest rate for the duration of a loan) or a variable rate (an interest rate that changes over time).

Term length

This is the duration of a loan until the principal and accrued interest are expected to be repaid.

Total due (including interest)

This equates the entire amount of a loan, taking into account the added interest rate, fees, and other costs.

Payment date

This is the agreed-upon monthly date that a loan payment is due. Oftentimes this can be renegotiated between a borrower and servicer if there is a preferred date.

Minimum payment

This is the minimum amount due on a loan each month to remain in good standing. Consider different repayment types, such as an income-driven repayment (IDR).

Grace period

A grace period is a set period of time after graduation, leaving school, or dropping below half-time enrollment that a borrower has before beginning repayment of student loans.

Tips from the pros: Devon Horace, founder of Horace Consulting, LLC

“Write out all your student loans. Whether it’s in a notebook or excel sheet, you have to track and list everything you owe.”

“To constantly remind yourself of your debt, make sure it’s visible and or easy to access. If you spend a lot of time in the bathroom, put it on the sink mirror. If you like to Netflix and chill, put it next to the TV. And if you’re a foodie, on the fridge is always a great place to hang it up.”

Step No. 2: Know the pros and cons of refinancing or consolidating

Consolidation is the process of combining several small loans into one large loan with a single payment. Often the larger loan has a lower interest rate than the average of all of the smaller ones.

Student loan refinancing is the process of taking out an entirely new loan (ideally a better one) to pay off an outstanding loan or loans. Refinancing can also help borrowers save money on interest with a lower interest rate or reduced payment amount.

Before consolidating or refinancing, consider the terms of the agreement carefully. Also, research possible consequences—some borrowers can lose federal borrower benefits, including a grace period, loan forgiveness, or loan protections.

Tips from the pros: Jory McEachern, Director of Operations at Docupop

“Our top tip? Consolidate your student loans into a repayment plan that you can actually afford! Are you breaking the bank in a high standard repayment plan each month? If your student debt is basically competing with your rent for the most expensive bill in the house, you might want to consider a consolidation and income-dependent repayment plan. The U.S. Department of Education (ED) offers tons of great programs to help borrowers just like you drastically lower their monthly payments for those who qualify.

Enrolling into an IDR could be helpful as it may lead to lower payments. Depending on the plan, some qualified borrowers could drop their payments down to as little as $0 per month.

When you consolidate your student loans, you’re issued a direct consolidation loan with a fixed interest rate. Which then gives you the option to enroll into one of the ED’s repayment plans.

If you’re still having trouble making ends meet each month, look at getting into a better repayment plan to fit your current needs and budget. There are tons of options and government programs available to help grads possibly lower, reduce, or even forgive some of your debt if you qualify.”

Step No. 3: Meet the minimum payment and determine an extra payment amount

At a minimum, borrowers should make the minimum required payments on their loans. To accelerate payback, they should make extra payments as they’re able.

The best way to free up money to put toward extra payments is by prioritizing needs. Start a budget based on needs and wants, then slash unnecessary costs. Additional money that can go toward paying off student loans will have a huge effect on knocking down the principal balance and minimizing interest in the long run.

Receive a big bonus or holiday check? Great. Put that to work on your student loans. For bigger one-time payments, make sure that the student loan servicer is notified beforehand so that the money goes toward the principal balance.

Student loan calculators provide a useful tool to estimate the impacts of a varying extra payment amount on one’s interest owed and overall repayment timeline.

Tips from the pros: Monica Lam, blogger at Lucky Mojito

“Plug in your student loan interest rate and numbers into a loan repayment calculator and see how long it'll take you to pay off your debt if you just pay the minimum each month. Seeing an actual dollar amount of how much interest you'll end up paying over the course of your loan has the ability to light a fire under your butt when you see all those zeroes. Next, try adjusting the amount you pay slightly and see how many years it takes off. Keep increasing that number until you feel slightly uncomfortable. Debt shouldn't feel comfortable, which is why you need to push yourself to get out as fast as possible.”

Step No. 4: Choose between the debt avalanche or debt snowball repayment method

There are two tried-and-true methods for paying off student debt: the debt snowball method, which prioritizes the loan with the lowest balance, and the debt avalanche method, which targets the loan with the highest interest. Our worksheets below will guide you through each, and our expert advice will give you tips for tackling debt quickly and easily.

The avalanche method is the most efficient way to get out of debt because it targets toxic high-interest debt first and reduces the total cost of debt by eliminating more expensive loans upfront. Alternatively, the snowball method is the best way to stay motivated by targeting the smallest debt balance and building on small victories.

Tips from the pros: Monica Lam, blogger at Lucky Mojito

“When I graduated college, I owed about $37,000 in student loans to three different loan providers. I used both the avalanche and the snowball methods to pay them off. I had a loan that was for a small amount, so I quickly paid that off. Having wins, big or small, is a huge motivator. From there I had 2 more loans with similar balances, so I chose to target the one with the higher interest rate next.”

How to use the avalanche method

First, order each student loan from the highest interest rate to the lowest. Total the minimum payment amounts owed. Don’t know your minimum payment? Estimate it with a calculator. You’ll need to know the balance, interest rate, and number of years to repay. Now, determine how much extra to pay beyond the minimum amount due each month, and write it down in the “Avalanche Payment” section of the worksheet.

For example, let’s say you have three loans–ordered from 11%, 3%, and 2%. Pay all of their minimum payments ($29, $39, and $18 respectively), but target the highest interest rate with an extra $100 per month. Once it’s paid off, roll the $29 minimum into the next avalanche payment ($100 + $29 = $129). Don’t forget to continue making your remaining minimum payments in addition to the avalanche amount. That means your new monthly payment on the second loan would be $168 ($129 + $39) while you continue to make minimum payments on the third loan. Continue this method until all loans are paid.


How to use the Snowball Method

First, organize student loans from the smallest balance to largest balance. Determine how much extra to pay beyond the minimum monthly payment and plan to put that money toward the smallest student loan in the “Snowball Payment” column.

Using the same example as before, let’s say you have three loans. This time, order them according to balance—$1,500, $2,000, and $4,000. Pay all of their minimum payments ($29, $18, and $39 respectively), but target the lowest balance with an extra $100. Once the $1,500 loan is paid off, roll its $29 minimum into the next snowball payment ($100 + $29) and apply it to the $2,000 balance. Again, don’t forget to continue making your remaining minimum payments in addition to the snowball amount.

Similar to the avalanche method, continue to pay off loans and roll the minimum and extra payments into the second-smallest debt, and so on until every student loan is paid off.

Stay on track—it’s easy to get discouraged when looking at several small debts, but remember that little debts can be paid off quickly with targeted payments. Empowering, right? Progress will happen immediately and motivation to keep going will only build. That’s the power of the snowball method.


Step No. 5: Automate payments

Once everything is in place, automating the repayment process reduces the chance of missing a payment. Also, many loan servicers offer a reduction in interest rates by signing up for automatic payments.

To automate payments, enroll in a plan with your loan provider. Expect a withdrawal on the date of the plan and budget accordingly.

Tips from the pros: Danielle Desir, founder of The Thought Card

“To help pay off your student loans faster, I recommend finding out if your lender reduces your interest rate if you sign up for autopay. When I was paying off $63,000 of student loan debt, by signing up for autopay, my lender reduced my interest rate by 0.25%.”

Step No. 6: Stay motivated

Focus on paying off one loan at a time. It’s easy to get overwhelmed, but small wins and milestones will make things feel more manageable—and the payments will add up quickly.

So get hyper-focused on eliminating each loan one at a time. (This means meeting minimum payments on all the student loans—but making additional payments on one particular loan.) Celebrate every win, such as each time you knock out another 5% of the total amount you owe.

Use our motivational chart to keep track of progress toward the larger goal: financial freedom!


Tips from the pros: Devon Horace, founder of Horace Consulting, LLC

“When looking at your debt as a whole, you may feel defeated. Take each loan and create small victories/goals.

Many loans are broken down into numbered loans (ex. Loan 1, Loan 3, Loan 8 and so on), so tackle each loan one at a time. Once you pay off one loan, you become more motivated and determined to pay off the others. It’s a psychological Jedi mind trick on yourself.”

Bottom Line

Paying off student loans won’t happen overnight, but it also shouldn’t feel like something that might take a million years. Take stock of your debt, choose a repayment method, and stay motivated. You’ll be debt-free in no time.

Article contributors

Danielle Desir is a travel finance strategist, podcaster, writer, speaker, and the founder of The Thought Card, an award-winning travel finance blog and podcast empowering people to make informed financial decisions - travel more, pay off debt, and build wealth. Desir paid off $63,000 of student loan debt in 4 years and purchased her first home at the age of 27. She has also traveled to 26 countries and three continents. She strongly believes in not letting your financial responsibilities hold you back from pursuing your dreams and traveling the world.

Devon Horace is an investor, personal finance, and business strategist, and founder of Horace Consulting, LLC. From $47,238.38 in debt to millionaire, Horace now helps other young professionals achieve their personal finance and business goals through Horace Consulting, LLC. His goal is to increase financial and business literacy in his community.

Monica Lam is a personal finance blogger at Lucky Mojito. She and her family paid off more than $33k in credit card debt and built a net worth of 6 figures and growing. Lam shares her best money making and saving tips so others can do the same.

Gina Sansevero is the training manager for Docupop, which helps student loan borrowers consolidate their debt into the best repayment plan possible to fit their needs. Docupop’s technology and proven process guarantees document accuracy to minimize stress and maximum potential benefits.

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