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Obtaining a higher education is a primary way to invest in future earning power, but it comes at a cost. According to Forbes, more than half of graduating students are indebted with student loans at an average of $28,950 owed per person. Just as young adults launch into the world, most are immediately encumbered with monthly payments while simultaneously trying to secure a job, find a place to live, and perhaps even start a family.

So let’s make these disappear as fast as possible!

Student loans are unique in the variety of payment options that are available. Take these steps to accelerate your student loan payoff and set yourself free.

Make a List

List out all of your student loans accompanied by these facts:

• Are they federal or private loans?
• Are they subsidized or unsubsidized?
• Are there any Graduate PLUS loans?
• What are their interest rates?
• What are their minimum required payments?

If you are currently in college or recently graduated, highlight any unsubsidized loans and Graduate PLUS loans. These are important now because interest can accumulate even while you are in school and into the grace period afterward, becoming part of the principal of the loan!

This is the earliest step you can make in eliminating student loans: make interest payments on unsubsidized and Graduate PLUS loans from the moment you take out the loan. Don’t let the interest sneak up on you at the end of your college days. Nip that weed at its roots.

Note that subsidized loans, on the other hand, can only be qualified for through proof of financial need on the FAFSA form. The benefit here is that interest will not start accruing on the loan until after your college years and grace period have been completed.

Next, highlight in another color any private loans. These will not have the same benefits of a federal loan, so we will want to prioritize these especially if cash flow is tight.

Finally, create two identical columns of the list. Rank the first copy from highest to lowest interest rate. Rank the second from lowest to highest outstanding balance.

Set Up Autopay

Hold that list. The next step is to make this payoff process automatic. Federal student loan providers offer a 0.25% interest rate reduction when you set up autopay. Many private lenders also offer a discount in similar fashion.

While this is a baby step, it’s an extremely easy way to be more “aerodynamic” in your student debt payoff. Plus it saves you time and keeps you accountable!

Pay Biweekly

Another easy win is to make this autopayment biweekly. It may not sound like much, but paying once every two weeks instead of once a month will cause you to make the equivalent of one extra monthly payment every year.

If you’re on the standard 10-year payment plan, this could shave a year off of that. But we’re not interested in 10 years; we want to pay this off far faster. Let’s move to the next step.

Get Your Employer to Pay

Until December 31, 2025, employers have been granted the option to help make tax-free student loan payments for their employees up to $5,250. This is done through an educational assistance program which they have the option to set up as part of their benefits package.

Ask your employer if they offer this benefit, or would consider doing so. It’s a great way for employers to attract good, fresh talent to their firm!

Pay Less Tax

Even if you don’t itemize your deductions during tax season, you can still deduct up to $2,500 of interest that you personally paid toward student loans during the year. As of 2024, this deduction starts to phase out if you make more than $75,000 as a single taxpayer or $155,000 as married filing jointly.

And if you get a tax refund, why not apply that lump sum to the loan principal? Maybe you can even wipe out a whole loan with it!

Debt Avalanche

Once you’ve completed these simple wins, return to your list of student loans.

You’ve sorted the first list from highest to lowest interest rate. The second list ranks the lowest to highest outstanding balances.

Are there any loans that you could pay off quickly, within a matter of months, if you were to target it with any extra cash flow?

Whether you start with the smallest loan or the one with the highest interest, the main thing to remember is to apply that freed-up cash flow to the next loan whenever one is paid off, and so on. In other words, your total monthly payment amount should not reduce until every loan has been paid off.

For a deeper dive on this subject, check out Debt Avalanche vs Snowball: 2 Genius Ways to Pay Off Debt Quickly!

Conclusion

Now that we’ve covered the unique aspects of student loans, you are armed with a list of simple wins as well as a strategy for knocking these out as quickly as possible.

A good education is one of the most powerful assets you have in your toolbox. Utilizing these strategies to accelerate your payoff schedule will set you free to set your sights on the flipside: building up your net worth by accumulating assets!