Get out of student debt with these 7 secrets

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student debt

The cost of pursuing a degree has also grown drastically over time, with students today paying 213% more than what their parents did back in the 1980s. Resultantly, students have increasingly become dependent on loans to finance their studies, to the point where there is now around $1.5 trillion of total student debt in the United States.

Each graduate owes an average of $37,172 of debt as of 2018, making it much more difficult to become truly financially independent. With the cost of higher studies extending far beyond simple tuition fees, including dormitory and living expenses, textbooks, and specialized materials to consider, it may come as no surprise that around 2 million graduates end up owing more than $100,000.

Here are some tips to help you fast-track your way out of student debt:

1. Don’t rush to ‘upgrade’

You did it—you’ve graduated and landed your first job! Congratulations for finally getting yourself out into the ‘real world.’ But that doesn’t necessarily mean that you have to stop living like a student.

Wait, what? Fresh graduates tend to want to make it on their own quickly, but you might not necessarily want to ‘upgrade’ your lifestyle too fast if you want to be able to save more cash and eventually pay off student loans sooner. 

While we don’t suggest that you go back to living on an instant ramen-based diet, try to remember to prioritize essentials and invest in items that will bring longer-term benefits. As with the modest-but-functional scientific calculator that never once failed you throughout the years, you don’t necessarily need to replace your smartphone every year. And that latest model might not be spectacularly different from your current phone, anyway.

As for rent, the biggest regular expense that people have, you might want to consider saving a few hundred dollars each month by forgoing that brand-new downtown apartment to seek a more affordable place or move back in with your parents. This can give you the time to figure out and grow comfortable with your finances. Your mother might even be glad to have you back at home… for now.

2. Now we’re here… budgeting

If you’re one of the 40% of adults who don’t actively keep a budget, then the time to start is NOW. Budgets don’t have be complicated labyrinths of numbers—they’re simply meant for you to keep better track of where your money is going.

A trick we’ve found to be highly effective, especially when actively trying to work down student debt, is taking a ‘bottom-up’ approach to budgeting. This means immediately setting aside a portion of your monthly budget toward savings and debt repayments, and then working with the remainder for your day-to-day expenses. (ex. $100 salary – $10 for debts – $15 for savings = $75 for rent, food, etc.)

Simply put, if you start with the assumption that you are paying X amount toward your debt every month, then you begin to develop the habit of making regular payments (which will be great for your credit rating down the line), nudging yourself toward making smarter spending choices by working with a slightly-smaller monthly budget.

3. Paying extra on your minimum dues

Paying off student debt can sometimes be a 20-year commitment. And as with any bad relationship, it’s in your best interest to get out of it as quickly as possible, which may mean making bigger payments (but only where it wouldn’t hurt to do so).

Whenever circumstances allow, try to pay more than the minimum amount due on your debts. A difference of 5-20 dollars made by simply rounding up to a higher amount each month can go a long way in helping you pay off your loans a few months, or even years, earlier than expected. This can potentially save you thousands in interest payments.

Now, there are two common ways to go about this if you find yourself trying to balance multiple student loans at once:

  • Prioritize loans that carry the highest interest rates, as higher-interest loans are usually more expensive and getting them out of the way earlier leaves you with smaller, more manageable loans to deal with
  • Prioritize loans with the lowest principal amounts first. This method works under the more modern assumption that quick ‘wins’ with smaller loans would give you the confidence and momentum to tackle progressively larger loans.

4. One debt to rule them all

The average federal student loan rate stands at 4.5% for undergraduates and 6.3% for graduate studies in USA. These interest rates may not mean much at the start, but steep rates can cause headaches when you realize that it adds up quick down the line. And even if you do feel like these are manageable, it’s always a good idea to shop around among private lenders, some of whom would offer refinancing options at considerably lower interest rates.

However, be aware that while private lenders may offer attractive consolidation packages that allow you to focus on one larger (and less expensive) loan instead of several smaller loans, they are often not as flexible as federal financing.

Also, some states actually offer debt forgiveness to qualified graduates, but make sure to do your research, as these programs often only cover people in public service, who have especially good student debt repayment histories.

5. To swipe, or not to swipe?

People with steady incomes and bank accounts are the prime targets of credit card companies, and having an available credit line is undoubtedly practical in cash-tight situations. However, studies show that consumers can spend 100% more on credit than with cash.

So, while your credit card company may offer attractive ‘rewards,’ be very careful to avoid adding another battlefront to your war against debt. Remember, you’re not saving 20% on that credit card deal if you’re actually still spending 80%.

The easiest way to prevent this from happening is by paying for everyday transactions with cash or your debit card and strictly reserving your credit card for emergencies. This may take some getting used to, but by directly spending the cash that you already have in your bank accounts, you maintain a stronger psychological connection with your money.

This, in turn, makes it easier to not only monitor your expenses, but also save yourself from yet another monthly bill (with so many fees!) to keep track of.

6. Earn and save more while having fun

Nooope, we’re not talking about taking on an extra job or necessarily going back to your part-time student gig waiting tables at that café down the street. We’re talking more about exploring options that 1) don’t take away from your precious ‘me-time’ and 2) don’t make you feel like you’re working a second job.

Think of how modern technology and lifestyles have allowed millions of people to monetize their hobbies, free time, or other resources by driving for Uber, putting up spare rooms on Airbnb, or walking their neighbors’ dogs every weekend, for example.

The payout might likely be modest, but could still contribute substantially to your savings, if not just your direct spending budget. This has the not-insignificant bonus of knowing you’re also helping other people go about their own busy lives. 

And hey, at the very least, you’d actually get paid to hang out with cute little doggos!


Yes, this is our final piece of advice. As we mentioned at the start of this article, we get you. Dealing with student debt can involve ridiculous (even scary) timescales and monetary amounts, but it’s important to understand that you are always in control of the situation.

Getting out of student debt is a process, and not a race. Different solutions will work for different people, and your mission is simply to mix the right cocktail of solutions to fit your needs and lifestyle.

So, if you’re struggling to make this month’s payment, then try find ways to make up for it next month (or the next). Remember that you took out these loans to improve your life, and so they shouldn’t take over how you live it.

Don’t be afraid to splash (or at least sprinkle) some cash to take care of yourself by getting enough exercise and eating right, or to simply enjoy by engaging in hobbies and going out with family and friends once in a while.

Speaking of friends, you’re not alone in this fight. Reach out to other people to see how they’ve been dealing with their own student loans and exchange advice. And with almost any type of content being accessible through the internet these days, debt management resources (like this article!) are always available for you to consult in order to find ideas to try out.

There may not be a magic perfect solution, but approaching its challenges with the right attitude is already a great start. You’ve got this!

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