3 Strategies to Swiftly Strike Student Loans - Smart Money Seed


3 Strategies to Swiftly Strike Student Loans

Let's flash back in time for a moment to May 10, 2015. Happy birthday, Amanda! Oh, and also, happy graduation day to me! I was extremely fortunate to have a great job lined up with Marathon and a low amount of student debt to worry about. My $11k balance meant that I would have to start making payments of about $200 per month in November.

Making this payment was not a huge deal for me, but I understand that not everyone is that fortunate. Some students might graduate with mountains of debt, some might graduate without a job lined up, or worse, both.

According to Forbes, 44.2 million Americans have student loan debt totaling $1.31 trillion, and the average student who graduated in 2016 had $37,172 in student loans. A study from Time states that those same graduates received starting salaries of $50,556. That means the average grad is taking home about $2,800 each month assuming 10% retirement savings and paying about $400 in student loans -- about 15% of take home income -- for ten years!

That doesn't sound like a whole lot of fun to me. So. . . what are you supposed to do about it? Believe it or not, you do have some options.

Option 1: Make sacrifices, cut spending, and pay that shit off as soon as possible!

Many of you probably know by now this is the strategy I used. I lived with my parents (which really wasn't a sacrifice at all although the 45 minute commute wasn't fun) for almost two years after graduating college and kicked my debt to the curb about a year and a half  after graduating and buying a new car and gave myself a $600 monthly raise-- $200 of which was going to student loan payments.

I understand this option isn't feasible for everyone. If you decide to employ this strategy, don't do it half assed. It will only be a life changing strategy if you're all in on ridding your life of debt.

Pros: No monthly payments!
Cons: Paying off $11,000 in student loans wasn't exactly easy. This really takes a huge amount of sacrifice and commitment.

Option 2: Utilize an alternative student loan repayment plan.

Multiple Income-Driven Plans are available to those who quality based on the balance of your loans and your level of income. Most of these plans modify your payments to be around 10% of your income but change your payment term to 20-25 years. Any remaining balance at the end of the term is then forgiven.

I'm not going to pretend to be an expert on this option, so you'll have to a little digging in the link above to determine whether this is right for you. These plans can be life savers to keep you from drowning in student loan debt, but they do not come without their downsides.

Pros: Monthly payments become more manageable. Balance is forgiven after 20-25 years.
Cons: You will make payments for a looooong time. Not everyone qualifies. You need to update your information each year to verify that you qualify for the program.

Option 3: Steal someone's identity, forget about your loans, and leave the country.

If you're going to go this route, you really need to think outside the box. I clearly didn't put enough effort into my attempt in 2010 at living out my days as a German woman. To be fair, I didn't yet have student loans to serve as a motivating factor.

What are You Doing with Your Loans?

We would love to hear what you're doing especially if you're taking advantage of one of the income-driven plans. Are you utilizing a different strategy than we mentioned?

If you're comfortable sharing with the rest of the squad, leave a comment or send us an email and let us know what you're doing! If something's working for you, chances are someone else could benefit as well!


  1. Other options:

    1) Refinance your student loans. Look around for lower rates. Include other types of loans in your search.

    2) Join the military. OK, you shouldn't join the military just to pay off your student loans, but if you're considering service, then think about it. http://www.military.com/education/money-for-school/student-loan-repayment.html

    3) Get your loan forgiven. There's more opportunities here than you may think. Teachers, government employees, non-profit employees, etc. can get forgiveness of loans. https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation

    4) Nurses and doctors have a variety of student loan forgiveness opportunities available to them.

    5) Some employers offer student loan repayment as a perk. Check with your employer.

    And here's a tip: If someone else is making annual payments on your student loans, and you don't want to continue to make monthly payments, tell the lender to consider those payments "payments in advance" rather than "principle reduction payments".

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