8 Surprising Ways to Pay off Your Undergraduate & Graduate School Debt Faster  

Your college degree made it possible for you to land an excellent position immediately following college in a field you love. And, if you went back to school to get a graduate degree, it likely led to a promotion or new career path. Why, then, do you feel like you lived better in college than you do now? Aside from the possibility that mom and dad no longer deposit money in your checking account to cover living expenses, it is possible that your college debt is taking a big bite out of your income.

Ten years can feel like an eternity when the measure of time is loan repayment. Paying down debts more quickly will save you money in interest in the long run.

How can you pay it down faster so that you can start enjoying more of the fruits of your labor?

What is “average” debt for a college graduate?

The average college graduate with an Bachelor’s degree in 2013 left school with approximately $27,500  in student debt according to the College Board. Predictions for 2015 suggest that debt could top $35,000.

If you are one of the estimated 3 million students that sought a post-baccalaureate degree, you could have added about $100,000 to the undergraduate debt you hadn’t already paid off.

College debt is not “one size fits all.” The two primary types of student loans are private and federal student loans, and the two types differ in rates, terms and repayment options.

As a general rule, federal student loans offer better interest rates, fixed payments based on the salary of the graduate after graduation, a grace period before the loan must be repaid and loan forgiveness in certain circumstances. Private student loans can come with higher interest rates and larger payments that can stress a fledgling’s budget.

If your stop-gap measures in college were a handful of credit cards, you might have even more reason to panic every month, or feel like you are drowning in debt. Never fear! Here’s 7 smart (and somewhat creative) ways to pay off your college debt faster so you can breathe easier.

Start Paying Immediately
If you graduated recently, your federal student loans may provide you with a grace period during which time you ideally become financially settled and choose a repayment plan. During this time, however, your loans will likely still be accruing interest. By making a payment of at least the amount of your interest during this period, you keep the interest from capitalizing and getting added to the balance owed.

Pay More than Minimum
Paying the minimum loan payment each month—while interest continues to add up—can extend the time it takes you to pay off your loans. Paying more than the minimum each month, even if it’s only $10 more, can shine light at the end of the tunnel. If some of your loans are at higher interest rates, apply the additional amount to those loans first, and insure you pay them off first.

Pay down Higher Rate Balances First
Making larger payments on higher interest rate loans and credit card debt will help reduce your total debt sooner. If you have a difficult time visualizing your progress, create a spreadsheet to track your payments, remaining debt on each card or loan, and your total debt. When you make a larger payment onto the higher rate debts, you immediately reduce the principal and the amount of interest accruing each month. When the higher rate balances are gone, you can begin knocking down other debt with the money previously earmarked for loan you paid off.

Use a Payment Calculator
Don’t guess at the best scenarios to repay your college debt. Use a payment calculator. If you have federal student loans start here. For other loans, you can try one of these handy calculators from Bankrate or FinAid.

Use your Tax Refund
If you receive a tax deduction for student loan interest, your loan is one of the reasons you have a refund coming. Be responsible and use your refund to pay toward your student debt. Paying off the credit card you used to cover your books could save you significant interest, especially if that credit card balance carries the hefty 19%+ interest rate that some student cards do.

Reduce Your Living Expenses
You might not be able to ask your boss for a raise to increase the amount you can pay toward your student debts, but you can cut your living expenses to unearth extra money each month. Move somewhere less expensive. Can you move further out of the city to find cheaper rent? Could you manage with a one-bedroom apartment and sacrifice the spare bedroom that your family only stays in a couple times a year? Or could you keep the second bedroom but get a roommate to split your housing expenses with? Imagine how quickly your debt would disappear if you could pay an additional $400 each month toward your student loan debts.

Make One-Time Payments
When you receive a sales bonus or a check from Grandma, instead of splurging with the money on a night out or a weekend away. Make a one-time payment toward your loan balance. A hundred dollars here or there may not seem like much, but it over time, those payments add up to a big reduction in your total student debt.

Seek Other Income Outlets
You can also sell the things you no longer need to generate cash for those extra payments. The prom dress and extravagant heels you haven’t worn since but you held onto might be back in style. Some young woman would happily take it off your hands on eBay or Craigslist. Sell your broken gold or the clarinet that you haven’t played since middle school band.

What if you still can’t afford to pay it off?

Sometimes, even the best laid plans go awry. If you took a pay cut after a lay-off, are under-employed or have unforeseen expenses that have left you struggling to repay your student debt. There are short-term and long-term solutions.

Adjust Your Repayment Schedule
If repayment is still a huge challenge despite your best efforts to pay down and pay off your debt quicker, consider an alternate repayment option. A standard repayment plan of ten years might have been doable at your first job, but if your income has decreased, you might benefit from an extended 25 year repayment term instead. Consolidating multiple loans into one loan can result in smaller payments stretched over a longer period, sometimes as much as 30 years.

In the unlikely event that you need to stop payment altogether for a short time, deferment or forbearance might be options for you. Deferment might provide you with a break from your subsidized loans if you cannot find work or have a temporary financial hardship. With deferment, the interest will temporarily stop accruing until you resume making payments. In forbearance, on the other hand, your private or federal loan continues to accrue interest, but postpone making payments for a specified time.

Seek Forgiveness
If circumstances have left you unable to pay your student loans, investigate forgiveness and special payment options. There are programs available to help teachers, members of the Armed Forces, public servants and other special groups.