How to Reduce Your Student Loan Debt (Safely and Effectively)  


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Accruing student loan debt can be more than worth it for the education you will receive and the career prospects that await you. 

Furthermore, there are several ways that you can potentially reduce your debt safely and effectively. 

Consider Taking Out a Private Loan at a Lower Interest Rate 

If you have a lower interest rate on your student loan, you can reduce the amount you have to repay. 

Therefore, you should consider taking out a private loan to find a lower interest rate. 

For instance, SoFi provides a no-fee private student loan, to cover school-certified expenses like tuition, board, transportation, and supplies, at a low rate. 

Therefore, you can lower your student debt with SoFi. 

You can also find a monthly loan payment to suit your budget, earn points that can be redeemed to pay down your student loan, get a discount when you set up autopay, and give yourself more time to repay the loan by forgoing the payments until six months after graduation. 

So, you may be able to reduce your student loan in various ways when you take out a private student loan. 

Make Payments While You Are Still in Education 

You could also reduce your future student debt by making payments while you are still in education. 

By making payments during your in-school deferment period before you graduate, you could reduce your debt a little. 

Also, if your student loan is accruing interest while you are in school, it can be a good idea to at least pay the interest off on a monthly basis while you are in education. You can then avoid capitalized interest after you graduate. 

Once You Start Repaying Your Student Loan Debt, Pay a Little Extra Each Month 

Once you have graduated, you could reduce your student loan debt by paying more than you are required to pay each month. 

Even a small amount in addition to your regular student loan payment can be effective to lower your debt and help you pay off your debt faster. 

Work for a Company That Offers Student Loan Repayments 

If, after graduation, you find a job at a company that offers benefits packages that include student loan repayments, you could significantly lower your debt and pay off your student loan faster. 

However, the number of companies that offer student loan repayments as part of their benefits packages is minimal at present. 

But it could be worth applying for jobs at companies that offer this very helpful benefit. 

Look at Student Loan Forgiveness or Repayment Programs 

Two other options that may be available to you are Public Service Loan Forgiveness plans and Income-driven Repayment plans. 

The PSLF plan is a federal forgiveness program for people who work in the public sector. That includes things like working for a public school, a nonprofit organization, or a government agency. 

You would make 120 payments while working for a qualifying employer. Once you have made all of those payments, the remaining balance of your student loan will be forgiven. 

IDR plans calculate your monthly payments based on your family size and your household income. Most federal student loans are eligible for Income-driven Repayment plans. 

With an IDR plan, you would make monthly payments for a period of 20 or 25 years, after which your remaining balance is forgiven. 

Be aware that with an IDR plan, you would update your income each year or when significant life changes happen, such as a change in your household size or a job loss. 

If you find yourself out of work, an IDR plan could be helpful because your payments could drop to zero dollars each month without you incurring any fees or other penalties. 


This content is provided by an independent source for informational purposes only and does not contain legal advice. Consult an attorney or financial advisor when making decisions. This information is provided by legal writers and does not reflect the views or opinions of The Daily Sundial editorial staff.