Strategies for Paying Off Student Loans

With the recent Supreme Court ruling blocking the Biden administration’s student-loan forgiveness program, many borrowers are left with the reality that their student loan obligations are soon to resume. The Biden administration’s proposed forgiveness plan, which would have provided relief for up to 43 million Americans, faced a 6-3 defeat in the Supreme Court. This decision has left many in a difficult position, considering the prior suspension of student-loan repayments that had lasted for over two years.

Here’s a roadmap and are some actionable strategies to consider to help pay off your student loans faster:

1. Make Extra Payments: Pay more than the minimum or make bi-weekly payments to decrease both principal and interest.
2. Stay Informed: With laws and programs evolving, stay updated on new opportunities. For instance, the Education Department recently introduced the new Saving on A Valuable Education (SAVE) plan, offering potential relief to borrowers. This plan, among other features, promises reduced monthly payments for many and faster loan forgiveness for those with lower loan balances. Luckily we created a SAVE Plan Calculator and article to calculate your payment under this new plan. For a detailed overview, read our article, and check out the official studentaid.gov site.
3. Enroll in Automatic Payments: Some servicers offer interest reductions for automated payments – a double win of timely payments and saving money.
4. Apply Windfalls: Allocate unexpected financial gains, like tax refunds or bonuses, to your student loans.
5. Refinance Your Loans: Secure a lower interest rate by refinancing, ensuring more of your payment goes toward the principal. Make sure to do your research before diving into refinancing to make sure that this is the right approach for you.
6. Explore Employer Assistance: Check if your employer provides student loan assistance or negotiate for such benefits.
7. Allocate Raises and Overtime: Use any additional income to reduce your student loan, rather than increasing your spending.
8. Consider Side Hustles: Capitalize on the gig economy. A few hours of additional work can make a huge dent in your loan.
9. Budget Wisely: Trim your expenses and redirect the savings to repay your loan. Small sacrifices can lead to big payoffs.
10. Seek Expert Advice: Engage with a financial advisor for personalized strategies tailored to your situation.

Conclusion

It’s completely natural to feel overwhelmed or frustrated by this Supreme Court decision. However, with the right resources, like the regular student loan calculator on this website, or our new SAVE Plan student loan calculator, and a robust strategy, the path to a debt-free future is within reach.