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How to Melt Your Student Loans This Summer



Summer is officially upon us, and with it the promise of warm sunshine, longer days and happy memories.  But if you’re one of the 37 million Americans with student loans, that debt can feel like a constant storm cloud over your head – no matter what the weather outside may be.

Rather than let another lazy summer pass you by, why not use the next few months to make a dent in your education debt?  Research shows that you’re more likely to achieve your objectives when they’re specific, measurable and time-bound, making summer the perfect time to set goals and see some progress by the time fall rolls around.   And it doesn’t take much – when it comes to reducing your loan balance, a few small changes can have a big impact.

There are two main drivers that accelerate student loan payoff: prepaying, or paying more than the minimum amount required, and reducing interest rate.  Here are some ideas for making both of these strategies a breeze this summer:

Save money to spend money (on student loans)
A recent ING poll showed that people tend to spend more money in the summer than any other season.  And it makes sense – between expensive vacations and warm weather activities (jet-skiing, anyone?), there are a lot of ways to lose track of expenditures while making happy summer memories.  But saving money for your student loans doesn’t have to mean forgoing the fun.  For example, you can:

  • Keep vacation costs low.  According to a recent American Express survey, the average American plans to spend $1,246 on summer travel this year.  If you’ve just got to get away, consider cutting travel costs making it a short road trip or camping adventure.  Better yet, use your vacation days to recharge at home – and spend some time planning the amazing trip you’ll take after you pay off your loans.
  • Quit the gym.  The average gym membership costs $55 per month.   If you can quit or freeze your contract for the summer, take your workout outside and send the savings to your student lender instead.
  • Start a supper club.  Nothing says summer like happy hours and celebratory dinners out, but you can save a substantial sum by bringing the party home.  Keep the $12 restaurant margaritas to a minimum by scheduling regular potlucks and BBQs with friends.  Take turns hosting, choose a fun theme each time and encourage everyone to keep costs low.

Increase your income
Saving money should net you some extra money for loans, but if you really want to accelerate debt pay down, you may also want to think about augmenting your cash flow.  Summer is actually a great time to do this, because you can:

  • Angle for a raise.  Between early Fridays and your colleagues’ revolving vacation schedules, summer is a great time for you to get noticed at work.  Forgo the 4pm happy hours, ask your manager for more responsibility and see how it all pays off at your next quarterly performance review.
  • Sell your stuff.  Who says cleaning house has to happen in the spring?  Take advantage of the nice weather by holding a yard or sidewalk sale, or go beyond eBay to sell clothes on one of the high-end online resale shops that are cropping up these days.
  • Get a side hustle.  Whether it’s writing, tutoring or DIY projects, use the longer summer days to turn your hobby into a moneymaking proposition.  Or create passive income by participating in the sharing economy – from your house to your car and everything in between, it’s easier then ever make some extra dough using the stuff you already have.  No lemonade stand required.

Fine tune your loans
Now that you’re putting all this extra money toward your loans, it’s key to make sure your debt setup isn’t working against you.  To ensure your repayment strategy is up to snuff, you should:

  • Look into refinancing.  One of the most effective ways to reduce your debt burden is to lower your interest rate, and the only way to do that is through refinancing.  If you’re eligible to refinance your loans at a lower interest rate, you can save a significant amount of money on interest while also reducing monthly payments or shortening payment term.
  • Sign up for autopay.  If you haven’t already signed up for automatic payments, now’s the time to do it.  Not only does it save you time and hassle, but most lenders offer an interest rate discount (usually 0.25%) for doing so.  As a bonus, it can help keep your credit in good shape, since even one missing or late payment can do serious damage to your credit score.
  • Move to bi-weekly payments.  This is a commonly used mortgage strategy, but it works just as well for student loans.  Bi-weekly payments add up to an extra month of payments each year. Use your bank’s online bill pay system to schedule a mid-month check or an ACH payment.  Consider matching up these extra payments with your paycheck to make it easy to increase the amount without even noticing the money is gone.

Happy summer saving, and here’s to a more debt-free fall!


ABOUT Anna Wolf Anna Wolf is a financial writer and content strategist based in San Francisco. After 10+ years of writing, thinking and talking about personal finance and investing, she still learns something new every day.


One thought on “How to Melt Your Student Loans This Summer

  1. Hi! Anna Wolf,
    Your effort to enjoy summer not to be disappointed is very good. I agree with your writing. Accelerating the payment, and reducing interest is only possible when we earn money. Is not it difficult to earn more money now a days for a student. Although your idea is good.

    Thanks for standing beside ours……

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