About 65% of college graduates in 2017 owed an average of $28,650, according to The Institute for College Access and Success . Owing nearly $30,000 can seem overwhelming, and you might wonder how long it will take to pay off that loan, and whether paying it off will prevent you from reaching other financial milestones, such as buying a house or a car, or starting a family.
Our Student Loan Payoff Calculator can help you figure out how long it might take to pay off your loan under your current payment plan. If you are unsure of your loans and payment dates, you can also look them up. Use the National Student Loan Data System to view all your federal loans and the AnnualCreditReport.com to find a list of any of your private loans.
If you’d like to pay off your student loans faster, here are eight ways to potentially hit that debt-free milestone sooner than you planned to.
Making Extra Payments
There are no prepayment penalties with student loans, so if you want to pay off your loan faster, you can simply make an extra payment each month. However, borrowers may need to specify that any extra payments should be applied to their principal loan balance, not the next monthly payment.
Making a Yearly Lump-Sum Payment
Tax refunds or yearly bonuses can be used to make an extra one-time payment each year. Paying even an extra $1,000 from a tax return once a year could help someone get out of debt sooner.
Devoting Side-gig Earnings to Your Loans
Taking on a side gig that allows you to earn extra money can start with an Etsy shop, walking dogs, or offering guitar lessons. Considering the average dog walker rate is $13.94 an hour , just five hours a week walking dogs could mean an extra $3,600 a year.
Need help paying down your student loans?
Student loan refinancing with SoFi may
be able to help.
Putting An Income Raise to Use
If you get a raise, rather than spending that extra money to buy something new, upgrade to a nicer apartment, or take a vacation, that extra cash could mean an extra payment on your student loans each month. The 2018 to 2019 U.S. Compensation Planning Survey , projects a 2.9% raise for employees in 2019.
Looking at Jobs that Can Help You Qualify for Loan Forgiveness
There are several types of jobs that can help you qualify for student loan forgiveness (on certain federal student loans), including working for the Peace Corps and AmeriCorps.
The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on Direct Loans after 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Employment with the following types of organizations may qualify graduates for PSLF, according to the U.S. Federal Student Aid office :
• Any federal, state, local, or tribal government organization.
• Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
• Other types of not-for-profit organizations that are not tax-exempt provided their primary purpose is to provide certain types of qualifying public services.
• You can learn more about qualifying employment here .
Seeking Employers that Offer a Matching Student Loan Contribution Plan
A number of companies are starting programs to help their employees pay off their student loans, including Fidelity, Aetna, PwC, Carvana, and SoFi, according to GlassDoor . Some of these employers help pay off loans while others offer a matching payment plan.
For instance, PricewaterhouseCoopers offers up to $1,200 per year toward their employees’ student loans, with a maximum of $7,200. And Aetna offers up to $2,000 in matching student loan payments for a maximum of $10,000 for full-time employees.
Refinancing Your Student Loans
Don’t underestimate the potential power of refinancing your student loans. You could end up with a lower monthly payment, or you may be able to reduce your student loan interest rate. Refinancing allows you to combine any federal or private student loans into one new loan with a new (and hopefully lower) interest rate.
And SoFi offers rate discounts to eligible members who enroll in autopay for their loan payments. SoFi offers a range of refinancing options to help optimize your monthly payments, and potentially improve your loan terms and rates.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.