7 Creative Ways to Pay Off Your Student Loan Debt

6 min read

Posted on April 18, 2022

two friends looking at creative ways to pay off student loans

Don’t let student loan debt hold you back from your financial goals. According to the Education Data Initiative, the United States has more than 43 million borrowers and an average student loan balance of $37,113. If you’re struggling to find a repayment option and concerned about going into default, then you’re not alone.

Find out different ways to help deal with your student loan payments and reach your financial goals. Check out these seven creative ways to potentially pay off your student loan debt faster. Earn some side income, consider repayment options and explore other strategies to save money on interest and pay off your debt early.

1. Find Out if You Qualify for an Autopay Discount

Autopay is a popular option that automatically schedules payments from your chosen bank account to pay off your student loans. This reduces the likelihood of you forgetting to make a payment on time, which is a win-win situation for you and your lender.

Private lenders may offer a lower interest rate when you enroll in autopay. You may receive a discount between 0.25% and 0.50% on your monthly payment. Check with your lender for more information on enrolling and any available discounts.

Don’t assume every lender offers this service. Ask about your eligibility and review interest rates based on the included discounts to find the best refinancing plan for your student loan debt and financial goals.

2. Explore Student Loan Forgiveness and Related Options

How would you like to have your student loans totally or partially forgiven? This may sound like one of the most exciting and creative ways to pay off student loans, but student loan forgiveness programs come with strict eligibility requirements. They only apply to federal student loans.

Federal Student Aid highlights the following ways to cancel, discharge or forgive your student debt:

  • Public Service Loan Forgiveness.
  • Closed School Discharge.
  • Teacher Loan Forgiveness.
  • Perkins Loan Cancellation and Discharge.
  • Discharge Due to Death.
  • Total and Permanent Disability Discharge.
  • Discharge in Bankruptcy.
  • Borrower Defense to Repayment.
  • False Certification Discharge.
  • Unpaid Refund Discharge.

The Public Service Loan Forgiveness (PSLF) program is one of the most common. It applies to select individuals employed at the federal, state, local, or tribal level or in select not-for-profit organizations. The requirements are strict, so be thorough in checking the program and considering all your options.

3. Start a Side Hustle

Earning extra money is a straightforward option if you’re looking for creative ways to pay off student loans. You could consider these part-time jobs and side hustle opportunities to potentially make some extra cash for your student loan payments:

  • Lyft: Become a driver and earn money during your daily commute or free time.
  • Uber: This popular company allows you to offer ride services or spend your free time as a delivery driver for some extra income. Uber Eats gives you more flexibility in the types of jobs you can pick up in your area.
  • eBay: List unused items for sale on eBay to pay down student loans. eBay allows you to auction off items to try to increase the amount you earn. Check out which items are selling and how much they are selling for to see if you have any rare or high-priced items you’re willing to sell.
  • Facebook Marketplace: Connect with friends, neighbors and interested buyers around the world to sell items on Facebook Marketplace, which makes it easy to advertise virtually any item and negotiate a deal.
  • Airbnb: Whether you’re a homeowner or renting an apartment, you may be able to rent out your place for extra cash. Check local laws and tenancy agreements before using this option. You may be able to earn a side income just by letting vetted guests sleep on your couch or stay at your place while you’re on vacation.
  • Freelance opportunities: Find out how to turn your talents and skills into a side gig online. There are plenty of freelance opportunities to transcribe, write, edit, teach or perform customer service duties from your home. Explore opportunities that match your skills or help you get paid for your hobbies.
  • Online surveys: Companies like Survey Junkie offer you cash, discounts or freebies to take online surveys. These are quick and easy tasks to do in your free time but typically don’t amount to a major source of income.

These opportunities may not help you get rich quickly, but you could potentially earn some cash to make extra payments. Even college students can try out many of these side hustles, so it could be worth exploring your options to make use of your downtime and pay off your loans.

A side hustle could help you earn extra cash, but it’s up to you to focus on paying down your debt. Create a budget or other plan to send more or all of your side hustle income directly to your debt. You can quit your part-time job after your debt is paid or use that extra income to celebrate your accomplishment.

4. Refinance Your Student Loans

You may be able to refinance student loans with your current loan provider or with another lender. A key consideration is whether your loans are federal or private. Refinancing typically means taking out a private loan that consolidates a current single or number of federal and/or private student loans into a new loan, often with new terms and rates. Depending on the interest rates and monthly payment amounts on your existing student loans, you may be able to save money through refinancing.

You typically need to have a higher credit score for this strategy to work. Shop around to see which lenders may be willing to offer you a refinanced loan with lower interest rates or improved terms. Ask about the following features to ensure you’re getting a better deal out of student loan refinancing:

  • available loan terms.
  • current interest rates offered.
  • minimum estimated payment amounts.
  • any applicable refinancing fees, terms and conditions.

Depending on your credit score and other factors, you may need to apply with a cosigner to enjoy improved terms and interest rates.

5. Make Biweekly Payments

Most student loans have a single monthly payment. Instead of continuing to pay the minimum, try to make extra payments throughout the month. Designing a biweekly payment plan for yourself may be a convenient way to structure additional payments into your budget. Note that some lenders may have fees for paying off your loan too early.

This is especially convenient if you get paid biweekly. Simply take an additional amount from each paycheck and put it toward your loan amount. Biweekly payments can reduce the amount of interest you pay throughout the life of the loan and may help you pay off the loan faster, even if it takes away from your monthly budget in other categories.

Only make these payments if you have the additional income to do so. You have other monthly expenses to consider, so review your budget before taking out money from each paycheck to put on your loans. As long as you have discretionary income, however, this can be a great way to build in extra payments to your monthly budget.

6. Pay Down Your Balance While in School

Another trick to go above and beyond the minimum payment plan is to start repaying your loans while in college. Federal loans, and some private lenders, don’t require you to make any payments while you’re still a student. Some college students only earn enough to cover living expenses, but others can start making payments before they graduate.

Be creative with the ways you use your time in college. If you find that you have free time throughout your day, consider a part-time position on campus or a side hustle that could help free up money that could be used to make loan payments before you graduate.

Consider creating a budget in college that helps you find any extra income to put toward your debt. Remember that you can’t make payments on federal financial aid that you’ve received from the FAFSA while still enrolled in school.

7. Use Your Tax Refund

A tax refund, for many college students and graduates, is a bonus that isn’t accounted for in their yearly budget. According to the IRS, the average tax refund in 2021 was $2,815. Since the average student loan monthly payment is $460, according to the Education Data Initiative, this extra cash could be put directly toward student debt to pay significantly more than the monthly minimum.

This strategy only works once per year, but it’s a helpful option that doesn’t stretch your budget or require such disciplined savings week over week. You can learn more about tax refunds as you prepare for tax season.

You may not receive thousands of dollars as a tax refund. If you’re an independent contractor, you may actually pay taxes rather than receive a refund. Explore tax breaks and other strategies with your accountant to see if you can reduce the amount you’re required to pay or even receive a refund.

What Loans Should You Pay Off First?

It could be beneficial to focus all of your creative ways to pay off student loans on a single strategy to maximize that extra cash. Take some time to review the interest rates and other loan terms when you’re shopping for lenders.

There are many different strategies to choosing which loans to pay off first. Here are some strategies college graduates take:

  • highest interest rate first.
  • smallest balance first.
  • private student loans before federal student loans.
  • consolidate first.

Paying off loans with the highest interest rate is one strategy that could result in less interest paid in total. There isn’t necessarily a right answer, though. As long as you’re putting additional income toward your debt, you may pay it off sooner than someone only paying the minimum on every loan.

Focusing on one loan first doesn’t mean ignoring the minimum monthly payments of other loans, but it means any additional income should go toward repaying a single loan. Debt consolidation may be a helpful way to avoid this issue and ensure you’re not missing the minimum payment on one or more of your loans. In the end, however, you should choose the option that fits your personal finances and financial goals.

Learn More About Student Loan Repayment Options

From side hustles to tax refunds, there are many creative ways to pay off student loans. Remember to always make minimum monthly payments on every loan.

If student loan refinancing sounds interesting to you, explore student loan refinance options today.


The information provided in this blog post is not intended to provide legal, financial or tax advice. We recommend consulting with a financial adviser before making a major financial decision.

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