7 Simple Ways to Free Yourself from Student Loans

7 Simple Ways to Free Yourself from Student Loans

According to recent reports, the average Class of 2016 graduate has over $37k in student loan debt, which is up six percent from last year. While the specific amount can vary for each individual depending on scholarships, assistance from parents, private vs. public schools, etc., there are approximately 44.2 million Americans with student loan debts.1

I myself graduated in May 2012, and had my own little chunk of student loan debt to tackle. I had done what I could to minimize costs by spending my first two years completing my associate’s degree at a local community college as a dual enrolled student (which was available to me at no cost as a high school student besides paying for my books). I also used my SAT scores to secure a small scholarship or two prior to going away for my final two years of college. While I could have attended a local state university for next to nothing, I made the choice to attend a private Christian university in Lakeland, FL called Southeastern University. I have never regretted my choice, but it definitely was the more expensive option. Thankfully I only attended my junior and senior year, rather than all four years, which reduced costs as well.

I managed to pay my student loans off in the last five years, and while I don’t have any magic solutions, I do have a few tips I can pass along:

1. Evaluate your budget.
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I’m also surprised to meet people my age (and even older!) who have no idea what they’re spending each month. Before you can figure out a plan of attack, you have to know how much you’re making each month and also how much you’re spending. I aggressively evaluated my finances at least once a month, sometimes twice a month to see where my money was going. I’m not proud of it, but there was a point in my working life where I was spending at least $60-$70 a month at Starbucks—yikes!

2. Make your plan.

One of my favorite sayings is that if you fail to plan, you plan to fail. It’s so true! You aren’t going to accidentally pay off all your student loans unless you have tons of disposable income (which most college graduates don’t have), so you have to get yourself a game plan. Once you’ve figured out what bills you need to pay each month, and then identified what you like to spend each month, what are you left with? Do you have any money to save? Do you have extra money to put towards your debt? Is there any extra money you already have that you could put towards your loans if you shift your lifestyle?

I cut back on my “just because” trips to Target and opted for a capsule wardrobe to minimize my spending on clothes to every few months. Instead of buying food out every day that I worked, I’d try to meal prep and bring my meals from home. I set a cap of what I could spend at Starbucks monthly and if I hit my limit, then that was it. I know it seems small, and similar to every article you’ve ever read about getting out of debt, but it really helped tremendously. I easily saved several hundred dollars a month by implementing all these things, which freed up money to go towards my loans.

3. Get a part-time job.

If you’re in a position where you have time to get a part-time or side job, do it! You can pay your other bills and save money using one job’s income and use all the additional income from your side job to go towards your loans. I haven’t personally done this, but my fiancé took a restaurant job in order to finish paying off his student loans and he became debt free in a matter of months. It’s definitely hard to juggle a busy schedule for a few months, but if you’re committed to getting out of debt, it’s worth it.

4. Pay more than what’s due.

Usually, when you take out student loans you can manage your payments online and payments are set up to automatically withdraw from your bank account for your convenience. When I decided to aggressively pay off my loans, I committed to paying at least twice what was due each month. Many months I even paid three times as much as what was due! This cuts down on the number of months I was paying, which also cuts down on how much interest my loans will accumulate, which ultimately means I paid less in the long run.

5. Make the call and figure out where your money is going!

Pay towards the principle. If you’re going to pay extra, make sure it’s going towards the principle! Many times if you don’t specify, the credit union will take your extra payments and put it towards the interest you’ll accumulate in the future instead of paying off what you currently owe. Spending a few minutes asking questions on the phone with someone to clarify what your payments are going towards is critical. I spent some time on the phone with a representative and it was so helpful and made me feel more in control of my finances.

6. Extra is for loans, not shopping!

Another thing that I found extremely helpful was determining that if I got any extra money that I didn’t anticipate, then it would go straight to my loans. One of the best resources for me the past few years has been my tax return. Instead of shopping or buying something or even just sitting on the money for a rainy day, all my returns have gone straight to my loans. I already had my monthly budget and had my other bills taken care of, so I didn’t feel any sort of financial loss. Earlier this year between my tax return and my usual monthly payment I was able to pay over $1,500 in just one month!

7. Finally, track your progress!

I love making charts and evaluating and calculating things. One of my biggest motivators to get out of debt was seeing my progress. Once I started seeing that huge sum diminish bit by bit, I actually got excited to pay it off! I could imagine a day where I wouldn’t be paying off my loans and it was thrilling. It’s easy to feel like we can’t control our financial situations, but often we have more available to us than we realize.

I’m not independently wealthy by any stretch (I literally have to pre-determine when I can buy coffee out, ladies) but still managed to pay off my student loans within five years of graduating. It can definitely feel overwhelming, but with a little bit of grit and commitment, you can do it! You can take control of your situation and reach financial freedom.

For more for on strong women and money management, check out:

Managing Your Money So It Doesn’t Manage You
35 Inner Thoughts of the Working Woman
3 Easy Apps and Tricks to Save Money
Student Loans and How to Get Out From Under Them
10 Ways to Be a Young, Respectful Professional

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