With the average amount of student debt reaching $29,800 in 2018, college students can feel like they’re graduating with an albatross hanging from their cap instead of a tassle.

So it wouldn’t be any surprise that before the ink is dry on your college diploma, you might already be exploring ways to pay off your student loans. While there’s no magic wand you can wave to reduce student loan debt overnight, you’re not completely without options.

Paying off student loans as quickly as possible is all about strategy. And with the right plan, you could not only knock off your loans, but even start saving a little for the future at the same time. Here’s how to do it.

1. Know what you owe

This simple piece of student loan debt advice is one of the most important. If you want to make real headway in paying off your student loans, you first have to know what you owe and who you owe it to.

Your loan servicer (aka, the company that handles the billing of your loan) can help you figure it all out. Reach out to your loan servicer (or servicers) to determine:

Once you have all the information, you can move on to the next step in your student loan repayment plan.

2. Consider if you can afford to pay extra

The best way to pay student loans is ultimately the method that works for you and your budget. But you can make progress faster if you pay more than the minimum amount due each month.

Remember, a budget is a comparison of your monthly expenses to your income. The goal is to have money left over at the end of every month.

(If you don’t have a budget in place yet, put your student loan payoff plan on hold and work to create one.)

Go over your budget and look to see if you have expenses you can reduce or get rid of altogether. The extra money you find in your budget can be used towards your student loan payments or be added to savings.

If you’re saving, start by building up a small emergency fund first. You can keep this money in a high-yield savings account, like our Online Savings Account, to earn a competitive interest rate. And if you have a 401(k) retirement plan at work, for example, you should save enough of your income in the plan to at least get your company match.

Remember to snag free or found money for savings or debt repayment whenever it’s available. Tax refunds, rebates, birthday gifts, or cash back earned with a credit card could all be used to squash your student loan debt or be funneled into savings.

What if there’s nothing extra in your budget at all?

If you’ve squeezed every dime possible from your budget and you still can’t find anything at all to apply to student loans, then it’s time to start thinking about ways you could earn extra income that could be applied to your loan payments and/or savings.

The good news is, you have options. For example, you could take on a part-time job, increase your hours at your current job if you’re paid hourly, angle for a promotion or pay raise, or start a side hustle to make extra money. You could also look for a new position (or even make a career change) that pays a higher salary.

3. Make your student loans less expensive

If you owe multiple loans to multiple loan servicers, refinancing or consolidating them can help you make them more manageable.

First, you can streamline your monthly payments into a single student loan payment. That can make keeping up with your student debt easier.

Second, and perhaps more importantly, student loan refinancing could help you lock in a lower rate on your outstanding loan balance. A lower rate means more of your payment goes to the principal each month. Bonus: You get out of student loan debt faster.

If you have both federal and private loans, think carefully before combining them. Refinancing them together into a new private loan means you lose certain protections associated with federal loans, including the ability to pause your payments temporarily through deferment or forbearance.

4. Schedule automatic payments for your loans

Many student loan servicers offer autopay for borrowers and it’s an option you should consider taking advantage of. That’s because when you sign up for automatic payments through your loan servicer, you may be able to get a discount on your interest rate.

The discount may only be a quarter of a point — but that can still save you a lot on your student loans. And by paying automatically, you can also avoid late payments, which could hurt your credit score.

5. Think twice about income driven repayment plans

Income driven repayment plans are available for federal loan borrowers, but you might want to steer clear if your goal is paying off student loans faster.

With this type of repayment plan, your monthly loan payment is tailored to fit your income. You could avoid budget strain this way, which is good if you’re not making a lot of money yet. The downside? Your repayment term is stretched out even longer, so you end up paying more interest in the long run.

If you can afford the standard payment or paying extra, then income driven plans may be moot. The only exception is if you’re trying to get some of your loans forgiven through the Public Service Loan Forgiveness Program.

With this program, you can get your remaining loan balance forgiven if you pursue a career in public service and make at least 120 qualifying payments toward your loans. If you find yourself in this situation, you could be better off with an income driven plan, since you could pay less out of pocket to your loans.

6. Consider switching up your payment schedule

Most loan servicers expect payment once per month. If you’re serious about how to pay down student loans faster, you might want to bump up your payment frequency.

For example, you could make biweekly or even weekly payments if your loan servicer allows it. The benefit of doing this is that you chip away at the interest that’s accumulating on your loans.

If your lender doesn’t allow you to set up biweekly payments using autopay, don’t worry. You can schedule your regular payment with autopay to get the rate discount, then set up another biweekly automatic payment from your bank account. You won’t get a rate break on the second payment but you will nibble away at your loan balance more quickly.

7. Keep an eye on your total debt picture

If student loans are your only debt, then you might have more freedom and flexibility to save. But if you also have outstanding credit-card balances, you’ll need to come up with a plan for paying those off, too.

The debt snowball method is one option to try. With this debt repayment plan, you rank your credit cards from the lowest balance to highest, regardless of interest rate. You then pay as much as you can toward the first debt, while paying the minimums on everything else.

Once that first debt is gone, roll the amount you were paying over to the next debt and keep making the minimum payment on the rest. Continue rolling payments over until all of your credit card debt is zeroed out.

Paying down student loans shouldn’t require an advanced degree

Paying off your albatross-like student loans may be your top priority, but it’s important to make room for saving as well. Putting these tips to work can help you get on the way to student loan debt freedom and get started with your savings goals.

Discussion questions:

  • How do you save money and make payments toward your student debt at the same time?
  • What payment method do you use for your student loan debt?
  • Do you feel overwhelmed by student debt?