Home Student Loan Debt 5 Tricks that Cut Down my Student Loan Debt

5 Tricks that Cut Down my Student Loan Debt

by Bethany
tricks that cut down student loan debt

Ready to slash your student loan debt? Same. I started with $78,000 of student loan debt when I changed my re-payment plan from PSLF to aggressive pay-off. Below are 5 tricks that helped me pay off that student loan debt even faster.

1. Free college

Yes. You heard that right. I had two free years of college. I enrolled in an early entry program at a local community college. I graduated high-school with my AA and transferred all those credits to my undergrad university. This program is still available for high-school students in certain states. It’s worth investigating if you want to get a head start on the general education requirements for an undergrad degree and cut down your student debt.

2. Negotiating my financial aid award

One of the best things I ever did was negotiate my financial aid award letter. I choose an expensive program and didn’t have much financial aid in form of grants and scholarships. This meant I was taking some big student loans every semester. Even with the student loans and my own income from 3 jobs, I came up short for covering tuition.

I figured there would be no harm in asking about additional aid. I first asked for more scholarship opportunities that I could apply for. Unfortunately, I had the two I qualified for. Then i asked about being considered for a Work-Study position. At my university, this was something that had to be requested. I met with the head of the financial aid department and within a few days, I had a steady work-study income that helped cover the rest of my tuition.

You can negotiate your financial aid at any time. It helped that I presented my situation in a direct, clear and concise manner. I had also calculated exactly how much more I needed to cover tuition. Being prepared and patient was definitely helpful in getting me the additional money so I could cut down my student loan debt.

3. Finding a side job (or four)

I’ve been working since I was 12 years old. My first job was scooping horse poop and cleaning a pig pen at a local farm down the road. I then handed out flyers in the country area for pet sitting services as soon as I turned 14. Many odd jobs followed. While I didn’t save for college like I could have, I knew how to work hard to create multiple income streams from a young age.

I had 4 jobs while I was in college to help pay for tuition. Now, as I start to pay off student loans I’ve taken on several side-hustles to generate more income. As soon as we settle into our new home, I plan to pick up pet-sitting and dog walking too. This money I view as a strict “student loan payment” and not fun money.

4. Taking advantage of forgiveness programs

I gave up Public Service Loan Forgiveness when I quit teaching as I am no longer eligible. However, while I was teaching I did take advantage of another forgiveness program called Perkins Loan Cancellation. I had one $5,000 Perkins Loan from undergrad. These loans are no longer distributed, but if you had one from before this could also work for you.

As a full-time teacher at a low-income school, I qualified for the Perkins Loan Cancellation. For every full-year I worked full-time, I could get a portion of my student loan forgiven. After 5 years 100% of the loan could be forgiven. I was able to get about $4000 of the student loan forgiven and then paid off the rest when I left teaching.

If I hadn’t left teaching or a public service role, I would have stuck with PSLF. You should always look into student loan forgiveness programs as a way to cut down your student loan debt.

5. Living on less

This one involves my partner because we are paying off the student loans together. We had to re-do our budget. The first thing we cut was all international travel in 2020 until student loans are paid off. We will keep a vacation fund for local trips and road trips. My tradition of leaving the country every year has to be put on hold.

Next, we cut down or dining out budget and personal purchases. We also applied HisFI’s big raise towards student loan payments and plan to apply a big chunk of money from our house sale and a severance towards student loans. Making these choices can be hard, but living on less is essential to aggressively pay back the student loans.

Why we committed to aggressive payoff

The real trick is actually committing to a payoff plan with all your heart and soul. That’s what it takes once you’ve decided to go with the aggressive repayment route. The longer we take to pay off student loans, the more we pay in interest and we’re just not about losing money.

Our new aggressive repayment plan has us out of debt as soon as 2022, but hopefully sooner if I can bring on a few more clients. We are using the debt avalanche method and targeting the high-interest rate student loans first with the big pay off (that chunk of money coming in). These will be gone in the next few months, so we decided not to refinance (even though this was the original plan).

My other student loans are at a lower interest rate of 3.05% or so and this is equivalent to the rates out there right now. Because of this, we are keeping them as federal student loans for the flexibility. One endnote, we made sure to continue investments while we pay off student loans. It doesn’t make sense to stop building wealth for several years for debt pay-off. You can read more about this choice here.

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