How To Pay Off Student Loans While In College

Perhaps one of the hottest topics today regarding debt is student loans. Young adult Americans are expected to walk out of college or university, not only with First Class Honors but also saddled with a mountain of debt.

Millions of average Americans accrue debt during their lives. This can be from credit cards, bank loans, hire-purchases, and mortgages. However, much of this debt comes over a period of time. Students on the other hand are expected to start their working lives with more debt than many other people ever have.

If you are one of the recent graduates you are no doubt wondering about the ways to be free of student debt faster. Perhaps you have investigated loan forgiveness programs, or have tried refinancing.

If you are still at college, however, perhaps you can start paying off your loans before you leave. Is it possible to do this, and how can you pay your loan back while at college?

Why should you try to pay off student loans at college?

Because of the amount of debt that some students leave school with, it can be very difficult to have the life they want.

Many students leave college dreaming of starting their own business, and they often have the talent and the qualifications to do so. But, when it comes to obtaining financing or investments, their student loan debts get in the way.

Anyone who has found themselves snowed under with loans and credit card bills has wondered if it is possible to escape debt. Many graduates have found that it isn’t.

Two years ago, CNBC reported on the state of student debt and reported about two graduates who owed $500,000 and over $300,000 each. These students’ debts had cost both of them their plans for owning a business, and one, their marriage.

Starting to pay off student loans in college can mean a huge difference when it comes to graduation and the future.

Is the situation with graduates really that bad?

The above example of the $500,000 student debt might seem a bit extreme but it’s not unique. Below are some approximate average student debts for different graduates.

Bachelor’s degree – $29,000

MBA – $66,000

Graduate school – $71,000

Law school – $146,000

According to NerdWallet, a graduate from medical or pharmacy school is likely to owe anywhere from $180,000 to over $200,000. The big debt prize though goes to dental school. The average graduate looking forward to a career in dentistry will have to contend with nearly $300,000 in student loan debt.

So, it is fairly clear that if there is a way to reduce this debt while studying, it has to be beneficial.

How can you pay off student debt while still in college?

Instead of wondering how you might fare in the future with a mountain of debt, perhaps it is better to chip away at it from the start.

Repayments on most student loans won’t begin until about six months after graduation. However, they could be accruing interest all the time you are attending your studies.

Before you can start thinking of paying off your loan early and congratulating yourself on how clever you are, you will need to do a few calculations. Then you will need an income, and some outside help.

Firstly, you need to budget your student expenses

If you aren’t familiar with budgeting, now is a good time to learn. Knowing how to properly budget can set you up for financial wellness throughout your life.

If you prefer to use technology to help you then a quick visit to the Google Play Store or Apple should help you find a free budgeting app.

Alternatively, if you are a graduate wanting to work out the best way to pay back your debts, then you can use an online student loan payment calculator.

Work out your income, and all your expenditures. Whatever you have over could go towards paying off your loans. Look at areas where you spend money unnecessarily.

If you don’t have any income or spare cash, then what?

Depending on the time you have available, and your skills, you could be able to find a suitable part-time job to bring in some extra money.

Search for online work such as proofreading, writing guest posts, or other remote work. Retailers on or around campus may need staff also.

Now decide which loans to pay off first

If you have subsidized and unsubsidized loans, then you should tackle the latter first. Whatever loans have the highest rate of interest will be the ones you should attack.

Right now you may be thinking that you don’t have enough money to pay back loans in college, but anything will help.

Even if you only pay a minimal amount, say $10, it will still reduce the amount of interest you incur. If you can match the interest payments then that is better, and if you can add an extra few bucks on top, then you will really be helping yourself.

Use automatic payments so you don’t forget

It can be easy to forget to make a payment when you are deep in studies and working part-time. It is also easy to decide not to pay one month because you want a little extra cash for something else.

Automated payments might help you to keep on track and not avoid interest payments. If you took out federal student loans then you can also use a service loan servicer.

This service will help you to keep track of payments made and process them. They will handle all the billing and also provide other services. There is also no cost to you as the service is completely free.

How can you reduce your student debt after you graduate?

If you have already left school then some options can help with your debt.

The Public Service Loan Forgiveness Program is one way for a graduate to wipe out their outstanding debt. This is no easy route to being debt-free though, and the qualifications are strict and will take at least 10 years to get there.

There is also the Teacher Loan Forgiveness program that offers to clear up to $17,500 from student loan debt, after 5 years of consecutive service.

Then there are state-sponsored loan forgiveness programs and the Perkins loan cancellation for teachers program.

Aside from these programs, graduates can also apply for consolidation of debts, refinancing, deferment, or bankruptcy.

Bankruptcy is always the final option, and it might not even work for student debt. As Investopedia reports, student loans are much harder to get rid of than other debts, even through bankruptcy. The vast majority of graduates fail to get their student debts cleared through bankruptcy.


There are reports of some graduates being able to repay student loans of up to $100,000 within a couple of years of leaving college. This was done through careful budgeting, living frugally, and making early payments.

By stopping the interest mounting while you are in college, you will give yourself the best chance of being debt-free quicker than your fellow graduates.

However, if you have already graduated then it isn’t too late to receive help. Forgiveness programs and refinancing can help, and many student loan planners can assist.

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