Student Loans are an epidemic and it doesn’t look like they are going away anytime soon, but there are some successful strategies to help. Many borrowers may believe that they will never repay their student loans. Many may feel forced into making the minimum payments on student loans that increase their interest eternally. The truth is that most people can pay off their student loans if they use an effective strategy.

There are two common successful strategies for paying off student loans:

  1. Paying off loans as quickly as possible, which comes in the form of the Debt Avalanche or the Debt Snowball
  2. Paying loans off slowly over time while potentially gaining loan forgiveness with an income-driven repayment plan.

Successful Strategy 1: The Debt Avalanche

The Debt Avalanche strategy focuses on removing the highest amount of interest each month. Adherents to the debt avalanche the minimum amount on loans with most of their loans, but they invest the maximum amount possible in the loan with the highest interest rate. If a borrower focuses on the highest interest rate every month their loan’s growth is cut short.

This strategy costs the least amount of money over time out of the quick repayment methods. However, it can be considered a change in lifestyle to pay off debt as fast as possible. Many find this method to be too extreme, though it is the most effective at paying down interest quickly.

Successful Strategy 2: The Debt Snowball

The Debt Snowball pays off the smallest debt firsts, then moves onto the large debts. The snowball gains momentum on payoff and keeps rolling. You pay only the minimum payments for everything but the loans with the smallest balance. With this strategy, a borrower gets rid of debts one at a time. This provides a clear trajectory and a tangible sense of progress, that many may consider emotionally satisfying. More interest is gained through the snowball strategy instead of the avalanche strategy, but completely removing loans may be easier to track, and feel better.

By following this principle borrowers will often pay more interest than people who adhere to the Debt Avalanche method. While borrowers will have fewer bills to deal with at the end of each month, those that remain may grow larger through their interest than the smaller bills ever were.


Successful Strategy 3: Income-Driven Repayment Plans (IDRs)

While the standard student loan repayment plan can be too high for borrowers to pay for their living expenses and their student loans, an IDR is often better at enabling an individual’s standard lifestyle. A borrower may be able to pay off student loans with a fraction of their discretionary income per month after switching to an IDR. This amount can be as low as $0. However, getting an IDR often extends the amount of time it takes to pay off a student loan.

Getting in the right IDR plan can result in student loan forgiveness after 20 to 25 years of enrollment. Loan forgiveness and lower repayment costs per month often create a more attractive option than the other student loan strategies. Special occupations, such as public service workers, may be able to look into special funds. For example: Public Service workers may have their debt forgiven in 10 years by following the Public Service Loan Forgiveness (PSLF) fund. However, many people have problems with the paperwork required to stay on track with these plans. It is often worth consulting an expert to gain the find successful strategies for an individual’s situation.