What’s The Best Way to Pay Off Student Loans?


Big dreams, big debt

Many people who go to college do so with the help of student loans. I was one of those kids who couldn’t quite decide what I wanted to be when I grew up, and so I ended up spending many extra years in college, accruing massive student loan debt the whole time. At the time, I didn’t pay much attention to it, because it is not required to make payments on student loans while one is still in school. I sure did notice afterward, though, when the bills started coming in! I had multiple different loans from different companies, including both public and private loans. I had maxed out the amount of public or federal loans that I was able to get and had to get the rest in private loans, which came with even more hefty interest rates. The result was hundreds of dollars per month in bills 6 months after graduation.

Indecision will cost you

I have two bachelor’s degrees because the first one ended up being in a major that really didn’t have much in the way of job prospects without my having to go on to my Doctorate, which I could not do at the time. Unfortunately, I found this out after graduation. I started out paying the loans the best I could, which sometimes meant that I paid one but not another, or none at all. I got farther and farther behind, and because of interest my balances kept going up. My credit took a serious hit.

Taking a Break from Student Loan Payments Without Penalty

I finally went back to college for a degree that would lead to a well paying career, and in doing so was able to skip my loan payments for a while longer. This is called having your student loans deferred. I learned that if you contact the servicer of your loans, there are multiple different types of deferments. You can apply to have loans deferred for hardship for varying lengths of time. The main thing is to communicate with the lender/servicer before you are late or miss a payment. This will save your credit.

How To Refinance Student Debt

After I graduated the second time, I started paying my loans again. I also started doing a lot of research about how to lower my payments, because I felt like I was getting absolutely nowhere and drowning. I found out that I could consolidate my federal loans into one large loan with a fixed interest rate with only 1 payment. I immediately did so. It wasn’t hard, it just took some paperwork. I did some searching online for companies that offered student loan refinancing. At the time, there was really only one program with the federal government that did so. Nowadays there are multiple companies that offer student loan consolidation, so if you decide to go this route, shop around for the best interest rate and time frames. I then only had that payment and my payments for my private loans, because the government did not allow the combination of public and private loans. This still beatthe 6 payments I had before that because the consolidated payment was significantly less than the individual payments had been, and the interest rate was pretty low. One note about consolidation, and that is that if you consolidate loans it may make you ineligible for certain repayment programs offered by the government. One of those is the loan repayment for public service program, which is a way for people to get loans forgiven if they enter into certain professions. Always look into the details of loan repayment programs you may be interested in before consolidating, unless you cannot make the payments without doing so.

The Best Way To Pay Off Student Loans: The Stacked Loan Payment Payoff Method

Since I still had several loan payments, I wanted to pay them off in the most efficient way possible. I did so using a method called stacked pay off. This means that any time I had extra money I would send it to the loan with the highest interest rate first until that loan got paid off. Then, I would apply the amount of money I had been paying on that loan to the next loan in line each month. This drops the balance of the loans much faster than just paying the minimum payment on each one or just paying a little extra on each one. It is also quite satisfying to see loans being paid in full.

During college, I was fortunate enough to get married. My spouse, unfortunately, had almost as much loan debt as I did. We applied the same methods to paying them off, including consolidating them. We decided to maintain our frugal college lifestyle even after we were both working, and we applied all of my spouses income and any extra I made directly to our student loans in the stacked loan payoff method. The result was that we were able to pay off $136,000 in student loans in 7 years, with a combined income of about $80,000 per year.


Before even taking out any student loans, do your best to make a firm decision on what you want to accomplish in college. Taking extra classes or changing majors costs a lot of extra money.

Always communicate with your lenders before you miss any payments or get into financial trouble. Often they can help with deferments or other money saving options.

If at all possible, pay extra each month to decrease the amount of interest you pay on the loans.

Consider consolidation, if you have multiple loans with multiple payments and the payments cause a strain on you.

If you still have multiple loans or debts, using the stacked loan payment method can save time and money by paying the loans with the highest interest first and then applying the payments for each paid off loan to the next loan in line.

It will take time, but you can and you will one day be debt free. In the meantime, there are ways to make obligation feel less overwhelming and more manageable.

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