Money Monday: How to Pay off Student Loan Debt

BY: - 1 Sep '08 | Money

Share this article!


A few months back I ran an article by financial expert Harrine Freeman about paying off student loan debt. I got feedback that you loved the article but felt it was for younger people so I asked Ms. Freeman to write something that made sense for working adults with student loan debt and she was kind enough to help us out. (Also check back each Monday for more financial tips in this segment that we’ll call “Money Mondays”)Enjoy! -TheDad

A recent study by the National Center for Education Statistics shows that 50% of recent college graduates have student loans, with an average student loan debt of $10,000. The average cost of college increases at twice the rate of inflation. More and more adults are forced to use credit cards to pay for basic necessities. According to College the average student that borrows money to finance a bachelor’s degree graduates with less than $20,000 in total debt. Average tuition costs range from $20,000 to $30,000 per year making it increasingly difficult to get ahead in the real world after graduation.

With the current recession and rising inflation costs as well as the cost of prescriptions drugs, pharmacy co-pay prices which have increased 25%, the cost of milk has increased by 14%, the cost of eggs by 31%, the cost of bread by 14% and the cost of gas by 21% since last year you have to be creative and disciplined to find ways to pay off student loan debt. Don’t give up ““ it is possible to pay off student loan debt. Here are some ways to help with paying off student loan debt:

1. Defer. Request a financial hardship (economic deferment) or forbearance if you are unable to make monthly payments and to prevent losing your tax refund or from your wages from being garnished.

2. Use discounts. Apply for discounts and credits such as linking your Upromise account to your Sallie Mae account which pays down loans quicker by applying a portion of your savings to your Sallie Mae account or get an interest rate reduction for automatic debit payments.

3. Pay more. Send more than the minimum monthly payment, double payments if you can afford it or send at least an extra $10 per month to pay down loans faster.

4. Sell Stuff. Have a yard sale or sell items on eBay to get extra money and use to pay towards your student loans.

5. Get a roommate. Rent out a room in your house to get extra income to pay down student loan debt.

6. Avoid bankruptcy. Don’t file for bankruptcy for federal student loans because they are exempt from bankruptcy.

7. Check your status. If you become permanently disabled or your school closed your loan may be cancelled and you may not have to pay the debt owed.

8. Use consolidation with caution. Consolidating student loans combines your loans into one payment but may or may not provide you with a lower interest rate. Do extensive research before consolidating your student loans. In addition, you may not be eligible for various student loan forgiveness programs, deferment or forbearance if you consolidate your student loans.

9. Avoid late payments. Avoid making late payments on your student loans because it will be reported on your credit report and can remain for up to seven years. Get current on late accounts. Many loans have re-instatement programs that remove delinquent payment history from your credit report after making payments on time for 9-12 months.

10. Choose a repayment plan. Choose a repayment plan: standard, extended, graduated, income-sensitive, or serialization. Find out more at

11. Reduce expenses. Find ways to reduce expenses. You may have to change your lifestyle to pay down your student loan debt but it will be worth it to eliminate stress and worry.

12. Loan Forgiveness. Find out if you are eligible for student loan forgiveness programs if you work as a nurse, doctor, teacher, for a non-profit or government agency. For more information visit or contact your Human Resource department.
You can also sign up for the Sallie Mae Loan Payoff contest. Sign up for the contest to win a chance to get $25,000 in loans paid off, visit here.

Harrine Freeman

Author of How to Get Out of Debt: Get an “A” Credit Rating for Free Using the System I’ve Used Successfully with Thousands of Clients. Harrine Freeman is a speaker, personal finance expert and business owner. She is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company. She also provides personal finance consultations. To learn more about Harrine Freeman or her services, visit her website at For questions about credit repair and personal finance send an email to


like what you're reading?

Start Shopping!


  • Teems

    Oh how I hate student loans… I would need some reeeeal self control to be able to use extra income for student loans.

    To manage things better I simply created a separate online banking account for my student loans. So every pay period, a certain amount is direct deposited and automatically debited from my account.

    This gave me three things:
    —Cheaper interest rates for auto pay in addtion to an interest deduction for every 24 mo. of consecutive ontime payments
    —A peice of mind- everything is taken care of
    —A mental block- from the pain of having to pay salie mae LMAO!! I never see the money put in or taken out . My income has adjusted as if I was making a little less and the loans do not exist. SMOOOOOOOOOOOTH :-)

  • Harrine Freeman

    Hi Teems, thanks for responding to my article. The key is to develop a plan and stick to it.

    Your plan is very good, hopefully others will follow your model. Thanks.

  • Evelyn Guzman

    These suggestions will surely help the students pay off their loan in a less painful manner. All students who have a loan should read this article as it will help them make the right choice on how to approach this problem. There are so many ways to pay off the loan that it could be overwhelming and your take on this has simplified the matter.

    Evelyn Guzman
    Debt Challenger

  • Pingback: Eric()

  • humana insurance healt

    healt cost insurance insurance shield healt

  • Damian Shell

    I need some advice. I have searched all over the Internet yet hear different opinions.

    I am a 35 year old married and UNEMPLOYED black male with NO children.

    I have about $75000 saved ($17000 in a mutual fund and the remainder in savings).

    I have no debt except for $29,000 in student loan debt.

    SHOULD I COMPLETELY PAY OFF THE STUDENT LOAN DEBT NOW or continue making above minimum payments? I have been making $500 a month payments for over a year now.

    Please feel free to email me at and thanks for your feedback.

  • Aaron


    If I were in your shoes, I would try to lower my monthly payments and just stick with it until you find another job. Owing only $12,000 versus $29,000 might be of little solace if you find yourself hard-up for rent.

  • Lisa L. McCray

    All of your advice sounds good in theory but is of no help to me. I had my husband take out a parent plus lone for my daughters collage lone on top of her lone that she is paying off and I would pay off the parent pulse lone with my check then I became ill and after 9-11 2001 my company closed and I have been out off work. So after a number of deferments a $50.000 lone has now become a $80,000 loan with my poor husband paying all the household bills as well as $600 a month to Salie Mae. On top of the fact the daughter the lone was for is out of work once again. So we are paying for a worthless pice of paper. Yes, no one can take back the knowledge she received but it’s not paying the bills.  

  • free stock market

    you’re in reality a good webmaster. The website loading speed is amazing. It seems that you’re doing any unique trick.
    Furthermore, The contents are masterwork. you’ve done a magnificent task on this subject!

  • Epson T0715

    Hello there! I could have sworn I’ve been to this blog before but after checking
    through some of the post I realized it’s new to me.
    Anyhow, I’m definitely glad I found it and I’ll be book-marking and checking back often!