11 Ways to Reduce Your Student Loan Debt


$30,000. That’s the average student loan debt in America. You might be looking at that number and saying, “Yeah, right. I’d love to have only $30,000 in student loans!” For many of us—especially those of who had the misfortune of attending college right as the economy tanked (good-bye easily available federal grants and loans!)—the number is much, much higher.

Student loan debt has become the ever-present dementors of our 20s and early 30s. (So cold. Must. Eat. Chocolate.) A perfect storm of ballooning loan interest rates and tuition costs has created a heavy burden on our budgets, personal lives and spending habits.

Who can buy a house when you’re paying off student loans that are the equivalent of…a house?

It might seem like the military would be the last place to find people in hock up to their eyeballs. After all, the military offers the Post-9/11 GI Bill, tuition assistance, MyCAA, ROTC scholarships…and there’s the ever-present assumption that many enlist right after high school and have no debt. Yet according to a 2008 analysis (the most recent information available), service members with student loans are about $25,000 in debt. We can assume that in those last 7 years, that number has most likely increased. And we’re not even talking about the debt that military spouses may bring into or accrue in the marriage.

We can’t wait for someone to chase off these debt dementors with a well-timed Patronus (nor can we wait for Congress to make sweeping reforms to the student loan crisis), but you can work toward paying off student loans quickly and efficiently—so you’re able to enjoy your hard-earned paycheck and spend the least amount possible in interest.

Here are 11 ways to do it.

11 Ways to Reduce Your Student Loan Debt

Negotiate Your Interest Rate

Servicemembers Civil Relief Act (SCRA) Interest Rate Cap ensures that interest on your federal and private student loans are capped at 6% during active duty. 6% is still hefty, but it’s way better than some of the other interest rates out there. Find out more here.

Loan Repayment from the Military

Offered at the time of enlistment, the Army, Navy and Air Force all offer the possibility of loan repayment help. You can’t choose this plan retroactively, but if you or your spouse is contemplating enlisting, read up and consider this possibility.

Freeze Your Payments

If you’re going to school, you can request to have your pre-existing federal loans frozen. Interest doesn’t accrue during this time, so if you can continue making payments, you’ll be able to hack away at the principle lot faster.

Segal AmeriCorps Education Award

If you have earned a Segal AmeriCorps Education Award through AmeriCorps or Teach For America, you are able to apply some or all of it toward existing loans.

Ignore Dave Ramsey

Dave Ramsey, the guru of all things debt, has this “snowball” plan for getting rid of debt. The idea is that you pay off the smaller loans first, regardless of the interest rate, so that you gain momentum as you pay off your debts.

Related: 3 Signs That Your For-Profit College or University Is Shady

It’s a great idea if you really need an incentive for pushing your hard-earned cash toward your debt. However, if you are already on board and disciplined, you should work to pay off the loan that has the largest principle and highest rate of interest. After all, when you pay off the loans with the highest interest first, you’re helping to reduce the amount of money you’ll pay into your loans over the long term. You don’t want to pay extra thousands in interest if you can eliminate those bloated loans first and fastest!

Budget, Budget, Budget

It sounds like it goes without saying, but make sure that you accurately work your loans into your budget. First, create a monthly budget that incorporates just the minimum payments. Once you know what your budget’s wiggle room is, create a budget that incorporates a payment that is more than the minimum.

Don’t Just Pay the Minimum

Many people assume that because they can’t pay hundreds of dollars over their minimum payment, they should just pay what’s prescribed. After all, it really doesn’t matter—right?

That’s not true. Even a small amount like $25 extra can help you pay off your debts faster. An extra $25 a month means a total of $300 toward your debt in a year. That’s $300 more than you would have paid off had you just stuck to the minimum. And chances are, you won’t even miss that $25 a month once you get into this payment habit.

Pay on the Principle

In order to really chip away at your debt, you need to pay more than just the interest. You need to pay on the principle, otherwise your loan repayment will feel like peddling on a stationary bike: you’re working hard but not getting anywhere.

Fork over the Extra Pay

Make lemonade out of the lemons the military has handed you. For example, if you spouse is getting hazard pay on an upcoming deployment, take that money and put it directly toward student loans. Deployments suck, but you can utilize them to get out of debt rather than just get by.

Have a Side Hustle

Consider picking up a side job that works on your time by selling services or products either online or in real life. Push your profits directly to your loan payments. Make sure you’re not depending on that cash to cover your minimum payment—especially if your profits fluctuate from month to month. Use your side job money to pay above and beyond what you can pay out of your regular budget. Treat it like gravy for your loans.

Cut the Fat

If you’re really serious about paying off your debt quickly, consider eliminating the extras in your budget—birthday and anniversary presents, vacations, discretionary spending. Start by eliminating what you won’t miss (or will miss less) or make reductions in your budget like swapping cable for Hulu Plus. It’s not fun, but it can make a big difference in your loans.

Like anything, you need to have a plan with student loans. These ideas and programs can get you started, but there are many more ways to reduce student loans.

What tips and suggestions do you have to reduce student loan debt?


  1. Just a friendly reminder that not all federal loans stop accruing interest while in school.

  2. I’d also look into IBR.

    I know its hard to gain full employment as a spouse, and I’m blessed to both have no student loan debt and the ability to stay home, but IBR only requires 10 years of govt or nonprofit service and payments of only 10-15% of expendable income (income in excess of federal poverty level for your family size), and since so many military benefits are not included in taxable income it’s very much likely that IBR will be a huge plus for mil families.


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