This is a bit awkward… I never went to college. But I am surrounded by the countless friends and relatives who are fighting this ever-crappy commitment of paying off student loans.

Now, this shouldn't be that difficult if you're one of the 7% of people who actually graduated and found a six figure career. But for the rest of America, school debt, and the realistic means to pay it off, are little more than a mere desire.

As of 2012, school debt not only beat out mortgage debt at $1.08 trillion, but a whopping 11.5% of it is more than 90 days delinquent or in default. This is the highest delinquency rate among all forms of debt and the only one that’s been rising consistently since 2003.

pastRelated Article: 4 Rules For Becoming Debt Free by Age 30

So how do you get rid of it? There is no magic ticket, especially because every person's story is very different, but there are a few strategies people can adopt to knock giant chunks out of this burden. And remember, $20,000 of school loans is actually more like $63,000 over 20 years. The sooner you pay this off, the less money you'll spend.

1. Prepare to Sacrifice in Order to Meet Your Goals.
Debt sucks. But you made this decision. I had $20,000 in debt before I was married. Almost all of it from stupid decisions and for things I did not need. But my golden answer was the commitment to pay it off. I broke out the whiteboard and figured out ways to do two things:

#1. Spend less & #2. Make more

From baby sitting my neighbors kids and intense recycling to hard labor on the weekends, I began to make progress. I also shut off my cable, lowered my cell phone plan, never ate out, asked for rides everywhere I went, moved my car insurance to “liability only”, sold everything I could on Craigslist, asked friends to donate things I could sell on Craigslist and even wrote emails to family during the holiday season to explain why I would not be sending cards or gifts.

2. Trade Your Employer A Lower Salary For Help Knocking Out School Debt.
A little secret in the corporate career world is to negotiate a job with a compensation package that includes a monthly or one-time stipend toward your school debt in trade for a lower salary. This will likely require a time commitment on your end, but you'll probably be there anyway. And this doesn't only appeal to large companies either. Many small and medium companies can't afford the salaries for the talent they need. So offering to take a lower wage for a large one-time payment toward school loans, is very possible. It's a write-off for the company and typically costs them less in the long run.

3. Start a Side Business, You Can Do This. 
You're a smart person. You have a college degree! There is no reason you cannot start a business. It doesn't have to be big. It could be an Etsy shop selling beanies and soap you make at home. You could start consulting people in the area of your degree. You can organize a paid monthly meet-up for the hobbies you love (15 people at $25/m = $375 per month). Whatever it is, you can do it. And if you could make just $350 per month (which is nothing!) this option alone would pay of your loan in five years.

Lastly, if you know me well, I love to include infographics. I found this while researching for this article and thought you might enjoy it.

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Do you have any tips on paying student loans? Let me know in the comments below.

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57 thoughts on “How To Pay Off Student Loans in 5 Years

  1. Jo. S says:

    As always, thanks for the informative article–it is greatly appreciated. As I get ready for grad school in a couple of weeks, the information that you’ve provided in this article motivates me to think “outside of the box” in terms of looking for some creative ways to lower my debt from my undergrad years. Thanks!

  2. LaRee says:

    I’ve recently spent some time researching student debt, and its effects upon those incurring it. what I found is that a lot of the time students accrue larger amounts of debt than they actually need to pay for school. I encourage students to sit down, create a budget for schooling costs, and only take out what is necessary to pay for the fixed costs of schooling. it’s crucial to understand the terms of the loan, the difference between private and federal, interest rates, repayment plans, etc. I believe it’s time our conversations change to start addressing this student population before they find themselves in $25000 worth of debt without a solid income to accommodate the cost. I fully support continued education, as I work as an advisor in a large university, have a BA and am currently working on my MA – however, I am proof that it is possible to earn an education without excessive loans weighing on my financial peace, and, no, I did not come from a wealthy family. quite the opposite, actually.

  3. Elliot says:

    I think every student should sit down and have $100,000 in cash in 20 in front of them so they can see how much money that looks like. Then they can decide what they want to do.

  4. Caitlin says:

    SO interesting. I was blessed with parents who saved and saved and saved so they could pay for my college education (and the college education of my two older siblings), so I’ve already started saving for my own kids’ college education. I don’t plan to have children any time soon, but it’s going to take a while to save up, so I’m starting early!

    • Dale Partridge says:

      Haha good plan Caitlin! Start thinking outside of the box now, so you can pass that on to your kids as well πŸ™‚

  5. David Ramos says:

    This is great. I love higher ed and strongly believe in its mission – even though I know its gone way off track in so many ways.

    I decided last year to take time off from my Master’s program so that I could eliminate debt and go back in a couple years when I can pay for the classes upfront.

    I regret not making better financial choices, but I don’t regret the challenge and opportunity of college.

  6. Michelle says:

    There are several ways to lower college costs before you even begin school. Many students in HS are encouraged to take it easy and have fun their senior year but with some planning and hard work you can earn credit before you even go to college. Most HSs or junior colleges offer dual credit classes. These are classes which are taken your senior year that give you both HS and college credits. Usually they are taken at the junior college but by the time my third child was a senior they were offered at the HS dB campus. There is typically a fee involved but it is signifigantly less than tuition costs. Secondly in HS there is also an opportunity to take AP (advanced placement) classes. Yes the ones the brainiacs and nerds are in. At the end of the class you can sign up for the AP exams. You will need to score a 3 or above in order to be able to recieve college credit. Each college sets their own criteria for what scores they take. Using these methods my oldest had 21 hours of credit before his first srmester, the second had 24 hours. Thats about a years tuition each; all for about $700.
    Another option is CLEP testing. So if you do well in a particular subject sign up to take the CLEP test for it. Its a placement test that is offered by the college. You pay for it, $80 and up. But depending on how you score you can place out of classes. For instance my daughter took the math CLEP test and placed out of 2 semesters of college math all for $80. And you don’t have to be a genius to pass the test.
    Lastly there is an option for reducing your payments that alot of people dont use. Its called Income Based Repayment or IBR. It takes effort on your part but is worth the time. You will have to apply for this option yearly and will need to submit your tax return along with the form. Basically they take your income and expenses (rent, car payments, other student loans, living cost and family size into consideration and determine how much you should be paying for your loan. In some cases the payment is reduced to $0. And this keeps your loan status current and i believe does not length the term of your like a deferment or forebearance does. You will continue to accrue interest but have the option of paying the interest only once a year so as not to increase the loan balance. You will need to apply every year and the payment will change based on your current income and situation. The best advantage is that at the end of the loan term, say 20 years, the balance that you owe is forgiven. Yep, forgiven. The catch is you will have to pay taxes on what is forgiven but it will still be less than the loan amount. Youcan live more comfortably in the meantime. Not sure how the tax part works, havent gotten to that point yet.
    One more thing be smart about the degree you chose. Make sure it is a viable option. Dont think there are any job openings for philosophers out there. Know the job market and choose accordingly.

  7. Hannah says:

    Yet another confirmation of why I won’t waste my time going to college. All that extra money you’ll make in your career from having a degree just goes toward paying for said degree all throughout your best years. I don’t know about others my age, but I have no interest in being trapped under a mountain of debt until I’m too old to really live my life.

    • Dale Partridge says:

      Love this Hannah! This is when you know you’re thinking outside of the box. Never stop learning and growing, but find mentors who will show you how to make a living doing what your heart desires. The common misconception is that you must go to college to become educated, and that is just simply not true. Good for you πŸ™‚

    • abby says:

      That’s great for you if you do not wish to receive an education. For many, higher education isn’t just about the money it will earn but about quality of life and the ability to pursue the kind of jobs you want. It definitely isn’t a waste, it’s just expensive πŸ™‚ I’m happy that I have been able to enjoy obtaining an education, and then work toward a career that interests and invigorates me. I think many others feel the same way, regardless of how much money they end up making in the long run.

  8. Israel says:

    I’ve leanred not to take out the maximum amount of loans that I was approved for. Only what I need. Otherwise I spend it on stupid stuff. πŸ™‚

    • Dale Partridge says:

      Haha it’s easy to impulse buy, but sounds like you’re learning how to discipline, which will take you far in life. πŸ™‚

  9. 20smthngWF says:

    How depressing. As recent grad with a doctor of physical therapy degree, my debt is twice my yearly salary. And I took the minimum, never ate out, worked up to 40 plus hrs/week when I could, lived in the cheapest, crummiest apartments…. And some classmates are in debt over 5 times our starting salary. There is no way we will ever pay it off.

    • Dale Partridge says:

      Wow. Unfortunately I hear stories like yours all the time and it really is heart-wrenching as I can see the hopelessness in people’s eyes. Keep thinking outside of the box. There is something you have to offer that people need. Search for what that is. Consult, or even start a business. I would also recommend Dave Ramsey’s Financial Peace University to help you manage your money. It’s incredible. You can do this.

    • Andrea says:

      I don’t know what specific field of PT you have gotten into, but you should look into the Public Service Loan Forgiveness program and see if you meet the qualifications. After 10 years of consecutive monthly payments, your outstanding student loan debt will be forgiven.

  10. Sebastian Daniels says:

    I have two friends who are in over 100k debt. They are burdened it for years to come. It will hang over their heads and it will not allow them to take creative risks in their lives. I think these are good tips. Some people graduate with thousands in debt and can’t find a job. I imagine that would be stressful. I am thankful I do not have any debt, but I can imagine how crappy it would be.

    • Dale Partridge says:

      You are a minority, Sebastian! I’m so grateful not to have any school debt either, but it breaks my heart to see how overwhelmed it makes so many of my loved ones.

      • Sebastian Daniels says:

        Yep and I am so grateful for that. It does suck for so many people and it is hard to see my friends with it. If only I could with the lottery and then I could pay off their debt hehe

    • abby says:

      I graduated with well over 100k of debt and will be finished paying it off within 5 years! I didn’t get a super high paying job after graduation, I have just prioritized making more than the minimum payment each month. I do agree that having debt hinders your choices somewhatβ€” but that is a short-term problem; I was able to receive a fantastic education that was a huge adventure, and for the 5 years post college I am ok with having a few less ‘risky’ options available to me for the sake of being free financially. Just trying to offer a more positive perspective that it IS possible and to many people it is more than worth it!

      • Sebastian Daniels says:

        Thanks for the more positive side. I just hear the people in my life complaining about it, so I assume it sucks. I know I wouldn’t be too happy about it personally. That is truee that it is a huge adventure and you experience many things in college and grow in many ways. Hopefully you were able to study abroad. That was one of the best experiences I had.

      • Guest says:

        Wow, Abby, that is awesome!! I will be well over that amount as well, and I am willing to do just about anything to get it payed off that quickly!! Do you have any tips/advice for how you did it? Did you do it by yourself? Or is that too lofty a goal to set when you are going at it alone?

  11. sandisa says:

    I’m in South Africa but trust my friends have the same problem. I sometimes feel that better off as college drop-out.

  12. Andrea says:

    An easy way to cut down on any interest-bearing debt is to break the monthly payment into smaller weekly payments. I have done this with a car loan, which I paid off a year and a half early, and with student loan debt. You may notice you’re due date will become “pushed back” because you are reducing your interest a lot faster, so more is being paid on the principal, which then adds up similarly to a pre-payment for months into the future. When you see your payment due date is a month or two into the future, don’t skip any payments. Keep making your weekly payments. If you skip a weekly payment the interest continues to accrue daily.

    Also, depending on your profession, you may be eligible for the TEACH Grant or Public Service Loan Forgiveness which will reduce the amount of debt or number of years you will pay on your debt.

  13. Created Well says:

    I love this. Yes, it takes a lot of commitment, but my fiance and I are trying very hard to change our financial decisions so we can leave a financial legacy for our children, so we can live well off of a percentage of our income, so we can give freely to those in need, and be debt free! Student loan debt is like a monster-in-my-closet. I throw a few hundred dollars at it every month so it stays quiet and doesn’t haunt me in my sleep. But I HATE it. And my sweet fiance (with a financial past as scary as most other college graduates) has ignored his loans for years(good ol’ fed loans). It’s not worth it. One of the other things we are NOT doing is forcing our kids to go to college, nor are we going to pay for 4 years for them. We want them to invest financially in that part of their life because it means more, and we’d like them to be older before they decide what they are going to spend thousands of dollars to learn about. Anywho, we are always looking for get-out-of-debt tips – thanks so much for this!

    • hannah says:

      Depending on how much money you make when your children leave for college, they could end up having to pay full price and if the cost keeps rising they could be faced with HUGE amounts of debt. My parents set aside $20,000 for me, which made a world of difference when paying off my debt myself. I totally agree education shouldn’t be paid for entirely by the parents, but if you are expecting them to cover the entire cost on their own you could be setting them up for failure.

  14. abby says:

    I took out a significant amount of student loans to pay for college (even with scholarships, some financial assistance from family, and a part-time job there was no way I could afford to pay without the loans!) and for the sake of encouraging others in a similar position, I am incredibly glad for the education that I received and it was worth every penny to me. I am now two years out of college and close to halfway through paying off my debt, so a 5 year goal seems reasonable. The tips you have written about here are great, but for me, in order to pay off my debt I adopted one simple strategy: while others graduate college and perhaps travel or get an internship, I knew that my priority HAD to be finding a job (with reasonable relevance to what I want to do in the long-term/ salary, of course) that paid well enough to make loan payments (not necessarily super high paying, but a job that will meet your practical needs.) I knew that I might need a smaller apartment and a roommate, or to live without a car, or to buy less stuff in order to meet this goal. At the end of the day, I would way rather have my education than any material possession or physical comfort! I have a pretty decent balance, I like to think; I still eat out, travel, and buy thingsβ€” and I am also paying for a graduate degree out of pocketβ€” but I spend according to a budget and with the knowledge that my loan payments are my first financial priority. Frankly, I have many friends who are still working on their undergraduate degrees because they have been trying to pay out of pocket, and while I admire them (by no means do I judge that choice) I’m not convinced that they’ll be better off financially in the long run. Needless to say, there aren’t a ton of great options for anyone whose parents can’t afford to pay for their schooling, but the solution is absolutely NOT to avoid getting educated if you so desire!

  15. Jaqueline says:

    I think Abby has a great perspective. There is really no price someone can put on a good education. How disappointing that this ‘positive’ web site is essentially ‘bursting the bubble’ of those that want to receive a better education and pursue their field of study (and seemingly encouraging people to NOT go to college). The loan reality can be overwhelming (especially if young people read the chart posted here! Can you say Anxiety?!), but it also can be manageable in many ways. Having a huge amount of debt is a burden, but it also encourages these young, bright people to work hard to pay it off. If someone chooses to major in a field that will not be lucrative in their future, that is a big mistake, but an education is the only thing that will get you into many (high paying) and lifetime careers. These careers are very fulfilling to most, and therefore are worth every penny of pay back on a student loan.

    • justagirl says:

      college IS worth it….but schools are price gouging us.. some schools offer little return… and the awareness of that is driving change. schools are starting to be rated for their tuition cost/graduate employment… every private school does not cost 45k to run! theyre charging what the next guy charges because they can…..this has to stop. these schools are exploitive and greedy.

  16. Jana @ 333 Days of..... says:

    I have two sons who were able to get through college without debt-one did it by doing ROTC (40,000 a year private college paid for by the Army) and the other stayed local, lived at home and went to a state school. They are both happy with their decisions. State school was $6000 a year. The later also accelerated college by going to community college, taking summer school and graduating early.

  17. Grace says:

    I was very fortunate and had a college fund that my parents started for me when I was born (my dad is an accountant). I would definitely recommend trying to save and contribute some money to your children’s educations. I still worked throughout college, and went to an in-state University in order to stay debt-free and it has made the transition to the working world so much easier, and I didn’t have to panic when it took me 1.5 months after graduation to find a job. I know most people here are still worrying about there own debt, but even just putting away a tiny bit every month starting when your children are born can make a huge difference in there life.

    • Brittany says:

      My mother was a single mom with four kids, putting away money for us for college wasn’t an option. I took out my own loans to pay for my education and I worked my butt off knowing I had to pay it all back. I now am a mother of a 3 & 5 year old, we are active duty military (so we aren’t Rollin’ in the money either haha) and as much as I would love to hand them their education- I won’t. My kids will understand the meaning of working for their future, and hopefully knowing it’s hitting their pockets means they’ll take it seriously. I think the sense of entitlement is a huge problem in this country. I’m by no means ragging on you for your POV, just want you to see another perspective other than the hand out method.

  18. Silvia Aldredge says:

    One great way to avoid student debt is not to incur it in the first place. If you can complete your general education requirements at a community college or other smaller, less pricey school, in two years and then apply to complete your degree at a four year college debt load will be much less. Truthfully, the four year private college model is out-moded and far too expensive for 90% of American families, especially those with more than one child.

  19. steams17 says:

    5 years is rather ambitious when you’re sitting on $135k from law school. 10 might be a more realistic number. And please remember – just because someone is a lawyer, doesn’t mean they make six figures.

  20. Daniel Gonzalez says:

    I guess you could say i fell into that trap of achool loans. Oh well my focuz now should to figure out how to pay it off. These tips were extremely helpful, especually the one about taking a pay cut and having your job pay a nice chunk off ones dept. Opening my own business will more than compensate for the decrease on my regular salary. I have one more year left for my under grad so these tips will help me get ready before i graduate. Thanks for these tips.

  21. Amanda says:

    My student loan debt is around $35k and something that weighs heavy on me daily as a soon to be 24 year old. I pay on them monthly and I can’t help but think about my future and articles like this are incredibly helpful putting things into perspective for me.

    I have recently purchased and will be following Dave Ramsey’s financial peace plan. I am fortunate to have a full time job that pays decent for my age but I loved the part in your article about starting a side business (something that has always interested me) but have no idea where to begin with that. Maybe even a part time gig on weekends would help.

  22. Joni says:

    Hello all. I don’t know if this will help or not but I thought I would throw in my two cents. I work at a Junior College in California. I recently found out from a co-worker that I could obtain my Bachelors while taking courses at my Junior College. How does this help? Well for starters classes are cheaper at my Junior College or Community College. In California we also have something called the BOG (Board of Governors) fee waiver. Fees for classes are waived for those who income qualify. All you have to do is speak with a counselor at a 4 year University near your Community College to see which courses would be accepted for your Bachelors. You may still need to take a few from the University but you would walk away with a lot less debt. πŸ˜‰

  23. Lady Mia of Alpharetta, USA says:

    Wow Dale! You are so big for sharing that you did not go to college! I need to finish (I am in my late 30’s), but learning this about you makes me feel like I can still contribute positively to society even though I don’t have papers…so to speak…Jesus Blessings Dale & Fam!

  24. Beth says:

    I graduated with $80,000 in student loans (not including my parents’ plus loan) and I was an in state student at a public university. My degree was 5 years but 1 year was a co-op so my tuition was only $900 per semester during the co-op. Then after I graduated it took me 2 and a half years to find a job in my field.

  25. John says:

    As a 19 year old about to attend a private college I was worried about my debit that I will accumulate while there on loans. My parents were never able to save up for me and my 15 year old brother and are just now being able to do that for my 2 baby brothers. I did want to go to the military but it never worked out. The debt is the scariest part because both my girlfriend and I (who I plan to make my wife’s after college) are going to the same school on some loans. She is going to be a teacher I’m going to be a youth pastor neither one of those jobs makes 6 figures but articles like this really help. As a young man finances are something I am ill equipped to deal with. It’s been a fear of mine for the past year or so trying to figure out what kind of life I want and what God wants for myself and my girlfriend. Thanks for the tips Dale.

  26. Chappy Cottrell says:

    As a 21 year old about to graduate from a public institution with almost $30,000 in debt, I would encourage graduating high schoolers to think really hard as to WHY they need a degree. I have learned more over the past four years by listening to people like Dale, Lewis Howes, Jason Zook, Inc. Magazine, and taking classes from them. Additionally, it is cheaper to take classes via Udemy, Coursera, General Assembly, etc. than a university, and you gain practical skills. Thanks, Dale Partridge!

  27. Ashly says:

    My advice would be to pay on your loans while in school, weather it be 20 a week-anything is better than nothing! The sooner the better. Try to direct these funds towards unsubsidized loans if you have them, less principle=less interest. Determine a time frame of when you would like to pay off the loans and set out a plan to do so.

  28. jeff says:

    Im sorry but this author sounds kind of pathetic… “rides everywhere, ask for handouts, and no gifts to family.” I want to pay off my loans too but not at the expense of living an independent life, which a man should live!!! Take a few more years to pay it off and drive yourself!!!

  29. Joe Kazan says:

    Student can give extra payment when they can. It will help them to less their student loan. You should submit some extra payment when you earn extra income.

  30. Hannah says:

    Please never ever ever change your car insurance to liability only. That is truly terrible advice.

  31. Mick says:

    Never going out, working weekends, no car, no tv, no fun! Sounds like a good way to completely WASTE your 20s, the golden years, your last years of youth. I’d rather be 30 and living a whole life than 30 and friendless, lifeless, albeit debt-less.

  32. Erin's Inside Job says:

    I have 200K in loan debt and I have no idea how I will pay it off. I qualify for income based repayment, but since I make so little in relation to my debt I owe $0 each month. After 25 years the remainder can be forgiven, but I don’t like the idea of just mooching off the govt and having the weight of that on my shoulders. I’m trying to grow my blog so that whatever money I make there I can start paying towards my loans, but I have no idea if I can even pay it all back.

  33. Nolan Hughes says:

    I graduated a top 30 public university in December 2013 with $27K in debt ($1.3K in accrued interest). I started paying back in May, so far I have paid back $7,500 (but only $5,400 went to the base principal). Essentially I started off with $3.359 per day in interest and now I am at $2.354 per day in interest. It took me till April 2014 to find a job, issue was at that point I was still going down the pre-med route and took a crap job as a Nurse Aide at a nursing home for just $11/hr. I worked there for two months and had enough of the graveyard shift. And for the last 9 months I have been working as a Laboratory Technician Analyst at a pharmaceutical company, pretty much the only job someone with a Bachelors Degree in the Natural Science field can get after college. I make just $35K a year and that really is the going rate for those with a recent Natural Science college degree.

    I pay $600 a month on my student loans. I make just $1,100 a paycehck (about $2,300 a month).

  34. MH says:

    I owe $118k in student loans. It’s really challenging to pay but I’m doing my best. My salary is $42k and I put a little extra towards the loans every month. I’ve almost paid off the smallest one. We also have a considerable amount of consumer debt that we’re making a priority to pay off first. Our goal is to get rid of $10k/year. Hopefully once we do that (and don’t add anymore large debt), we can make a serious crack at paying down the student loans more aggressively. I work a side freelance writing/editing job as well and it has helped us make ends meet. I pay almost $600/month towards loans.

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