The Supreme Court struck down President Biden's plan to wipe away student loans, and it left more than 40 million borrowers on the hook to resume payments this month. If you're one of them, don't panic. Tackling your student loan debt could be simple if you pick up the right strategies for your situation.
Right now, the average student loan balance stands at $37,720. You could choose an income-driven repayment plan or stick to the 10-year standard repayment plan. We've pinned down three strategies you can use to pay your debt in a reasonable amount of time so you can focus on other financial goals.
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1. Pay more than the minimum
On average, student loan borrowers are stuck with a $337 bill every month. But if you can afford to pay more than your minimum balance, you can knock out your monthly student loan payments sooner than your expected payoff date.
First, determine a reasonable amount that you can allocate toward your student loans every month. Consider taking an extra step to trim unnecessary expenses that are affecting your wallet. That way, you'll have more money to throw at your student loan payments.
Let's say you can tuck away $400 per month. To make it easier, you can transfer $100 from your main checking account to an account earmarked for student loans.
Before you pay your bill, you should call your lender to see if they can apply those extra funds toward your principal balance. This can help you save on interest and pay your loan off faster.
2. Make biweekly student loan payments
Paying a student loan bill more than once a month may be the last thing you want to do. But those extra payments can make life more rewarding at the end of the year. And you don't have to dish out more money toward your student loans every month in order to score a win.
Let's say you're on the hook for $400 worth of student loan payments every month. If you split the bill into two smaller payments, you'll end up paying $200 every two weeks.
When the end of the year comes around, you would have made 26 half payments instead of the usual 12 full payments. That leads to an additional full payment toward your student loan every year. If your lender can help you automate your biweekly payments, that's even better.
3. Earn some extra cash
Adding student loans to your budget after a three-and-a-half year pause may not be simple. You probably picked up other expenses, which is understandable. But now you have to start making room for student loan payments, or you could face consequences later.
Picking up a side gig could help you out. You could do all kinds of things like ridesharing, freelancing, or brand ambassador work. It's even better when you can land a side gig that helps you add marketable skills to your resume. Finding something that aligns with your interests and future goals can make the extra work less of a burden. It could also help you land a better job with an attractive salary.
But here's one word of caution: Taxes. As soon as you start making more money, talk to your tax preparer to determine how the extra dollars might affect you when you file your tax return, to avoid another debt situation.
The right strategy will take you far
It doesn't have to be stressful paying off student loan debt. A few small steps every week can help you trim your debt in less than 10 years. The most important thing to do now is find a strategy that works best for you. The more comfortable you are with your plan, the easier it will be to crush your goals.
