An estimated 43.5 million Americans owe a whopping $1.78 trillion in student loan debt today, with the average borrower looking at a balance of $37,338. And the longer you delay paying off your balance, the more interest you'll end up racking up over time.
Most people opt for the standard repayment plan, so they can knock out student loan debt in 10 years. But it's possible to speed up your payoff timeline if you make a few simple moves. And if you're focused, you can shed at least $10,000 before 2030.
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Start with the numbers
Before you start chipping away at student loan debt, make sure you understand your numbers. Your student loan debt number is a big deal, but it's not the only number you should focus on.
Here are some questions you should consider answering to get a better idea of your financial picture and your potential action plan:
- What is your monthly income?
- What are your monthly expenses?
- How much money do you have in your emergency fund?
- How much money do you owe in credit card debt?
- What is your monthly student loan payment?
- What is your student loan balance?
- How much money do you have left over after you pay your bills?
Figure out your student loan goals
After you jot down the numbers, then start thinking about your goals. For example, let's say you want to pay off $10,000 in student loans by 2030.
You could sign up for a standard repayment plan instead of an extended or income-driven plan. With a standard plan, you'll end up paying less in interest and get rid of debt faster. This plan is designed to allow you to pay equal monthly payments for 10 years so that you can wipe away your debt.
Based on your goals and your current monthly payment, you'll then calculate how much extra money you need to pay toward your student loans to knock out $10,000 in less than seven years.
But don't forget about other financial essentials, such as building an emergency fund and paying down high-interest credit card debt. You want to have at least three to six months' worth of expenses tucked away in an emergency fund, so that you don't have to use your student loan money to pay for other expenses that may arise.
Pay more than the minimum to get maximum results
Student loans have been on pause since 2020, so you're probably not anxious to start adding payments to your budget again. But if your motivation is low right now, think of it like this: The faster you tackle student loan debt, the faster you can start crushing other financial goals.
Let's say your monthly student loan payment is $337, which is the average amount that borrowers pay. If you add an extra $100 to your balance every month, that adds up to $1,200 additional dollars toward your student loan payments every year. After six years, that extra $100 per month turns into $7,200.
If you break it down even further, an extra $100 per month is only $25 per week. Even better, an extra $200 per month would allow you to pay $14,400 toward your student loan balance in six years, which is only $50 per week.
Now, all you need to do is figure out how to earn an extra $25 or $50 per week. Maybe you can put in a few extra hours at work every week if you earn an hourly wage. If you get a raise or bonus at work, you can put the extra money toward your student loan goals. Or you can explore the gig economy, and look for side hustles that align with your skills and interests.
Shed your student loan debt with ease
Paying off $10,000 in student loan debt by 2030 is a lot easier than it sounds. When you review the numbers, it might mean adding an extra $100 or $200 to your monthly student loan payments. If you have to pick up a side gig to make it happen, you can find something you already love to do.
With a strategic plan, you won't have to sacrifice other short-term goals to pay off student loan debt. And soon, you'll be able to free up more cash so that you can start putting money toward other goals on your bucket list.
