How to Lower Student Loan Debt

Student loan debt can place a heavy burden on young couples starting out.

Student loan debt can place a heavy burden on young couples starting out.

One way for you and your partner to establish good credit habits is to effectively manage any student loan debt you have between you. Choose a loan repayment option that suits your particular circumstances. If you don't earn a high salary, ask your lender about the Income Based Repayment (IBR) program. Federal legislation signed into law in March 2010 offers federal student loan borrowers more manageable loan repayments. If you qualify, you won't have to make payments higher than 10 percent of your monthly salary, and the loans will be forgiven after 20 years.

Pay down student loan debt. Use savings that aren't earning a higher rate of interest than the interest on your student loan. Another option is to invest any savings you have in an account that will earn high yield returns. Then eventually apply the savings and the additional interest it earns to repay the student loan debt.

Consolidate your student loans. In fact, you may qualify for an additional interest rate reduction for consolidating your loans. Talk to several lenders about the available loan consolidation programs before signing on the dotted line. Terms, including the caps on the amount of student loan debt you can consolidate, differ between student loan consolidators. Go with a program that combines all your loans into one monthly payment but at a lower interest rate, which will reduce the cost of borrowing.

Reduce your student loan debt by performing volunteer work. Participate in a program that gives you the opportunity to provide medical or legal services to residents in low-income areas in exchange for forgiving some of the money you owe on student loans. If you have a teaching degree, you may be able to teach for a time in an area that has a shortage of teachers. Other occupations may also qualify you for loan forgiveness. Working for Americorps or Volunteers in Service to America are additional program alternatives. Volunteers for the Peace Corps may apply for deferment of Stafford, Perkins or consolidation loans.

Pay extra on your student loan payments to repay the debt sooner. That way you will be paying back less interest as well. Adding just an extra $5 each month toward your loan will reduce the annual interest you pay. If you have more than one student loan and choose not to consolidate, work on paying off the loan with the highest interest rate first.

Ask your lender to reduce the interest rate if you have your student loan payment automatically debited from a checking or savings account. Lenders may reduce the interest rate on a loan in exchange for monthly electronic payments. Also, some lenders reduce the interest rate on the loan once you’ve made at least 49 consecutive payments on time.


  • When looking to consolidate your student loans, discuss possible terms with your current lender first. If you aren’t happy with the offer, start shopping around for a better deal.


  • While extending the term of a student loan can help make your finances more manageable by lowering your monthly payments, the overall cost of the loan will be much more in the end. If getting a loan extension is still the way you want to go, you may get a 10-year term modified up to 30 years. You may always pay the loan off early should your income substantially increase.

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About the Author

Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.

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