10 Ways to Eliminate Student Loans (Beyond Paying Them Off)

There’s a traditional approach to getting rid of student loans: you pay them off. Depending on the type of degree you got, that can mean a sizable chunk of your income going to student loans for years to come. Repayment isn’t the only way to eliminate student loans, however. There are other options that offer alternatives. Each program offers different options in terms of how much of your loans it will pay back, and repayment from certain programs is only available for specific types of loans. Here are a few others ways you can eliminate that debt.

1. Teaching: Both Perkins and Stafford loans can be canceled if you teach full-time in a designated low-income elementary or secondary school. You can also arrange for student loan repayment by taking on a teaching job where there is a shortage of teachers with certain specialties, such as special needs teachers. Because opportunities can vary by the school district, a good first step is to contact the local districts to check what’s available. There are also several programs that will help you with loans if you’re willing to move in order to teach, which you can find through the American Federation of Teachers.
2. Peace Corps: Depending on how many years of service you’re willing to put in with the Peace Corps, the organization will repay up to 70 percent of your student loans. The Peace Corps sends volunteers to more than 70 different countries, offering an opportunity for you to see the world. Your room and board will be covered through the organization, but, unlike other repayment offers, you will not actually earn an additional income.
3. Hospitals: Depending on what sort of staff a particular hospital is looking for, it is not uncommon to find that one is offering a repayment plan — in some cases, of the full sum of your loans — in exchange for accepting a job with the hospital. Most commonly, such offers are made for nurses, physical therapists, and occupational therapists, but it does depend on the hospital. Some have been known to extend such benefits to administrative staff as well. It’s best to contact the hospitals in your area directly.
4. Army National Guard: While most recruitment incentives for the military focus on offering scholarships for attending school, the Army National Guard, at times, will offer a student loan repayment plan of up to $10,000 in loan repayment, depending on the terms of recruitment. In fact, Joshua, a reader who’s been at the Air National Guard in 3 different states added that all branches of the military (Air Force, Army, Navy, Marines) have these programs in place for times when they need to fill a position immediately. As these programs come and go, those looking to take advantage should check not only the state they reside in but the neighboring states as well.
5. State Government Employment: Many states offer at least some level of loan repayment for their employees, especially those who are considered to have a lower income. In the state of Maryland, for instance, government employees who earn less than $40,000 per year may be eligible for a repayment program. Your chances for eligibility increase if you studied social work, education, therapy, or nursing.
6. AmeriCorps: In exchange for a year’s service, you’ll receive $4,725 to be used towards your student loans. You’ll also receive up to $7,400 in stipends. The type of work you’ll be expected to handle in exchange varies, but the AmeriCorps program essentially places you in a volunteering opportunity.
7. VISTA: Not unlike AmeriCorps, VISTA (Volunteers in Service to America) offers $4,725 towards student loan repayment. The money is in exchange for 1,700 hours of community service(essentially volunteering full-time for a year) with private, non-profit groups specifically working on the issues of hunger, homelessness, poverty, and illiteracy. However, there is not a stipend available for those VISTA volunteers who chose loan repayment. The VISTA program was actually put under the direction of the AmeriCorps program in 1993.
8. Employment: Some employers have begun offering loan repayment as a benefit. It’s not a particularly common perk, but for certain degrees that aren’t useful in service settings, it can be one of the few opportunities to eliminate your student loans without writing a check yourself. It is possible to negotiate for such a perk, as well, but many employers would be more likely to give you a slightly higher salary and leave you to manage the details of repaying your loans yourself.
9. Non-Profit Opportunities for Lawyers and Doctors: Having grad school loans on top of undergraduate loans can make for a difficult financial position. However, a variety of different government agencies (on both the federal and state level) will repay your student loans in exchange for work. Doctors and nurses can get the entirety of their school loans repaid in exchange for practicing in areas that lack adequate medical care, while agencies like the U.S. National Institute of Health will repay up to $35,000 per year for employees.
10. Loan Cancellation: While eligibility for student loan cancellation is very rare — bankruptcy and disability are the most common reasons — it may be an option for those individuals with significant financial problems.

Of course, the alternatives to paying back your student loans listed here generally aren’t entirely free. In most cases, rather than wanting your money, these options want your time – often a couple of years. It’s a matter of what your personal situation is like: does spending a few years working for an organization that may not be able to offer you a competitive salary make sense in terms of the total amount of loans you have to pay off? If you only have a few thousand dollars in student loans, options like teaching are probably not the best bet. But if you have a higher amount to repay, some of these options start looking a lot better. Timing can also be a factor. While you may be able to find an eligible teaching position where you currently live, it may be harder to take part in AmeriCorps if you are already well past graduating college.

Tips for Tackling Student Debt Responsibly

There are plenty of ways to eliminate your loans beyond those listed here. If these opportunities aren’t a good fit, check with the loan program that is servicing your debt. Most of the individual loan programs, such as the Stafford and Perkins loan programs, maintain information about loan repayment opportunities you may be eligible for and can often connect you to the right resources. Here are a few more tips for tackling student loans responsibly.

1. Pay more than the minimum and/or double up your payments.

Like most other bills, student loans are usually due once a month. Paying a little more than the minimum required amount can help you knock out the debt sooner (use a debt repayment calculator to find out exactly how much) and avoid paying extra interest. If you receive bi-weekly paychecks, you could also set up an additional automatic payment on paydays (even if it’s only a small amount).

2. Find your pay-off date and use it as an incentive.

Knowing it will take you 10 years to pay off your student loans is discouraging, but every little bit of extra you pay into the loan will make freedom day a little bit closer. Create a visual update every time you achieve a new pay-off date, and you’ll find more incentive to keep taking months and years off of the end of it.

3. Use your tax refunds or education credits.

It’s tax season. Are you due to receive a refund or education credit? Instead of spending it, why not use the money to make a large payment on your student loans? The faster you can eliminate a monthly payment, the faster you’ll free up more of your budget year-round, rather than having to wait for your next refund check to have some “fun” money.

4. Take on a side job or apply for your annual raise.

If you’re already working full-time, more work is the last thing you want. That’s why you choose something fun, and only do it a few hours or days a week. When this money is set aside exclusively for paying your student loans, it can quickly make a dent. Secondly, when you get your annual raise, apply the difference to your loans rather than inflating your lifestyle.

5. Consolidate and refinance – with caution.

Consolidating debt sometimes makes sense, especially if interest rates have dropped significantly. On the other hand, refinancing just to get lower payments while lengthening the duration of your loan will only mean paying more interest in the long run.

Ultimately, it’s your personal finance habits that will truly make the difference in getting out from under the burden of student loans once and for all.

How much do you still owe? Can you do anything different today to pay off the debt sooner?

Tagged as: Debt, Student Loans

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