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

by Thursday Bram · 19 comments

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).

  1. 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.

  1. 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.

  1. 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.

  1. 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?

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{ read the comments below or add one }

  • Ross says:

    Been paying diligently for over 15 years, and the loan payment continues to rise, whereas my income has not whatsoever. Thus, I pay MYSELF first and foremost AND ALWAYS WILL, and send them what I can spare when I have it…that’s exactly what I tell Sallie Mae on the phone when they call and threaten. Being responsible is a rough deal, I’m getting closer to retirement age (but will basically have to work forever)! To be honest, I toiled for years making others rich., Taking out maximum loans for two full years off at age 30 to mountain bike, surf, hike, & LIVE, while getting an education was worth it to me. Who gets freedom like that at age 30? Now, back to making others wealthy off my toil…

  • Suzanne says:

    Paying off student loans is currently on topic here in the UK. Recent riots instigated by anarchists objecting to increased tuition fees’s have brought student loans well into the spotlight. Unfortunately there is a section of the UK public who feel they should get things for nothing and this encapsulates student loans; the subsequent increase in fee’s has created chaos. Student loans are only expected to be paid when the applicant begins to earn an agreed amount; the real issue is the lack of employment opportunities for graduates and the subsequent knock on effect this has upon peoples capacity to repay the debt.

  • Florida says:

    I would like to know if any of the above options worked for loans in higher amounts, working in age 40’s, for a graduate degree willing to work in any non-profit or lower income community or charitable setting. giving back to help pay the student loans sounds like a good option at this point in my life.

  • William says:

    Countries that have free education, and therefore now young people living whole lives with debt:
    Saudi Arabia
    Sri Lanka
    Trinidad and Tobago

  • Elizabeth says:

    I have been out of the professional field for a while ( really a while!)I have no Job, Everything is so competitive and it makes it even harder if you don’t have a recent experience or job history, so that bring to : How can i get a student loan in order to upgrate my skill?.. I am in late 40′ and even thought my degrees had been earned out of the country, they have been already evaluated and accepted in the US.

  • Charlene says:

    My student loans are rather high; around $90,000. I make $51,500 per year at my current job. I really would like to repay these loans, but sincerely, cannot afford to. After taxes and health insurance is taken out, I make $1450.00 every two weeks. I absolutely cannot afford to make a $800 to $1000 per month payment. Any suggestions?

    • Cathy says:

      Check out DaveRamsey.com and get his book Total Money Makeover (try the library). He recommends never borrowing for education in the first place, but if you do, there is a way out. LOTS of folks repay their student loans aggressively using his suggestions (living real cheap, selling things you don’t need, getting extra job….). My daughter and her husband have done this; they are 23 and 26 yrs old and are debt free! His website has lots of personal stories that can be quite encouraging.

  • marve says:

    Hoping I can find some answers here, My husband went to volunteer in peace corps for at least 3 years after grad school at that time his student loan is only $45,000 .Decemeber 2010 his service was done and went back here in the US and find out that his student loan went up high $60,000. He tried t check for some help because he serve in peace corp for at least 3 years but to his dismay he did not get any. So by Jan 2011 he got a job for a non profit and start paying his student loan $653.01 a month since then he never missed any payment and since he did not make a lot of money he live very cheaply. On 2012 we got married and now have 2 kids we are still paying it same amount and did not missed payment . Is there a way that this loan can be consolidated or have a little help . He is still working for non profit org.

  • Samantha says:

    When the UK government talk about student loans, they always assume that graduates will either walk straight into well paid jobs or they will be unemployed. In the first instance, the employed graduate will be able to comfortably afford to repay their student loan. In the second instance, the unemployed student will not be required to repay their student loan until such time as they are in employment. But the truth is, for those graduates who are lucky enough to find a job, the pay is usually just above the threshold above which their student loan becomes repayable. The repayment is deducted at source and a rather measly salary suddenly becomes a minimum wage and results in a struggle to survive alongside the struggle to establish themselves in a career.

  • Candy says:

    I feel every ones pain at this time. I’m having a hard time landing a job in Medical Billing/Coding(Went to school on a student loan/ Sallie Mae) and now they are at my door. I find that no one will hire unless you have at least a year or more experience, so now you feel that the added education you recieved that is part of your career disipline will never pan out and now you feel like you are paying for an education that will inprove your bottom line. So where do you go from here?

  • Kevin says:

    This is an amazing list .

    I would like to tell every student that is going to get a student loan to talk to their financial aid office first . There are always several scholarships and loan payment offers available per school from many programs.

  • Cd Phi says:

    It’s best to consider all your options so this is a great list of things that will allow you to really help out someone else while also getting your student loans paid off. I know a friend who is going into teaching and because she has agreed to teach a low-income secondary school for a set number of years, they will cover her tuition costs for her Master’s in teaching. That’s not a bad offer considering the fact that she was going to be a teacher anyway so now she racks up the experience as well.

  • Kristine says:

    Good value with your article. Sometimes people just need the information to help them along. College debt can be the next biggest debt one has to pay off next to a mortgage. It’s too easy to go into college debt, and can be difficult to get out of it without a plan.

  • Jan says:

    I had to take over $7000.00 loan in my daughters first year of college. they said that because of the money I had at the time, I had to make this contribution, this was w/ Sallie Mae.. ( this money was from her fathers life insurance policy, he was killed about 6 years before in a car accident, it was not from income that I was incurring). By the time it came to repay this loan, I had declared bankruptcy, lost my home, not had a full time job, nor made more than $8.00. Of coarse I was allowed to defer and have not had to pay because of my circumstances. in the meantime interest has accrued and the loan is now over $17,000.. I am over 50 years old and unless I win the lottery, I do not see how I will ever repay this loan. Of course this has ruined my credit and my hands are tied. How can this be fair, I did not receive this education, I will never benifit, but I will always pay for not having money.


    • maria says:

      I am in the same situation, only that my loan is now 37,000.00 I will consult a loan negotiator and see if they can help me to get a debt reduction with the collection agency. let me know if you have any other solution idea..

      • Nichole says:

        I am just curious Jan – why isn’t your daughter paying this loan off? After all, this loan was for HER education right? In my opinion, now that she has graduated she should be repaying all the loans it took for her to get an education.
        Sorry, I went to college and didn’t ask my parents for a dime. I got scholarships and st. loans, and now that I’m through with college, I am paying them back. Big girl panties time.

  • Sandra says:

    I still have a ton of student loans to pay off, and people who don’t have to take out loans to graduate never realize how much burden it actually causes to your budget.

    Thanks for the article. Some of these alternatives seem like a good option if it’s almost a guarantee that I can start fresh in a few years.

  • Kate says:

    I was lucky enough to get through school without taking out student loans thanks to my grandfater, but have many friends who still struggle to pay off their loans 12 years later. Great article, many people do not realize these programs offer assistance.

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