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9 Ways to Reduce Your Total Student Loan Cost

No one wants to pay more for their student loans than necessary. Think about these numbers:

  • 55% of students took out student loans and graduated with an average of $28,400 in federal and private loan debt.
  • Americans owe almost $1.75 trillion in student loans, which is more than car loans.
  • The average graduate pays a monthly payment of $300 on their loans.

Being locked into a $300 monthly payment for 10 years or more does not sound like a good idea. So, let’s look at ways to reduce your total student loan cost.

Here are nine tips and strategies you can use to reduce your total loan amount.

Prepay Your Student Loans

You can start a student loan repayment plan while you are still in school. Simply start making payments towards your loan balance to bring the total down. This may be particularly effective because many loans do not start collecting interest while you are still enrolled.

Pay Every Monthly Payment on Time

Paying your student loans on time makes sense, just like paying everything else on time. However, a late loan payment could mean your loan costs more. Some student loans charge higher interest for missed payments or extra fees could be applied to the loan balance.

Use Automatic Monthly Payments and Get an Auto Debit Reward

Some private student loans and even federal student loans have automated repayment options through an ACH (automated clearing house). These can offer a discounted interest rate, which will save you money on your loan. If you can use automatic payments, then do so, but make sure there is always enough in the account to cover the payment.

Refinance Student Loan Debt at Lower Interest Rates

If you can refinance your student loan at a lower interest rate, then you could save a big chunk of money. Refinancing student loans may be possible when you are buying a house or after you land your first big dream job. The key is to secure a lower interest rate and avoid extending the term of the repayment plans if possible.

If you have multiple loans, then refinancing them could also give you an opportunity to consolidate student loans into a single payment, making it easier to manage their repayment.

Try for Scholarships and Grants Before Private Student Loans

Scholarships and grants do not have to be repaid, so they are obviously going to be less expensive than student debt. So, apply for scholarships and search for grants. Ask for help from the financial aid department. Every penny you get from one of these sources is money you’ll save later on in student loan payments.

Maximize Your Federal Student Loans First

Federal loans are more likely to have lower interest rates, qualify for loan forgiveness programs, and offer some form of income-driven repayment plan. So, look for federal loan options first. These may give you more options after graduation if you need repayment assistance.

Make Payments Every Two Weeks

Instead of making a single student loan payment every month, split the monthly payment in half and pay it every two weeks. It will feel like the same amount each month, but the clever math will help you pay off your student loans faster. Here’s how it works:

  • In a year of monthly payments, you make 12 payments of $300, thus paying off $3600.
  • In a year of bi-weekly payments of $150, you make 26 payments for a total of $3,900.

The difference might seem small, but you could shorten your loan repayment by more than a year by doing this.

Round up your monthly payments

Another easy way to make more student loan payments is simply to round them up to the nearest $50. If your rounded up payment is an extra $25, then you may be making an extra payment every year at very little pain per month. Doing this can help you repay your loans early without feeling too difficult.

Make one extra payment each year

The previous two tips were also focused on helping you make an extra payment. If you think about an annual payment, then there may be times when you have some extra funds to make an extra payment. For example, your work might pay an annual bonus or you might get a tax refund. Both are good options for making an extra payment. Doing so will help you save money because you will avoid paying some interest.


You could also look at an extended repayment plan, a graduated repayment plan, income-based repayment, and student loan deferment. These may extend the length of your repayment and be more expensive. The Covid-19 pandemic also brought some student loan forgiveness plans. If one of these is available to you, then it could save you money. There may also be option in bankruptcy to assist you. A Florida bankruptcy attorney can discuss the relationship between student loan debt and filing for bankruptcy.

The best way to save money, though, is to get grants and scholarships if possible, start paying your loans soon, and pay a little extra if you can do so.

Contact a Florida Student Loan Attorney

If you find yourself with less income than you anticipated and unable to keep up with student loan payments, you can contact our student loan attorneys for a free evaluation at (954) 922-2283 or fill out the form below.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More

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