The Best Student Loan Debt Reduction Strategies
If you’ve recently graduated or are about to graduate and you look at the mount of debt school cost you, then you know the feeling of your gut dropping. Using these fast student loan debt reduction strategies, you’ll be able to take the weight of your debt and lighten the load. These aren’t quick fixes, and they all take some effort, but they are worth your time and energy.
Student loan debt reduction doesn’t have to be complicated and it certainly isn’t unobtainable. If you stick the course and make these changes your debt can be completely paid off in a single year (depending on your situation).
What is the Average Student Loan Burden?
Some college graduates are lucky enough to graduate debt free, but the majority of us will graduate with thousands of dollars in student loans. You’re not alone in your mountain of debt. The average college student’s debt in the United States in 2025 is $29,300, according to NerdWallet, and the total student loan debt in the United States is $1.77 trillion.
Talk about the first trillionaire… It’s the debt collectors.
Maybe you have less debt than that, or maybe you have more. Whatever you situation is the next section will breakdown how to reduce that debt to zero!
How to Pay Off Student Loans Fast
The following part is broken into two different sections student loan debt reduction strategies for graduates and student loan debt reduction strategies for students still in school.
Depending on where you are in your debt journey may change what debt reduction strategies you need to use. If you’re still in college you can skip down to Part 2: Student Loan Debt Reduction Strategies for Current Students, but all of these strategies may apply to you.
Part 1: Student Loan Debt Reduction Strategies for Graduates
You made it to the end of college, you got your piece of paper, some good memories, and a couple of good friends… oh, yeah and thousands of dollars of student loan debt.
Don’t worry there are dozens of options to help reduce the burden of debt. Here are the biggest needle movers.
Student Loan Forgiveness Programs
If you have qualified governmental educational loans, then you are likely eligible for student loan forgiveness programs. A student loan forgiveness program is a program design to completely remove/forgive a student loan without full payment of that student loan. Often times these programs require a certain number of predefined payments before forgiveness.
There are many types of loan forgiveness programs, but the most common form of loan forgiveness comes from Public Service Loan Forgiveness or PSLF. However, there are loan forgiveness programs for teachers, government employees, non-profit employees, medical professionals, or if you have a disability.
If you want more details on this option, check out StudentAid.Gov website here. The website is regularly updated with eligibility rules and regulations.
Company Student Loan Payment Programs
If you are lucky enough or planned well enough in advance, there are plenty of companies that offer student repayment programs. These companies can reduce your student loan debt by tens of thousands of dollars. Depending on the company you may have to work there for a specific amount of time to be eligible.
This is more common than you think and sometimes these terms can be negotiated in the interview process. If you are unsure if your employer offers these benefits make sure to ask your HR team. If you are currently interviewing for jobs, make sure to ask if that is part of the benefits package.
Similarly, if you are planning on going back to school, many companies will help you pay for your master’s degree, under certain conditions. That can save you tens of thousands of dollars in educational costs. Check with your HR team to see if they offer this benefit as well.
Here is a list of companies that pay student debt for you: Forbes – 13 Companies That Pay Your Student Loans
Refinance and Consolidate Loans
If you are struggling with your student loan reduction strategies, then it can be a great idea to consolidate loans or refinance to lower rates. If you have a lot of governmental loans, then debt consolidation means to combine all loans into one loan. This can help if you have multiple different rates because during the consolidation process, they take the weighted average of your current loans interest.
While it doesn’t reduce your debt, it can make it a lot easier to manage because you only have one monthly payment now. However, there are some down sides to consider, such as longer repayment terms, capitalized interest, loss of progress in forgiveness programs, and its irreversible nature.
If you want more information about loan consolidation, check out the StudentAid.Gov website here.
If you have private loans, then your best option is to refinance into lower rates. Depending on the interest rate environment when you went to school and where it is now, you may be able to reduce your interest rate by multiple percent.
That’s thousands of dollars in interest savings.
There are also private loan consolidation programs, but these don’t carry as many benefits as governmental consolidation does.
Make Extra Loan Payments
The most impactful long term student loan debt strategies aren’t always the prettiest, and making extra payments isn’t fun. However, this is ultimately most people’s best option for reducing their debt fast.
It’s important to make a student debt repayment plan. You should track how much of your income is going to pay down debt, set a goal for when you want to be student debt free, and aggressively pay down debt. There is no better feeling than being debt free and knowing your money is your own.
Many graduates will work extra hours or a second job just to make sure their debt gets paid down fast. While I don’t think you have to do that, you certainly can if that’s your goal. Work hard now, and live debt free soon.
Part 2: Student Loan Debt Reduction Strategies for Current Students
If you’re still in college your student loan debt reduction strategies are going to be different. Many of student’s options are actually more helpful than post graduate options. The one thing better than reducing debt is making sure you never have it in the first place.
If you think that personal finance, debt management, and savings are a problem for a later day, you would be wrong. Set yourself up for success with these debt reduction strategies, or I suppose I should say debt prevention.
Apply for Scholarships
If you’re a student, then by far the best way to reduce your debt and graduate debt free is by applying for scholarships. Some students don’t just get thousands of dollars in scholarships, some students get hundreds of thousands of dollars, with some students getting as high as $1,000,000 in scholarships.
My oldest brother got a full ride to law school which saved him thousands of dollars.
No matter where you are in college, scholarships are the best way for you to earn money quickly and in large sums. At the very least, the average college student can earn a few thousand dollars in scholarships. That’s a couple thousand dollars less that you have to spend.
There are many ways to apply for scholarships. Your own university likely has a scholarship program, but if not, there are dozens of online scholarships to apply for. There are great sites for finding scholarships.
Here are a few:
Join the ROTC
Ifs you have a patriotic spirit and the willingness to serve then join the ROTC can be a great way to help pay for college. Now, this isn’t a 100% guarantee of full coverage, but the ROTC often pays a pretty large chunk of a student’s educational bills through scholarships and stipends.
However, if you accept a scholarship, you are essentially signing a contract to serve in a military capacity, whether that is for the National Guard or for active duty. Some students can get up to $80,000 in educational expenses covered by the government.
If this is something that interest you, then you can learn more on the GoArmy.com.
Become a Resident Assistant
Becoming a resident assistant can be great for the bank account and great for the resume. If you don’t mind helping college students by managing a dorm hall. Then this option can save you thousands of dollars in housing costs over the year.
It’s technically a job, but you get paid in free housing and free food. I have always been a big proponent of being an RA. It gives you great experience, your own dorm room, and a whole lot of money in left in the bank. You will have to do late night rounds, write people up for alcohol, and solve roommate disputes, but a couple of headaches in your 20’s is worth the freedom later.
If you don’t mind living like a freshman every year than this can be a great way for you to reduce your student loans. Check what the eligibility rules are for your university to see if you can take advantage of this opportunity.
Make a College Plan
Making a college plan is the number #1 way to reduce your student loan debt in the long run. A college plan is simply a path for what you will study, when you will graduate, how you will pay for college, and post graduate career choices.
While there is nothing wrong with using your time to figure out your path while you are in college, this can be a huge spender on your wallet. An extra semester or two could lead your tens of thousands of dollars more in debt. If you write up a thorough college plan, you won’t have that issue.
A college plan includes where you’ll go to college, what major and minor you’ll choose, how many years that will take you, if you’ll work during school, if you’ll work in the summer, how you’ll pay for college, what extra-curricular activities you’ll partake in, and at least a few ideas of your plans after college.
Putting All the Student Loan Debt Reduction Strategies Together
If you are able to use just one of these student loan debt reduction strategies then you will end up saving thousands of dollars in interest payments, and a whole lot of headaches in the process.
Student debt is a growing problem in the US, but with prudent decisions and the right financial education you can tackle that mountain of debt and reduce it to zero. Remember that before you can start building wealth you have to get back to zero first.
Reduce your debt. Save your money. Say goodbye to student loans.
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Until the next article.
**Hi, I am your author Ryan Lisota, and I am on a journey to educate students of all ages. I am young, just like you and I have a goal to be on Forbes 30 before 30. Help me make that dream come true by reading another article here or subscribing to my newsletter here.**
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