May 30, 2022 Jun 26, 2022

We live in a world where many college students depend on student loans to help them pay for school. Of course, student loans don’t have to be paid until after graduating, but the debt many students take on is often a huge burden.

Here are three ways to reduce your student loan payments and not let it ruin your financial standing.

1. Refinancing

Refinancing will depend on your income level, but with it you may be able to lower your interest rate, which could reduce the amount you pay monthly and the cost you pay for your entire loan. Doing so will depend on factors like your credit score and your annual income. Depending on the finance companies, they will also take into account your earnings potential in relation to your college degree.

You may also want to consolidate multiple student loans into one. Sometimes you may have trouble refinancing, in that case you might want to check if having a cosigner would help. Check interest rates and other variables on an ongoing basis, since they tend to fluctuate.

Also, make sure you get a good understanding of what the annual percentage rate will be on the refinanced loan. Be vigilant whether it’s fixed or variable, because even though your monthly payment might be lower, you could end up having to pay for a much longer term.

2. Public Service Loan Forgiveness

In some cases, you can receive forgiveness for some or all of your student loans if you are struggling with your monthly payments. Several forgiveness programs are available through different non-profit organizations, schools and public service agencies.

This is typically offered in exchange for work in a particular occupation, joining the military or perform volunteer work. Example, if a doctor is needed in a community lacking adequate medical care, the leaders within that community might offer to pay a portion of the doctor’s student debt for each year of service. Authorized military branches of the federal government, such as the army or navy, may do the same by forgiving a fixed percentage of student debt for each year of military service.

The purpose of forgiveness programs is usually designed relieve graduates debts while establishing their careers by filling a community need. You owe it to yourself to investigate the different options available for you.

3. PAYE Payment Plan

If the previous options aren’t fit to your current situation, then look into a Pay-As-You-Earn (PAYE) plan. This will help to make your monthly payments more affordable. The basic concept behind this plan is for students to tie up a percentage of their discretionary income to their loan, typically ten percent. If their is any remaining balance after a 20-year period is usually forgiven.

The advantage is that when you are making a beginner’s salary, you will have lower monthly payments. As your income grows, your monthly payments will increase proportionately— the other plus side is that a portion of your total debt will be forgiven.

Another plan you may want to consider is the Income-Based-Repayment plan— it’s slightly different than PAYE. The IBR plan payments are based on what you earn and not on what you owe. Another important advantage of the Income-Based-Repayment plan is that more graduates are able to meet eligibility requirements, compared to the PAYE plan.


You should feel an extreme sense of pride and accomplishment— the hard part is behind you — you completed your education and earned your degree. Even though, trying to repay your student debt is making it difficult for you. But, you owe it to yourself to research and find the best solution that will help get your feet above the water and reduce your student loan payments.

Like shopping for the new pair of sneakers, or the best computer, it’s always a good idea to be aware of the latest research. We always recommend to compare at least 3 to 4 options before making any final decisions. Online is normally the quickest way— don’t waste time!

The responses below are not provided, commissioned, reviewed, approved, or otherwise endorsed by any financial entity or advertiser. It is not the advertiser’s responsibility to ensure all posts and/or questions are answered.

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