3 Strategies to Slash Your Student Loan Debt

Recent college graduate in hat and gown upset about tuition price tagDo you have a pile of student debt that’s keeping you up at night and causing waves of anxiety during the day?  You’re not alone.  Student debt is one of America’s largest financial crises, and one of our country’s most ominous financial bubbles.  Student loans are notoriously risky, because your entire promise of repayment (or lack thereof) is staked on how you fare post-graduation.

There are a lot of looming “if’s” in that equation.  If the job market is solid and demand for your skillset is strong.  If you manage to struggle past the wave of competing grads and land a solid income.  If your job isn’t entirely wiped out by AI in the next ten years (you’d be surprised what’s on the horizon…).

Student debt is tricky business, and can haunt your life in countless different ways.  It’s in your best interest to eliminate it quickly.  Here are 3 strategies to use.

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Strategy #1: Attack Your Debt at Its Source

Debt has a way of growing… with frightening speed if you don’t manage it efficiently.  And the larger your loan (national average is a rosy $37K), the more easily it can get away from you completely.

With that in mind, it’s in your best interest to invest as much as you possibly can into your monthly payments.  The smaller your principal grows, the more affordable your monthly payments will become.

Many student loan stories end in horror precisely because borrowers don’t mindfully follow this principle.  The fact is, lenders want you to repay them as slowly as possible, so your principal will balloon in size, and your monthly payments with it.

Attack your debt at its source by relentlessly slashing the principal on your loan.  Do everything you can to go beyond your monthly minimums.

Strategy #2: Set Up an Automatic Student Loan Fund

This strategy is an excellent way to protect yourself from one of the major pitfalls of human psychology: your desire for instant gratification.  Utilizing the magic of online banking makes student loan repayment painless.

First, go to your online bank account.  From there, set up a separate savings account entitled “Student Loan Payments” or something along those lines.  Set up the account to automatically take a certain amount from your checking every month.  This money is strictly for paying your student loan, and is automatically skimmed from your account each month, so you don’t have a chance to miss it or skimp on it.

This technique is foolproof, fully automated, and especially brilliant if you’re low on self-discipline at times (if, in other words, you’re a human being…).

Strategy #3: Become an Expert Investor

This is advice you don’t see often around the issue of student debt, but it’s vitally important to your financial well-being.  The simple fact is that infinitely more wealth is generated through investment than through earned income.

Earned income is an essential piece of the puzzle, but it’s only one piece.  Once you have money, do everything you can to get it working for you.  Use your money to make money.

Find the game you want to play, whether it’s in stocks, bonds, gold and silver, anything at all.  Study your chosen field relentlessly, and begin multiplying your money.  Beyond financial gains, investing imparts self-discipline, and the ability to combine critical and creative thinking.

Balance your investing with your student loan payments, of course.  But unless you cultivate your investment skills, you’re unlikely to pay off your loans quickly, reach retirement before your 60’s, or achieve any other financial goal without a great deal of difficulty.

Also, becoming a rock-solid investor is an excellent way to circumvent those “if’s” we talked about earlier.  You’re acquiring a skill that’s uniquely yours, and will enrich in you in good times and bad.


To sum up, three of the strongest strategies in your debt repayment arsenal are: slashing your principal, setting up an automated student loan fund, and becoming a skilled investor.

Follow these three steps, and you’ll be keeping your debt in check, conquering human nature, and cultivating a skill (investing) that could grow your wealth exponentially.

If you found these 3 tips helpful, you’ll be glad to know they were just the tip of the iceberg.  For more, review some of our other stellar strategies to shed debt quickly and get on with your financial life.

Posted on June 14, 2017 by in Personal Loans, Student Loans

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