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Back in the late 2000s, 22-year-old named Alan Collinge made headlines for a reason that now feels eerily familiar: his student loan balance had spiraled out of control. He owed $38,000, maybe nothing outlandish by today’s standards but due to interest and penalties, that number doubled. Alan eventually founded Student Loan Justice, a grassroots group lobbying for reform. His case wasn’t rare then. It’s even less rare now. 

Today, Americans hold more than $1.6 trillion in student loan debt, and the average borrower now graduates with over $37,000 in debt according to nerdwallet. While some talk of forgiveness continues to make headlines, most borrowers aren’t holding their breath. For most people, there’s no magic cancellation coming, and monthly reminders that compound interest is not your friend. Another part that doesn’t get enough airtime is the standard advice like “just pay more than the minimum” or “cut your Netflix subscription” often doesn’t work for people who are already living on the edge. 

Fortunately, even if you’re not eligible for forgiveness, there are underused, little-known, and often-overlooked strategies that can help you dig your way out without sacrificing your sanity. These are not the usual “cut back on lattes” clichés. These are actionable, research-based approaches that can truly move the needle. 

 

1. Know Every Dollar You Owe (Down to the Penny)

This may sound basic, but a shocking number of borrowers don’t have a complete picture of their debt. Federal and private loans are often managed by different servicers. You could be making regular payments on one loan while another quietly balloons with late fees. 

To get clarity: 

• You might want to check studentaid.gov for federal loans.

• For private loans, pull your credit report for free at AnnualCreditReport.com. Another alternative is Credit Sesame. Credit Sesame gives you a breakdown of how much you owe and to which lenders — even if you’ve defaulted on past loans. It shows your balances across both federal and private loans, and offers helpful tips to lower your debt and improve your credit score.

Once you have your full balance, interest rates, and minimum payments, you can strategize, but without that information, you’re shooting in the dark. 

 

2. Revisit Your Repayment Plan And Adjust Strategically

Most borrowers don’t realize they can switch repayment plans, often multiple times. 

The standard repayment plan spreads your balance across 10 years. But the federal government offers four income-driven repayment (IDR) plans: PAYE, REPAYE, IBR, and ICR. These peg your monthly payment to a percentage of your discretionary income and extend your term to 20 or 25 years.  

A 2023 Government Accountability Office report found that millions of borrowers who qualified for IDR plans weren’t enrolled, largely because they didn’t know these plans existed or assumed they wouldn’t qualify. That’s a lot of avoidable financial stress. 

What to do: Log into StudentAid.gov and use the Loan Simulator tool. It can estimate payments under each plan and recommend the best fit based on your income and goals. 

 

3. Apply for Temporary Relief Even If You’re Not “Struggling Enough”

If you’re in between jobs, currently not employed, or your expenses suddenly spike, apply for: 

• Deferment or forbearance. (temporary pause in payments) you can ask your student loan lender to defer payments, if you’re qualified, you may or may not be charged interest during the approved deferment period, depending on your loan type. 

In case you don’t qualify for deferment, you could alternatively ask your lender for forbearance, which allows you to stop paying the loan for a certain period temporarily. But with forbearance, any interest due during the forbearance period is added to the principal of the loan.

• Recalculation of your monthly payments under an income-driven plan. You don’t need to be destitute to qualify. For income-driven plans, monthly payments can go as low as $0, depending on your income and family size. You get a breathing room, get to keep your loans in good standing, and protect your credit score. It might also be the best to explore options like: PAYE (Pay As You Earn), REPAYE, IBR (Income-Based Repayment), etc. Each has different requirements, but all can dramatically reduce your monthly burden and even offer loan forgiveness after 20–25 years. 

 

4. Ask for an Interest Rate Reduction (Yes, You Can)

Many borrowers don’t realize that private lenders—unlike the federal government—have incentives to keep you paying. That gives you bargaining power. Online marketplaces like Credible, LendKey, and SoFi offer comparisons across multiple lenders. A study from LendingTree in 2022 found that borrowers who refinanced saved an average of $253 per month. Over the life of a loan, that’s no small win. A lower interest rate (even by 1–2%) can mean thousands saved over time. Refinancing also lets you combine multiple loans into one manageable payment. 

Refinancing can cut your interest rate substantially, especially if your credit score has improved since you took the loan. But even without refinancing, you can call your lender and ask for a reduction. Some lenders offer rate discounts for automatic payments or for making a certain number of on-time payments. 

Caution: Refinancing federal loans turns them into private loans, which means losing access to IDR plans and federal protections like forbearance or forgiveness. So only refinance if you’re confident you won’t need those. Apps like Credible or LendKey help compare refinancing offers from multiple credit unions and community banks. 

 

5. Use Found Money to Pay Down Principal (With a Trick)

Tax refunds. Work bonuses. Cash gifts. These occasional windfalls are perfect opportunities to throw extra payments at your principal not just the next month’s bill. 

Even a $500 lump sum can knock off a chunk of long-term interest. 

When you make extra payments, explicitly instruct your loan servicer to apply it to the principal of your highest-interest loan. Otherwise, they may just apply it to the next due month. 

This technique, sometimes called “snowflaking” is especially powerful when done consistently over time. A 2021 study by the Federal Reserve Bank of New York found that small, irregular payments can substantially reduce balances when used strategically. 

 

6. Get Forgiveness Through Work Even if You’re Not a Teacher or Nurse

Public Service Loan Forgiveness (PSLF) is widely misunderstood. You don’t have to be a teacher or in the military. You just need to: 

• Work full-time for a qualifying nonprofit or government agency

• Be on an income-driven repayment plan

• Make 120 qualifying monthly payments

After 10 years of payments (not necessarily consecutively), your balance is forgiven tax-free. It’s one of the few legitimate paths to zeroing out a six-figure loan. 

Not in public service? Look into state-based forgiveness programs. Some offer partial forgiveness for STEM professionals, doctors in underserved areas, or even lawyers doing legal aid. This searchable database from the Department of Education helps identify what’s available in your state. 

 

7. Hack Your Budget But Start with the Big Leaks

No judgment here, but the real savings lie in rent, food, and transportation. Track spending for a month and identify your top three expenses. 

• House hacking: rent out a room to slash your rent or mortgage

• Meal prepping: reduces food waste and eating out

• Public transport or carpooling: saves on fuel, parking, insurance

If you can reduce your monthly expenses by $200, that’s $2,400 a year that can go toward debt, and more if you direct it toward principal. 

Tools like You Need A Budget (YNAB) or Mint can help identify patterns you didn’t know were bleeding you dry. 

 

8. Start a Small Side Hustle and Ring-Fence It

You don’t need to become a full-time entrepreneur to make progress. Even an extra $100/month toward student loans can shave years off your balance. 

Separate the side hustle income and treat it as a “debt-only” stream. Whether it’s tutoring, freelancing, pet-sitting, or reselling vintage clothes, route the earnings into a designated account and use them only for loan overpayments. 

Apps like TaskRabbit, Rover, and Fiverr let you monetize your time without a heavy upfront investment. And according to Upwork’s 2023 Freelance Forward survey, nearly 40% of Gen Z and millennials are already freelancing in some capacity. 

With consistency, even modest side income can make a meaningful dent. 

 

9. Automate Your Payments (and Score a Discount)

Most federal and many private lenders offer a 0.25% interest rate reduction when you enroll in auto-pay. That might sound insignificant, but over 10 years, it adds up. 

More importantly, automation prevents late payments and protects your credit. A 2023 Experian report found that missed payments, even by a single day, can drag down your score, which may affect your ability to refinance or get lower insurance rates. 

Tip: Set your auto-pay to coincide with your paycheck cycle. And if your budget’s tight, route money into a separate checking account for bills only. That way, you avoid accidental overspending before the payment hits. 

 

10. Track Forgiveness Programs You Might Not Know Exist

Beyond PSLF, several state-based and occupation-specific programs offer partial loan forgiveness or repayment help. 

For example: 

• NURSE Corps Loan Repayment: Pays up to 85% of nursing education debt for nurses working in underserved areas.

• John R. Justice Program: Offers loan repayment for public defenders and prosecutors. 

• State Bar Associations: Some offer grants or loan repayment support for attorneys in legal aid roles. 

Use Federal Student Aid’s forgiveness tool or check your state’s education agency site for localized programs. 

 

11. Bankruptcy Isn’t Off the Table

Conventional wisdom says student loans are “undischargeable” in bankruptcy. But recent legal interpretations are shifting. Courts are increasingly open to the Brunner test, which assesses: 

• Can you maintain a basic standard of living if forced to repay?

• Are your financial challenges likely to persist?

• Have you made a good-faith effort to repay?

If you meet these criteria, there’s a growing body of precedent for partial or total loan discharge. 

The process is complex, you’ll need to file a separate proceeding called an adversary petition. But if you’re truly at a financial breaking point, it’s worth exploring with an attorney who specializes in bankruptcy law.