Getting Ahead: How to Pay Off Student Loans Wisely

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College student calculates her student loan payments.

Rapidly increasing student loan debt has become a pressing national issue. According to Forbes, student loan debt has reached over $1.7 trillion, reflecting a 116% rise over 10 years. Further, for the class of 2017, the average loan amount was $28,650. Only mortgage debt outranks student debt in the collective amount owed at this point.

For young people seeking an advantage in a competitive job market, many are wondering how to pay off student loans in a practical manner. Fortunately, there are a few key practices that can reduce the amount that must be paid back and decrease the time spent in debt.

Why Student Loans Can Be Necessary but Beneficial in the Long-term

Despite the heavy burden, borrowing money to pursue an advanced degree can hold many long-term benefits. Receiving a high-quality educational experience allows individuals to qualify for positions and careers that would otherwise be unattainable. By gaining the skills and knowledge necessary to enter an occupational field as a qualified candidate, degrees can serve as a worthwhile investment.

Financially, individuals who pursue education earn more on average than those who don’t. The U.S. Bureau of Labor Statistics (BLS) reports that in 2017, individuals who did not have a college degree earned a median weekly salary of $712, where those with a master’s degree earned $1,401 (almost double). Moreover, the unemployment rate of master’s degree holders was only 2.2%. The rate was 4.6% for non-grads. In short, master’s degrees are associated with higher pay and lower unemployment.

Pursuing a degree such as Ohio University’s Online Master of Accountancy can help position students for careers that help pay off their loans efficiently. Obtaining a high-paying career with the skills gained from a master’s program provides students with greater financial stability while simultaneously improving their career trajectory and advancement potential.

How to Pay Off Student Loans Efficiently

Student loan debt accrues interest. This interest is what can keep students in the red for extended periods of time. As such, it is imperative to remain proactive with your financial planning and payments. Here are a few ways you can avoid paying too much on your loans:


Refinancing involves an independent loan provider “taking over” the remaining balance of the federal loan. These institutions can offer students lower interest rates than federal loan providers can, especially if the applicant’s credit score and monthly income meet certain thresholds. Refinancing can also combine multiple loans into a single loan payment plan. Private lenders offer various time frames for loan repayment, such as 5-20 year plans, so students can select a plan that is most in line with their situation.

Pay More Than the Minimum

If you are able to pay more than the minimum amount on your loans, you can substantially reduce the total amount you pay. Because interest rates are based on the total loan amount, or “principal,” reducing this value will simultaneously reduce the amount you pay in interest. However, it is important to notify your lender that any extra payment is intended for your total loan balance, and is not to be applied to the next month’s payment. By reducing the total balance of your loan, the total amount of interest you are paying every cycle decreases.

Lump-Sum Payments

If your monthly budget leaves you with any surplus, consider using it for a one-time lump-sum payment toward your loan’s principal balance. In high interest situations, lump-sum payments can save you more money than it would by depositing it into a savings account. Similar to excess minimum payments, it is important to inform your loan provider that the payment is intended for the principal and not the next month’s payment.

Increase Your Savings

Every balanced budget should include a portion for savings and a portion for debt payment. A good rule of thumb is as follows: For excess income, 50% should go toward savings, 30% should go toward loan payments, and 20% should be used for discretionary spending. Remember that every dollar you put toward your total loan payment will inevitably save you money in the long run.

Are Student Loans Worth It?

Undertaking a student loan can be a daunting process, yet the payoffs can create long-term financial stability as you assume a successful career. Understanding how to pay off student loans will give you a leg up financially in the long run. With responsible budgeting and hard work, high-quality education is accessible to anyone with the drive to succeed.

If you are interested in pursuing an advanced degree, Ohio University offers an Online Master of Accountancy program. In as few as five semesters, you can obtain a degree that allows you to qualify for high-paying jobs in the finance industry. Visit the website today and decide whether Ohio University is right for you.

Recommended Reading

Accounting Jobs That Put People in High Income Tax Brackets

Why Learn Accounting Online?

Why Study Accounting?


Bureau of Labor Statistics, “Measuring the value of education”

Experian, “Student Loan Debt Climbs to $1.4 Trillion in 2019”

Forbes, “4 Smart Ways to Pay Off Student Loans”

Forbes, “Pay Off Student Loans Faster in 2019”

Forbes, “Student Loan Debt Statistics in 2019: A $1.5 Trillion Crisis”

Nerdwallet, “how to Pay Off Student Loans Fast”

Ohio University, Online Master of Accountancy

Student Loan Debt Statistics