How I Paid Off My $40,000 Student Loan Debt In Less Than One Year

Are you interested in learning how to pay off student loans? Are you looking for the best way to pay off student loans? Today, I want to talk about how I paid off my student loans, tips to pay off student loans, and answer many of your top questions about how student loans work. I…

Michelle Schroeder-Gardner

Last Updated: April 4, 2024

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Are you interested in learning how to pay off student loans? Are you looking for the best way to pay off student loans?

Today, I want to talk about how I paid off my student loans, tips to pay off student loans, and answer many of your top questions about how student loans way to pay off student loans

I graduated college with $40,000 student loan debt, and I paid off my student loans in just 7 months. It’s been several years since I paid them off, but I still receive so many questions about this topic.

There are approximately 45 million student loan borrowers in the U.S. with a total of $1.6 trillion in student loan debt. Yes, that’s trillion.

With so much student loan debt, it’s not surprising that I receive so many questions about how to pay off student loans. Student loans can stay with you for years, and they can affect almost every financial decision you make until they are paid off. 

Student loans can prevent you from saving for retirement, make it harder to pay off other types of debt, find the job of your dreams, and so on.

Living with student loan debt can cause a lot of stress, and that’s one of the reasons I wanted to pay mine off as quickly as possible. I didn’t want to live with that debt on my shoulders any more. 

In this article, you will learn how I paid off my student loans, and while it did take a lot of hard work, it was well worth it.

Paying off my student loans completely changed my life, and it’s something I’ll never regret.

Paying off student loans can lead to many benefits, such as:

  • Feeling less stress because you no longer have a huge debt hanging over you.
  • Having the ability to use that money towards other goals in life, such as saving for retirement or buying a home.
  • Gaining the option to pursue other goals in life, such as traveling more or looking for a better job.

I know these benefits are real because paying off my student loans is one of the best decisions that I’ve ever made.

No, it wasn’t easy to pay them off so quickly, but it was definitely worth it. No longer having those monthly payments hanging over my head is a big relief, and it allowed me to eventually leave my day job and travel full-time.

If you’re reading this article, then you’re probably interested in paying off your debt as well.

Below, I’m going to answer some common questions that I’ve received over the years about paying off student loan debt, the steps I took to pay off my student loans in 7 months, along with other questions you may have as well.


How I paid off my student loans.

You will want to read through the steps below if you are asking, “How can I pay off my student loans fast?” 

Paying off your student loans so quickly is not easy, but it doesn’t mean it’s impossible. You have to find creative ways to make money, understand exactly how your student loans work, reduce your expenses as much as possible, and make a plan to pay off your loans.

Below are the 8 steps I took to pay off my loans, and then I will answer many of the questions I receive about student loans so you can understand the best way to approach your pay off. As you can see, there are many different student loan repayment methods.

1. Understanding my student loans

First off, I did everything I could to better understand my student loans.

I always think it’s best that you understand your debt so you can find the best strategies to pay it off. Understanding your loans helps you pay off student loans faster and save money over the course of your pay off.

Here’s what you should understand about how student loans work:

  • Your interest rate. Some student loans have fixed interest rates, whereas others have variable rates. Fixed rates stay the same, and variable rates go up or down based on the market. You’ll want to figure out the interest rates on each of your loans because that may impact the student loan repayment plan you decide on. For example, you might choose to pay off your highest interest rates student loans first so you can pay less money over time.
  • What a monthly payment means. Many people believe that a monthly payment is all that you have to pay, are allowed to pay, or that by paying just the minimum monthly payment you won’t owe any interest. Those three things are so incorrect! Even if you pay the minimum monthly payment, you will most likely still owe interest charges (unless your interest rate is 0% – but that is very unlikely with student loans).
  • Student loan reimbursements. Some employers will give you money to put towards your student loans, but you should always do your research before assuming it’s just that simple. Some employers require that you work for them for a certain amount of time, that you have great grades, good attendance, and they might have other requirements as well. There are many employers out there who will pay your student loans back (fully or partially), so definitely look into this option.
  • Auto-payment plans. For most student loans, you can probably autopay them and receive a discount. Always look into this as you may be able to lower your interest rate by 0.25% on each of your student loans.

Related: How Do Student Loans Work?


2. I added up my total student loan debt

This is probably the most important step. I know that many of you will think I am crazy, but this is crucial to seeing success.

I recommend that you take time to add up the total amount of student loans that you have.

When you total your student loans, do not just estimate how much debt you have.

You should actually pull up each loan and tally everything, down to the penny. By doing so, you will have a much more realistic view of exactly how much you’re dealing with.

Plus, the average person has no idea how much student loan debt they have! Usually, they have far more than they originally thought.


3. I received an easy interest rate deduction

If you automatically pay your student loans each month or consolidate them, then sometimes you can get an interest rate reduction.

With Sallie Mae, I believe the reduction is 0.25%.

That may not seem significant, but it is something! Remember, every little bit counts when it comes to having a good student loan repayment plan.

Related: I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can also connect accounts, such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. Plus, it’s FREE.


4. I found ways to make extra money

Making extra money is something I did a lot of back when I had student loans, and it was the big reason for why I was able to pay off $40,000 in student loans in just 7 months.

And, I believe that the fastest way to pay off student loans is to find ways to make extra money.

Making extra money can allow you to pay off your students loans quickly because there is no limit to how much money you can make. When you make money in addition to what you make at your current job, you have that much extra money to put towards your debt repayments.

Every extra bit of money I made went towards paying off my student loans, and I would usually make a payment as soon as the extra money from my side hustles hit my bank account. I did this so I was never tempted to spend that money. 

Here are a few of the things I did to make extra money: started this blog and made money from it, sold items on eBay, mystery shopped, had roommates in my house, took paid online surveys, wrote for other websites, and much more.

If you want to learn how to pay off student loans fast, then I definitely recommend that you find ways to make extra money. Here are various ideas you can try:

  • Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $2.75 per month, plus you get a free domain if you sign-up through my tutorial.
  • Start a business. There are many business ideas that you could start in order to make extra money. You can clean houses, walk dogs, house sit, work as a freelancer, and much more.
  • Sell your stuff. There are many ways to make money selling things. We all have extra items lying around that can be sold, or you can even search for items that can be bought and resold for a profit.
  • Rent an extra room in your home. If you have extra space in your house, then you may want to rent it out. Learn more at What You Need To Know About Renting A Room In Your House.
  • Answer surveys. Survey companies I recommend include Branded Surveys, American Consumer Opinion, Swagbucks, Survey Junkie, Pinecone Research, Opinion Outpost, Prize Rebel. They’re free to join and free to use! You get paid to answer surveys and to test products.
  • Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), and so on.
  • Sell crafts. If you’re looking for creative ways to pay off student loans, this one is for you!

Learn more at 80+ Best Side Job Ideas To Make Extra Money.

5. I sought out ways to reduce my expenses

The next step is to pay off student loans faster is to cut your budget. Even though you may have a budget, you should go through it line by line and see what you really do not need to be spending money on.

There’s probably something in your budget you can cut.

Until you look everything over,, you may not realize how much money you are wasting on things you don’t need. And, it’s never too late to start trimming your budget and start putting that money towards important things like paying off student loans!

Even if all you can cut is $100 each month, that is better than nothing. That’s $1,200 a year right there!

Some expenses you may be able to cut include:

  • Lower your cell phone bill. Instead of paying the $150 or more that you may currently spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $15. YES, I SAID $15! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. If you are interested in hearing more, I created a full review on Republic Wireless. I’ve been using them for over a year and they are great.
  • Sign up for a website like Rakuten where you can earn CASH BACK for spending how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 cash back!
  • Pay bills on time. This way you can avoid late fees.
  • Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance, and so on. Insurance pricing can vary significantly from one company to the next. The last time we were shopping for car insurance, we found that our old company wanted something like $205 to insure one car each month, whereas the company we switched to charged $50 a month for the same exact coverage.
  • Save money on food. I joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first four weeks are free) and they send meal plans straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 or less per person.
  • Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
  • Trade in your car for a cheaper one. How much is your monthly car payment, if you have one? This can be an easy way to cut your budget drastically.
  • Live in a cheaper home. I’m not saying that you need to live in a box, but if you live in a McMansion, then you may want to think about a smaller home. This way you can save money on utility bills and your mortgage payment.
  • Learn to have more frugal fun. We don’t spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.


6. I created a plan to pay off my student loans

After you have completed the steps above, you’ll want to put it all together and create a plan.

Without a plan, you would just be all over the place, making it difficult to reach your goal of learning how to pay off student loans.

You should create a plan that details the steps you need in order to pay off your student loans, what will happen as you reach each step, when and how you will track your progress, and more.

Here’s what my student loan pay off plan included:

  • Setting up autopay on my student loans so I never missed a payment. I had autopay set up to pay the minimum payments on each of my student loans, and then I made targeted payments (more on this in the next point) with any extra money.
  • Paying off the student loans with the highest interest rates first. All of my extra money went towards my student loans with the highest interest rate, and once that loan was paid off, I put the money I was paying towards that loan towards the loan with the next highest interest rate until all of my loans were paid off. This helped me save money on interest charges
  • Put every bit of extra money towards my student loans. Like I said earlier, any time I made extra money, I immediately made a payment on my student loan debt, even if it was something small like $20. This meant all of my extra money went towards student loans, and I was never tempted to spend it on something else.
  • I checked my student loan balances a couple of times a month. Seeing my debt go down helped me stay motivated.  

This plan took a lot of hard work and dedication, but it’s exactly how I paid my student loans off so quickly.

7. I stayed motivated with my student loan payment plan

For me, motivation was crucial for paying off my student loans. Luckily, I received great satisfaction each time I put even just a little bit towards my student loans.

But, staying motivated can be hard. Motivation is important because it can help you keep your eye on your goal to pay off student loans even when you want to quit, which can happen often during a big debt repayment.

Yes, student loan repayment can seem very stressful when you think about it. Many people owe thousands and thousands of dollars in student loans. It may feel like you are trying to scale a mountain.

However, think about how good life will be once all of your student loan debt is gone.

Please try to not let your student loans get you down. Think positively and attack that debt so that you can pay it off fast!

Trust me, once you finally pay off those expensive student loans, you’ll be much happier.

Some ways to stay motivated while you pay off student loans includes:

  • Remember the reasons for why you are wanting to pay off your student loan debt.
  • Make your goal visual with a debt thermometer.
  • Set smaller goals in between. For example: If your overall goal is to pay off $24,000 in debt in two years, then you might want to aim for $1,000 in debt payoff each month. This seems much more attainable than the $24,000 number, and this can help you stay motivated while still challenging yourself at the same time.
  • Keep track of your progress.
  • Think about how you will feel in the future.

As you can see, there are many ways to stay motivated.


8. I paid more than the minimum student loan payment

The key to speeding up your student loan repayment process is that you will need to pay more than the minimum each month.

Most student loans, especially many federal student loans, are set up for a 10 to 20-year repayment plan. But if you want to pay them off faster, then you must pay more than the minimum payment each month.

Not only does paying more than the minimum help you pay off your loans faster, it helps you save money on interest charges. For some people, that can make the difference of thousands of dollars saved over the course of their repayment.

Paying more than the minimum may sound hard, but it really doesn’t have to be. Whatever extra you can afford, you should think about putting it towards your student loans. You may be able to shave years and thousands of dollars off your student loans!

Common questions about the best way to pay off student loans

In this section, I am going to answer common questions that I’ve received about the best way to pay off student loans.

Is it smart to pay off student loans quickly? What is the smartest way to pay student loans?

There are many benefits to paying off your student loans early. For me, I hated the feeling of having all of that debt hanging over my head. No longer feeling that stress was the benefit.

I recommend sitting down and thinking about how paying off student loans quickly could positively change your life too.

It might mean you are eventually able to leave a job you hate, finally buy a house, travel more, retire early, and so on.

How does paying back student loans work?

Most student loans have a 6 month grace period where you don’t have to make your first payment until 6 months after you graduate or if you go to school less than half-time.

But, this all depends on the student loan, so you will want to make sure that you read the terms on your loan.

Even though you may not have to pay back your student loans right away, that doesn’t mean you can’t.

You can start paying back your student loans early, and you can pay more than the minimum monthly payment as well.

Your student loan servicer, whether federal or private student loan lender, will send you information to set up your repayment plan some time in that 6 month period. If you are still in school, I recommend starting to think about how you will pay off your loans.

Federal student loan borrowers have a few different options for paying back their loans, including income-based repayment plans, graduated plans, and so on. You should look into each option to see what makes the most sense for you.

No matter which option you choose, remember that you can always make more than the minimum payment, and that’s what you should do if you want to pay off student loans quickly.


Is it better to save or pay off student loans? Should I pay off my student loans?

A big question when paying off debt is if that should be your sole focus. Should you still be trying to save money while paying off your debt?

Or, should all of the extra money you have be going towards your student loan debt?

You may be wondering things such as:

  • Should I pay off debt or emergency fund first, as in set some money aside for emergencies?
  • Should I pay off debt or save up for a downpayment?
  • Can I pay off debt AND save money at the same time?

And so on and so on.

I paid off my student loans quickly, which meant that I focused entirely on my student loans and completely skipped any other financial goals. It doesn’t mean that’s the best decision for everyone, though.

I know several people who paid off their student loans quickly like me and didn’t have any money saved while they were doing so, and a couple of them wish they had an emergency fund. 

It all depends on your situation. If you have kids, health problems, a house, people who rely on you financially, etc., then you may want to have at least an emergency fund.

I recommend reading Pay Off Debt Or Save Money – Is One Better For You? to learn more about this subject.

What other ways can you pay off student loan debt?

If you are looking for other ways to pay off student loan debt, there are plenty of other options.

These may include:

  • Asking your employer to help pay off your student loans
  • Refinancing your student loans
  • Seeking out student loan forgiveness

Below, I will be talking about these options in more detail.


See if your employer will reimburse your student loan debt.

Some companies offer their employees student loan reimbursements. I know of someone who received a $2 bonus for each hour that she worked to put towards her student loans.

$2 may not seem like a lot, but if you work full-time, then that’s over $300 a month (or $3,600 a year!). $300 a month for student loans is a good amount! 

And, because it’s free money, it can all be put towards paying off your student loans quickly.

If you are looking for a new job, this may be something you will want to ask about.


Should you refinance your student loans?

By refinancing your student loans, you may qualify for better repayment terms, a lower interest rate, and more. This is great because it may help you pay off your student loans quicker.

This can be a good option if you borrowed private student loans and your credit score is better now than when you originally took out your student loans.

The positives of refinancing student loans include:

  • One monthly payment to simplify your finances
  • Lower monthly payments
  • Lower interest rates, and more

Before refinancing a federal student loan, though, you will want to think about different federal benefits that you may be giving up. You may give up income-based repayment plans, loan forgiveness for those who have certain public service jobs (including jobs at public schools, the military, Peace Corps, and more). By refinancing your federal student loans, you may be giving up any future options for these loan forgiveness programs.

However, keep in mind that by refinancing your student loans, you may receive lower monthly payments, lower interest rates, and more. This may help you pay off your debt much faster.

For me, I didn’t qualify for student loan forgiveness, so refinancing would have definitely helped me if I knew about it back then.


How does student loan forgiveness work?

Teachers, nurses, and government employees may be eligible for student loan forgiveness through a program called Public Service Loan Forgiveness (PSLF). It is only available for Direct Federal Student Loans, including Direct Plus and Direct Consolidation Loans.

To qualify, you must be working full-time, make 10 years of on-time monthly payments under a qualifying repayment program, which includes:

  • Income-Based Repayment Plan (IBR)
  • Income-Contingent Repayment Plan (ICR)
  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)

You will have to certify your income and repayment plan every year, and PSLF does not apply to private student loans.

PSLF is one of the most confusing aspects of how student loans work, so I highly recommend that you contact your student loan servicer as soon as possible. They will explain exactly how to move forward with forgiveness.

Are there grants to pay off student loans?

Yes, there are grants that help people pay off student loans, but most student loan borrowers will not qualify for them.

The kinds of grants available are for health care workers, veterinarians, military personnel and surviving family members, and lawyers (specifically state defenders and prosecutors). 

I recommend searching online to learn more about these grants if you fall into one of those categories above.

How long will it take to pay off student loans?

The time it takes to pay off your student loans depends on the kind of repayment plan you are enrolled in. There are 10 and 20-year repayment plans for federal student loans, or you can pay them off early.

As I’ve said, paying your student loans off early can be a very good thing, and you can possibly save thousands of dollars over your loan repayment period.


What do I do when my student loan is paid off?

After my student loan debt was paid off, we celebrated!

Paying off my student loans in full was an amazing feeling for me.

I can’t remember exactly what we did, but I think it involved a nice dinner, haha. Paying off my student loans opened up other doors for me – I felt more comfortable pursuing my side business full-time, as I no longer had a huge monthly debt payment hanging over my head.

For you, you may decide to do other things such as:

  • Pay off any other debt that you have
  • Fully fund your emergency fund
  • Save for retirement

And so on!

I hope you enjoyed today’s blog post on the various ways to pay off student loans, along with the common questions that I have answered.

If you have any questions about how to pay off student loan debt, please leave them as a comment below or send me an email.

Do you want to learn how to pay off your student loans? What other tips do you have on the best way to pay off student loans?

Filed under:

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

Like this article?

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

  1. Steven

    This is an excellent Budget Planner! Would you mind if I posted this on to give you full credit! It’s based on quality Budget planning posts such as this so I think it’d help out!