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How to Pay Off Student Loans

Wondering how you're ever going to pay off your college debt with a sucky starting salary? We've got some suggestions.


  • Step 1: Find out interest rate Check out your student loan interest rate. If it's lower than that of your other debts, like credit card balances, then don't pay more each month than you have to.
  • TIP: If you are earning less than $65,000 ($135 for couples filing jointly) you can deduct up to $2,500 a year in interest.
  • Step 2: Extend loan term Consider lowering your monthly payments by extending the loan term. You'll pay more in the long run, but this will ease your current payments.
  • Step 3: Take job w/ Loan Forgiveness Think about taking a job that offers Loan Forgiveness. If you work in the public sector (like education or government) and make your monthly payments, after 10 years the remaining debt is forgiven.
  • TIP: Teachers may qualify for a full discharge of their debt if they instruct low-income students; work with disabled children in a public school; or teach a subject that has a shortage of instructors.
  • Step 4: Join Peace Corps or AmeriCorps Spend a year in the Peace Corps, or its domestic counterpart, AmeriCorps, and they'll pay off part of your student loans. Check their websites for details on how long you must commit to be eligible.
  • TIP: Sometimes needy communities will strike a trade: they'll pay off your medical or law school loans if you commit to work for their underserved population.
  • Step 5: Join Army National Guard Sign up for the Army National Guard and you may be able to wipe out as much as $10,000 in debt.
  • Step 6: Fake your own death If all fails, fake your own death and move to rural China to become a farmer. Even collection agencies have their limits.
  • FACT: Sixty-two percent of people over age 35 are still paying off their student loans.

You Will Need

  • A plan of attack
  • And some income
  • A longer loan term
  • A job that comes with loan forgiveness

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