10 Fast and Cheap Ways to Pay Off Student Debt
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10 Fast and Cheap Ways to Pay Off Student Debt

iStockPhoto/The Fiscal Times

College is the best time of many people's lives, but if you're one of the 40 million Americans saddled with student debt, it might not be such a fond memory anymore. Sure, you get a monthly reminder of those carefree college days, but it always comes in the form of a hefty bill. Ouch! 

As a nation, we owe more than $1.2 trillion in student debt, and that number is only getting bigger.According to the Wall Street Journal, 71 percent of college graduates have student loans, and the average amount of loan debt carried by the class of 2015 is a whopping $35,000.

But before you let the stress of your loan payments drive you into insanity, take a deep breath. You're in good company, and there are many ways to ease the burden of that dreaded monthly bill.

Understand the basics.

These tips apply to everyone with student loans. If you've been struggling with the high cost of your debt, make sure you've act on these solutions first, or you're throwing money away.

Related: Worried About Student Loans? A New Repayment Plan May Help

Pick the best repayment plan. Explore the different payment plans offered including Pay as You Earn or Income-Based Repayment (IBR), which are based off of your income and can drastically reduce your monthly payment. Call your lender and have them work with you to see which plan is best for your lifestyle. You might be surprised at how willing they are to help--I know I was!

Consider refinancing your loan. Chances are, when you originally took out these loans, you had a limited credit history, no assets, and a small or nonexistent income. Assuming your credit has improved since then, you may be able to get your rate lowered since you are less of a risk, as far as a lender is concerned. Keep in mind that refinancing works differently for any federal loans. If you refinance a federal loan to a private loan, you lose the benefits that go along with it such as any loan forgiveness options and more flexible repayment plans.

Deduct your student loan interest. Once tax season rolls around, don't forget to deduct any interest paid! You can deduct up to $2,500, so be on the lookout for a 1098-E document in the mail from your lender.

Sign up for auto enrollment.  Some lenders will reduce a small percentage of your loan interest for enrolling in automatic monthly payments. This can add up over time, and it also eliminates the possibility of late fees--as long as you keep tabs on your account balance.

Use your credit cards (wisely).

Used properly, credit cards are a great tool. Here are two ways to put them to work paying off your student loans faster without running up more debt.

Related: Guess Who in Congress Has $100,000 in Student Loans?

Make your credit card pay for your student loans. Cash in on sign-up bonuses! The Chase Ink Plus card, for example, offers a signup bonus of 60,000 points when you spend $5,000 in three months. You can cash that out for $600, and you can apply it twice, which means an extra $1,200 in your pocket that can go right towards your loans.

You'll earn smaller rewards on an ongoing basis if you keep it up, which also can be applied to your debt. Meet minimum spending requirements with household expenses you'd normally pay for with cash, and make sure you pay off the card every month, because if you don't you'll end up paying interest and going even further into debt. No bueno.

Drop your interest rate to zero. Transfer what you can to a zero percent interest credit card, like the US Bank Platinum Visa. Once the zero percent interest period is up, transfer it to another zero percent card, and keep it rolling. If you have $10,000 in debt at six percent interest, it costs a lot more over the life of the loan than if your interest rate is zero percent.

Additionally, having that debt on a credit card means that if something goes wrong in your life, you can discharge it in bankruptcy, which you can't do with a student loan. But you have to be on top of it to understand when that balance will start accruing interest. Keep in mind that a one-time balance transfer fee of three percent may apply, but it's still a lot less than monthly interest at six percent or more.

Related: 11 Wild Things Graduates Would Do to Erase Their Student Debt

Go big and change your life!

Make a difference in the world and shed some student loan debt all at the same time with a new career or volunteer opportunity. These solutions are admittedly not for everyone, but going big can reap big rewards.

Volunteer. If you’ve been putting off getting out there and giving back, student loan relief just may be that extra nudge you need. In exchange for volunteering, these organizations will help reduce your student loan debt:

  • SponsorChange -- Connect with projects in need of talented volunteers for loan assistance. The amount earned towards your loans vary on a project by project basis.
  • VISTA (Volunteers in Service to America) -- Provide 1700 hours of service, and receive $4,725 towards your student loans.
  • AmeriCorps -- If you serve for 12 months, you may be able to receive a $7,400 stipend plus $4,725 to be used towards your student loans.
  • Peace Corps -- According to Finaid.org, Peace Corps volunteers can get 15 percent of a Perkins loan cancelled for each year of service, up to 70 percent total.
  • Teach for America -- In addition to a salary, you can earn up to $11,100 for completing your service while teaching. You don’t have to have a degree in education or any experience to teach.
  • National Health Service Corps -- If you’re a qualified healthcare worker, receive up to $50,000 in exchange for working in an area in need.

Join the Army National Guard. It’s a bit extreme if military life wasn’t already on your radar, but you can earn up to $10,000 in student loan forgiveness for serving. Plus, there are a lot of other perks to being a member of the military.

Many companies in Detroit offer loan forgiveness incentives for new homeowners.

Move somewhere with loan-paying incentives. Many cities are looking for young, creative and college-educated people to move in, and some are even willing to pay you for the privilege!

  • Work for specific companies in Detroit, and you’ll get up to $20,000 of your loans forgiven when you purchase a home in the city. Or you can get $2,500 towards your rent your first year and $1,000 the second.
  • Depending on the Kansas community, college graduates can get up to $15,000 to put towards student loans plus tax incentives.
  • Recent college graduates living in specific neighborhoods of Niagara Falls can earn up to $6,984 for two years of residency.
  • Receive up to $20,000 in student loan repayments for moving to Saskatchewan, Canadaand getting a job there.

Choose a job that will help you pay.  If you've got a full-time job at a nonprofit, you might be eligible for loan forgiveness after you've made 120 qualifying monthly payments.

Sometimes, when a city, county or state has a special need for a certain profession, they'll offer loan forgiveness incentives to people who can help them fill that need. This is often true for jobs like teachers and doctors, but programs are constantly expanding to include nurses and other healthcare workers, lawyers, dentists, law enforcement, psychiatrists, social workers, vets, doctors, therapists, librarians, speech pathologists, and firefighters are all eligible for loan forgiveness in certain areas. Check with your employer to see if you qualify.

You can also have a portion of your loans forgiven with federal, state, and local government agency jobs, and even private companies are starting to offer student loan repayment help as part of their employment package. Bring up the idea during salary negotiation or raise the option with your HR department.

Student loans can be hard to deal with, but you shouldn't let them consume your life. If you're having trouble paying your loans, make sure to contact your loan servicer and try to work something out with them. They want you to be able to make your payments, and many will have options that can help you do so a little easier.

This piece originally appeared in Brad's Deals. Read more at Brad's Deals:

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