More than 44 million Americans are currently dealing with student loan debt. Though some of those borrowers only owe a few thousand in student loans, a whopping 2.3 million are juggling balances of $100,000 or more. Half a million actually owe over $200,000.
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For those with six-figure balances, getting debt-free can seem like an insurmountable task. But Laurel Taylor, now the CEO and founder of student debt solutions company FutureFuel.io, is proof it’s possible to pay off those student loans … no matter how high your balances might be.
From $150,000 in debt to helping other student borrowers
Taylor knows first-hand what dealing with debt feels like. Between her tenures at Texas State University and the MIT Sloan School of Management, she emerged from college with around $150,000 in student loans by graduation day.
Her debts had her so strapped, she was living in a converted closet, eating soup for dinner and cutting corners at every turn.
“I hated the feeling of working so hard, just to stay above water on my liabilities,” Taylor said. “I was also ashamed and embarrassed that I seemed to be the only one of my friends struggling with debt.”
She eventually got in touch with a credit counselor and paid off both her student loan and credit card debts in just 15 months.
As she put it, “I was obsessed with paying off my debt so that I would have greater freedom in my choices—from jobs to savings to quality of life.”
How to pay off six-figure student loan debt
Paying off debts as high as Taylor’s is no easy feat, but getting serious about repayment is the first step. She also said that making additional payments is huge—whether that’s putting your tax payment toward your loans or just a portion of your holiday bonus.
“Compound interest is working against you every month—and sometimes every day,” Taylor said.
There are also other steps borrowers can take to speed up repayment and get out of debt more quickly.
Consider an income-based repayment plan (IBR)
Deferment or forbearance options can be tempting, but IBRs can be a much better long-term solution. These programs set your monthly payments based on your income and earnings, rather than your total student loan balance.
Though this makes it easier to make payments and stay afloat, there are some caveats: First, it will likely extend the time it takes to pay off your loan. Because of this, it may also increase the amount of interest you’ll pay in the long haul (though it depends on exactly what repayment plan you qualify for).
Ask your employer for help
The Employer Participation in Repayment Act (introduced in 2019) would allow employers to give up to $5,250 in tax-free student loan assistance to any worker annually. While it hasn’t passed in Congress just yet, some employers still offer repayment benefits, with major companies like Aetna, Estee Lauder, Fidelity, New York Life and Staples among them. Be sure to ask your employer or workplace HR department what they can do (or would be willing to do) to help you tackle that debt.
Refinance your loans
Refinancing your student loans can also help make repayment easier. For some borrowers, it could lower their interest rate or monthly payment, or it may simply make repayment easier by consolidating all the loans into one single payment.
Pay your loan bi-weekly instead of monthly
This reduces your interest and equates to an extra payment every year.
Deduct your student loan interest on your taxes
This can give you a larger tax refund, which you can then put toward your debts.
Get help from loved ones
“Student debt impacts the lives of entire households,” Taylor said. “You’re not alone, and your spouse, mom or favorite auntie may be willing to throw you a bone when he or she discovers that just $25 a month can shave two years and a near $5K off of your student debt.”