
Do you have student loan debt that is so enormous that your salary won’t ever allow you to pay it off in this lifetime? Do you have more student loan debt than you make?
If so, take a deep breath, and keep reading.
You went to school with aspirations for a better future, and you borrowed money so that you could advance your skill set and maximize your earning potential. You are working towards advancing your career, but meanwhile, your debt is higher than your salary - at least for now. What do you do when you are not earning what you deserve, and you feel like you can’t make ends meet?
Remember, one of our key rules of borrowing student loans is that you should never borrow more than your expected first year salary. But if you find yourself in the situation where you owe more, here are the steps you need to take so you don't go broke.
Keep Your Head Up And Get Organized
Just because you make less right now does not mean that your salary will remain low forever. Use this time to create solid financial habits so that you can pay off debt fast and live the life you deserve.
No matter what your situation, you can't take any action if you're not financially organized. You need to have a good grasp of your income, expenses, and total balance of all your loans. We recommend using the free software Personal Capital to get organized and know where you stand.
Financial experts claim that people automatically spend less once they track their finances. Keeping track of finances allows you to measure and evaluate the data in front of you. As a result, you will intentionally spend on the things you love, and cut back on the things you don’t.
When you get a raise, don’t raise your cost of living. Instead, invest the amount towards your future. These personal finance habits will make you rich if you follow them consistently, and then, student loan debt will be a thing of the past.
Create Your Action Plan To Pay Off Student Loans
Once you're organized, it's time to create an action plan and take steps to tackle your debt.
Log into your loan servicer account and gather your records. Here is what you will need:
- Find out how much you owe
- What your interest rates are
- How much of your monthly payments go toward paying down the principal, and how long you have to pay it off.
Organize your debts in amount and interest rate, and pay them off in that order, similar to Dave Ramsey’s “debt snowball” method of paying down debt.
Next, do the same exercise for any other types of debt you have. Once you have all the information in front of you, it’ll be easier to see where your money should be going.
Explore All of Your Repayment and Forgiveness Options
For your student loans, you need to take advantage of repayment plans and forgiveness options. The Definitive Guide to Student Loan Debt will dive deep into all of your repayment options.
For many people, this will involve a combination of taking advantage of an income-driven repayment plan, and looking for loan forgiveness options.
Income Driven Repayment Plan
If you have federal loans, switching to an income-driven repayment plan can lower your monthly payments to as low as $0 per month. Plus, after 20 to 25 years, any remaining balance will be forgiven.
The forgiven amount will be taxed and your total interest payments will be higher. You also have to reapply every year. However, keeping your payments manageable will help you stay on track and out of default, which can negatively impact your credit score, lead to wage garnishment, and cause your entire student loan debt to become due at once.
Public Service Loan Forgiveness
One of the most popular forgiveness options for federal loans is public service loan forgiveness. It’s available to those who work for a nonprofit or the government for at least 10 years and make 120 on-time payments on their loans. If you plan to sign up for PSLF, you can cut costs even further by switching to an income-driven repayment plan to lower your monthly payments.
Lastly, you will want to review the student loan forgiveness options available by state.
Use Deferment and Forbearance as a Last Resort
If you find that your student loan payments are too high for just a temporary period of time, then student loan deferment or forbearance may be a viable option for you. However, your loan balance may still grow while you're not paying, so typically an income-driven repayment plan is a better option.
Options For Private Loans
If you have private student loans, there are much fewer options for your student loan debt. We break down all the options here: What To Do If You Have Trouble With Your Private Student Loans.
Making A Plan
Once you are organized and understand your options, it's time to make a plan. Student loans require a different plan than other types of debt (like credit card debt or car loans). The reason? There are a lot of options!
If you owe less debt than you make, you might consider paying off the loans as quickly as possible. While you may qualify for forgiveness, the time (and even the amount forgiven) might not be worth it. Instead, it might make sense to utilize a debt snowball and pay it off.
If you owe more student loan debt than you make, then the best plan of action will likely be to pay as little as possible (via an income-driven repayment plan) in order to maximize the student loan forgiveness you'll receive. You can also lower your payment by lowering your AGI - usually by using retirement plans. Then, you can save for yourself while you pay off your debt.
Getting Professional Help With Your Debt
It sounds like the options above could be confusing, but it doesn’t have to be. You can sign up for these programs at StudentAid.gov.
You can also call your lender and speak to them about getting assistance with your debt. You can change your repayment plan and explore forgiveness options. They might not be able to answer all your questions, but it's a good starting point.
If you're looking for a DIY option with professional help tied in, check out Chipper and their student loan concierge program. Check out Chipper here >>
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
Final Thoughts
The worst thing you can possibly do is to ignore your loan servicer and not pay your student loan at all.
Once you examine where all of your money is going, you may find that you can live on less and save more. Your debt payoff plan will enable you to get on a student loan repayment plan that will allow for maximum savings, and in some instance, loan forgiveness.
The Definitive Guide to Student Loan Debt is an excellent resource that will help you learn all of your options to get rid of your student loan debt in an efficient manner. While it may seem overwhelming right now, with the right plan, you will be on track to pay off your student loan debt at an affordable pace.
Are you struggling with more student loan debt that you make?

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications, including the New York Times, Wall Street Journal, Washington Post, ABC, NBC, Today, and more. He is also a regular contributor to Forbes.
Editor: Clint Proctor