Alternative Ways to Pay Off Your Student Loans

by Emily Guy Birken

With the average college graduate facing $19,000 in student loan debt and unemployment still approaching 10%, finding ways to tame the monster of student loan debt is a major issue for new graduates. The six month grace period before payments are due flashes by in an instant, and new graduates are finding that their new financial situation—whether unemployed, underemployed, or paying dues in a new career—does not quite cover the necessary expenses and the student loan payment, too.

Luckily, there are more options than ever for helping new graduates to pay off their loans. Check out some of the opportunities available for loan repayment and forgiveness:

Alternative Ways to Pay Off Your Student Loans

1. Uncle Sam Wants You… to use your newly learned skills to help others! With options as diverse as volunteering (through the Peace Corps, AmeriCorps and VISTA), military service (the military forgives student loans under some circumstances, including service with the Army National Guard), teaching in low-income areas, and practicing law or medicine for the public interest or health, the government has a loan forgiveness program for nearly everyone. Each of these options will require some sort of time commitment, but the rewards go far beyond the ability to pay your loan. Many volunteers find that their career path is forever shaped and improved by the time they gave. Check out for more information about these programs.

2. Don’t pay more than you can afford. For those with irregular or low income, the Income Based Repayment plan (IBR) could be a lifesaver. With this program, you are only required to pay a percentage of your total income, based upon your income and family size. Rather than a standard 10-year repayment plan, this will allow you to continue paying down your loan even if your income is quite limited. A further benefit is that you can have the remainder of your loan canceled if you take advantage of IBR for 25 years. Visit for all the details on IBR.

3. Get a micro-sponsorship. We have all heard of the incredible power of small amounts of money through micro-lending. Some websites have taken that idea and applied it to education costs. This website will allow current students and graduates to post profiles where they tell potential sponsors why they are worthy of a gift of money. The minimum that a sponsor can donate is as low as $5, and there are no costs for the students, who can use the money for current college costs or to help pay down student loan debt. 100% of the money that sponsors donate goes directly to the students—although the website does take an additional 5% over the sponsored amount for the cost of maintaining the site.

Even in today’s economy, it is possible to ensure that you can choose between saving and paying off student loans and that you are not forced to carry your student loan debt into retirement, as insurmountable as the amount may seem.

Published or updated December 21, 2011.
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{ 7 comments… read them below or add one }

1 HedgeHoncho

Hmmm, well unless you have a high rate, I think you bite the bullet and pay it off small over time.


2 Dr. Timothy Lawler

Great article. I especially love the resource, I just checked it out, and what a great idea! I am physician in the Navy, and I can tell you from personal experience that the military can be an excellent source of funding for any college or graduate degree education. The Navy paid for my med school, whic helps lift a huge burden off my shoulders down the road. However, it is not the reason that I joined the Navy, but it is still a huge plus! Keep up the great posts!


3 Ryan

Dr. Lawler, I used the military to help pay for my degree as well (I used tuition assistance while I was enlisted and graduated with a Bachelor’s Degree before I separated from the USAF). It was a great way to get a head start on my career and avoid taking on any student loans. I shared my story on The Military Wallet, a personal finance site for military members, veterans, and their families: Tips For Taking Classes While in the Military.

Military service definitely isn’t for everyone, but it was an amazing opportunity for me to serve our country, see the world, meet dozens of lifelong friends, and enjoy a bevy of lifelong benefits.

Thanks for your comment, and more importantly, thanks for your service!


4 Dr. Timothy Lawler


Good for you! I am trying to tell all my Corpsmen to use the advantages the military has to offer for their educational benefits. Thank you so much for you service, and it is an absolute pleasure to be serving the men and women of our country. I actually write to you forward deployed in Afghanistan, but my unit will be coming home in a few weeks. I can’t wait to be back on ground on American soil! I might try to submit a story or two to the Military Wallet as well. Thanks for the great resources! Just love the people you meet through blogging! Take care.


5 Jurrell Kemp

Great tips I attend Devry University and they are super expensive


6 Melissa

Thanks for this information!! I work in public safety and I had no idea that the loan forgiveness existed. Unfortunately I’ve had a FFEL consolidated loan, not a Direct consolidated loan, so I won’t be eligible for this program until I consolidate into a Direct and pay it for ten years. All in all, I will lower my monthly payments and get a little over a thousand dollars of my loan forgiven… not too bad 🙂


7 paul speed

I recieve $787 month disability Can i use income based repayment? How is this calculated?


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