As New Year’s 2017 approaches sooner by the day, it is time to start think about what resolution(s) you want to make as you hum to the tune of “Auld Lang Syne.” If you are one of the 40+ million Americans with student loan debt, one resolution idea might be putting greater focus on erasing your loan balance. In fact, student loan payments account for one-fifth a Millennial’s average monthly budget. As that is a lot of money to pay each month, there are several strategies that you can take that can help you make more than the minimum monthly payment and allow you to save on your student loans in 2017.

Make a New Budget

When was the last time you sat down and truly calculated your monthly income and expenses? If it has been awhile, now is a good time to make a new budget. Using a free service like Mint or You Need A Budget can help you out. Or, you can always do it the old-fashioned way with pen and paper.

Use this time to see if you can reduce any monthly expenses like cable tv or going out to eat and apply those savings to your student loan payments. Also, if you receive a bonus or salary increase at work, use that extra income for student loans instead of buying a new tv or going on a fancy vacation. While it is okay to indulge a little on luxuries, you can afford larger luxuries in the future by saving money on interest payments today.

Automated Payments

Enrolling in automatic payments will reduce your interest rate by 0.25% as the lender will withdraw the payment on the same day each month. And, you do not have to be concerned about missing a due date and incurring additional late fees and a damaged credit report. All you need to do is make sure there are sufficient funds in your checking account on the scheduled withdrawal date.


The best way to save money on your student loans is by paying extra each month. The federal student loan program and most private lenders will not penalize you if you finish repaying your student loans early. For example, if a Class of 2016 college graduate with $37,000 in student loans with a 6.8% interest rate wants to repay their balance in nine years instead of ten years, they will save approximately $1,500 in interest payments! You can use a prepayment calculator to calculate how much you can save by increasing your monthly payment or reaching a zero balance by a certain date.

Work a Side Hustle

Paying more than the normal monthly amount costs might be easier said than done if you do not have a large disposable income. Working a part-time side hustle can help you earn additional income that you can use to make extra student loan payments. A side hustle can be seasonal or year-round. Side hustle ideas might include using your writing or graphic design talents on freelancer website like Upwork or Freelancer. You might also be able to monetize a hobby or your full-time job by helping local clients. For college students, finding a part-time work-study job can be a great way to bring in a small amount of cash to at least make interest-only payments while your borrowed principal is still in deferment status.


In addition to making extra student loan payments, you also have the opportunity to refinance your student loans for a lower interest rate that can save additional money. Variable interest rates are currently as low as 2.13% and can be very beneficial if you expect to repay your loans in the next couple years. For those that need a little bit more time to repay their balance or simply want the peace of mind that comes with a fixed interest rate, they can refinance with most lenders for as little as 3.38% without having to pay any fees or extend the length of their repayment terms. This is because you now earn a regular income and have a more robust credit history that allows you to qualify for a better interest rate than as a college student.

Whether you refinance to extend your repayment terms, to pay a lower interest rate, or both, refinancing student loans can benefit just about anybody. As refinancing will reduce the minimum monthly payment for most applicants, it is important to remember that a smaller monthly payment created by extending the repayment length by several years will incur more long-term interest fees than the original loan. Even if you are struggling to make the minimum monthly payment today, but can pay more in the future, doing so can save you thousands of dollars in interest payments.

Employer Benefits

While a small number of employers currently offer student loan reimbursement benefits, the number continues to increase each year. The contribution amount differs between each employer, but, many will match up to $250 monthly for several years or until the entire loan balance is paid off. While this benefit is currently considered taxable by the IRS, unlike health insurance premiums or traditional 401k contributions, legislation has been introduced to make employer student loan reimbursement contributions tax-exempt. If this legislation is passed, the rate of employers offering this benefit could increase sharply. Another reason more employers, including your current one, might begin offering this benefit is that Millennials are becoming the largest generation in the workforce and gaining more influence as a result. If your employer currently doesn’t offer this benefit, you and your co-workers can recommend it to the Human Resources department for consideration.

Explore Federal Student Loan Forgiveness Programs

If you have a limited income and are struggling to make the monthly loan payment, another option to consider is enrolling in an income-based repayment plan for your federal loans. These plans allow borrowers to limit their monthly payments to 10% of their adjusted income and the unpaid balance is forgiven after 20 years or 25 years depending on the repayment program. Select government employees can have their loans forgiven after 10 years of consistent payments through the Public Service Loan Forgiveness Program. While these options will incur more interest charges because the repayment terms are extended a decade, it is still better than entering default status because you cannot afford the current monthly payment for your federal student loans.