Student Loan Repayment 101: Strategies, Employer Repayment Programs, & More

After a 3 year pause, federal student loan repayments are restarting this fall. Interest will start accruing September 1st and payments will be due starting in October.

Repaying student loans is not always easy, but it is crucial to avoid defaulting on loans and facing severe consequences. Fortunately, strategies and programs are available to help manage and repay student loans successfully. This blog will discuss repayment strategies, forgiveness programs, and work repayment programs.

Choosing a student loan repayment strategy

Managing debt- Free downloadable guide. A hand is pictured in money, visualing drowning in debt.

There are two common strategies for paying off loans. The most effective debt repayment strategy will depend on an individual’s financial situation, priorities, and goals.

Avalanche method

The avalanche method of debt repayment involves paying off the debts with the highest interest rates first. This helps to reduce the overall amount of interest paid and pay off debts faster. 

Snowball method

Some people may prefer the snowball method, which involves paying off the smallest debts first to create a sense of momentum and motivation. This method helps individuals feel a sense of accomplishment and progress as they work towards becoming debt-free. It really all depends on what you prefer.

Loan consolidation and refinancing

Loan consolidation allows you to combine multiple loans into a single loan. This loan will have a new interest rate and repayment term. Consolidating can simplify loan repayment and make it easier to keep track of payments. In the case of student loans, consolidation may also result in a lower monthly payment by extending the repayment term, but it may increase the overall amount of interest paid. You can do this directly through FSA.

Refinancing student loans requires taking out a new loan with a private lender to pay off existing student loans. This can result in a lower interest rate, allowing you to save money on interest charges over time. You should also be aware that refinancing may also result in losing certain federal loan benefits (e.g. income-driven repayment plans, loan forgiveness programs, etc.). Our partner, Juno, is a great place to start looking at your refinancing options.

Taking advantage of forgiveness programs

Check if you’re eligible for student loan forgiveness programs. There are several federal student loan forgiveness programs available to borrowers who meet certain criteria, including:

 Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and Perkins Loan cancellation. 

  • Public Service Loan Forgiveness (PSLF) is available to borrowers who work in public service and make 120 qualifying payments. 
  • Teacher Loan Forgiveness is available to teachers who work in low-income schools and have been teaching full-time for five years. 
  • Perkins Loan cancellation is available to borrowers who work in certain public service jobs, such as law enforcement, nursing, or teaching. 

Employer-assisted student loan repayment programs

Some employers offer programs to help pay off your student loans. The employer may make direct payments towards the employee’s student loans, or they may offer a matching program to encourage employees to contribute to their loan payments. These programs can help employees pay off their student loans faster and reduce their financial stress, while also improving employee morale and retention rates for the employer. We love to see an employer that values financial wellness in the workplace!

Learn more button links to for employees page.
We’re here to help you break free from the paycheck-to-paycheck cycle and navigate your financial journey, one day at a time. At Work gives you the tools to take control of your financial future.


Get it on Google Play button links to At Work on the Google store on android.
Get it on Apple Store button links to At Work on the Apple Store.
More Stories
Image of a woman lounging in a beach chair reading a book. Clearly, she knows how to get the most out of your vacation.
How to Get the Most Out of Your Vacation Time