It may sound unbelievable, but the student debt of US college graduates has climbed up to $1,2 trillion and it’s still growing. Experts think that the difficulties of paying back student loans make younger generations delay other traditional steps of adulthood like getting married, buying a home or having children. Although a student loan in most cases doesn’t inhibit debtors to take out mortgages or car loans, paying back two loans at the same time sounds like mission impossible, especially for people with entry-level jobs. In this article we’re going to list some of the most creative ways to pay off different kinds of student loans.

Federal Student Loan Forgiveness

 Most federal loan debtors wish for their loans to be forgiven. Unfortunately this happens only in a limited number of circumstances.

  • Closed School Discharge– if the university closes while the student is still enrolled or 120 days after he/she withdraws.
  • Total and Permanent Disability Discharge
  • Death Discharge
  • Discharge in Bankruptcy – this decision needs to be made by a bankruptcy court and it will rule for loan forgiveness only if the debtor can’t maintain a minimal standard of living, or has been in active repayment process for more then five years before declaring personal bankruptcy.
  • False Certification of Student Eligibility or Unauthorized Payment Discharge
  • Unpaid Refund Discharge – happens if a student withdraws from university, and the institution doesn’t pay the refund to the Department of Education or to the lender.
  • Teacher Loan Forgiveness – teachers who have worked full time in low-income elementary or secondary schools for more than 5 years can get $17,500 of their student loan forgiven.
  • Public Service Forgiveness – for public service workers who have already made 120 payments on the direct loan, the remaining balance might be forgiven.
  • Perkins Loan Cancellation and Discharge – this is a special type of loan program that can be forgiven or discharged only if debtors work in some of these industries or institutions: US Army, law enforcement, child or family service, professional provider of early intervention services, teacher, volunteering in Peace Corps or any other action program, Head Start worker, nurse or medical practitioner.

Paying Off a Student Loan in a Regular Way

If the debtor doesn’t qualify for any of these forgiveness programs he/she will need to pay off the loan in a regular way. Most debtors choose some of the regular payment plans and although nationwide statistics on this matter sounds very discouraging, many people succeed in giving all their student loan payments in time. A recent report made by the Brookings Institution brought a lot of optimism to future college graduates, since it concluded that:

  • Quarter of the overall increase of student debt in the US since 1989, was made by post-graduates.
  • Average income of college-educated Americans is constantly getting higher.
  • Student loan monthly payments have remained the same during last two decades.

It’s good to know that things are not as bad as they look in the statistic sheets and these are some of the tips that will help college-educated Americans to liberate themselves from student loan burdens in the fastest way possible:

  • Treating Student Loan as a Mortgage- minimal mortgage payments are usually much higher than the ones required from student loan debtors. Treating student loan as a mortgage and doubling minimal payments each month will cut the repayment period in half and it will also drastically lower interest rates.
  • Creating a 3 or 5 Year Plan- planning is everything when it comes to student debt, knowing exactly when this financial adventure in going to end will make debtors work harder to fulfill their goal.
  • Establishing a College Repayment Fund- making a college repayment fund and adding a few hundred dollars each month to it can make student loan repayment much easier.
  • Working Part-Time Jobs While Still in College- it’s important for students to start working as early as possible, if they direct their part-time job earnings towards paying their student loan, they will pay it off much faster and with a smaller percentage of interest.

Creative Ways to Pay off a Student Loan

Except regular repayment plans and federal loan forgiveness programs there are also a number of other ways to pay off student debt. These are different in each state and they might require students to change their plans for the future. These are some of different payment plans that we found in different states across the US:

  • Kansas Rural Opportunity Zone- the State of Kansas offers student loan assistance for debtors with college degrees who want to permanently settle in some of its rural opportunity zones.
  • New York Young Farmers Loan Forgiveness Program- the State of New York offers student loan forgiveness for post-graduates who want to operate a farm on full time basis for more than five years on the state territory.
  • Moving to Niagara Falls- this city located close to one of the main tourist attraction on the border of US and Canada, doesn’t want to lose its city status, and they are ready to give $7,000 for paying student loans of its new residents.
  • USDA Veterinary Medicine Loan Repayment Program- this program applies to post-graduate veterinarians who are ready to serve 3 years in designated areas. USDA will pay up to $25,000 per year for people who apply.