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From Broke to Free: 6 Student Loan Payback Paths That Work

Money Matters: Student loans aren’t just debt—they’re financial gravity. Invisible, heavy, and always dragging your dreams back down to Earth.

But here’s the thing: the system may be rigged, but there are legal ways out that the banks, schools, and bureaucrats won’t volunteer.

This issue is your escape manual.

We’re covering five battle-tested tactics for beating student debt into submission—without resorting to knocking over a Brinks truck.

Survey says: The total federal student loan portfolio is more than $1.6 trillion, spread amongst about 42 million borrowers.

The average federal student loan debt balance is $38,375.

52% of recent bachelor’s degree grads are underemployed one year after graduation - meaning they work in jobs that don’t require a four-year degree.

Even a decade post-graduation, about 45% still aren’t in degree-required positions.

Don’t be a statistic, read on!

Here is what on that portioned plate today:

😎 Our Favorite Resources
👍 6 Payback Student Loan Payback Strategies.
👌 8 Oddball Strategies to Wipe Out Your Student Loans Faster
🤷‍♀️ What’s up for next week

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Cool Links

Our favorite resources

💵Loan Resources

Start at the source with this government site for student loans: studentaid.gov.

For a clear, no-nonsense breakdown of your student loan options, check out this official guide from the Consumer Financial Protection Bureau: https://www.consumerfinance.gov/consumer-tools/student-loans/

👀ICYMI

New baby on the way? Check out 7 Tips to Prep for Baby with BIG Savings to get what you need without overspending!

📜Quote

"My student debt is really embarrassing because I majored in economics. Somewhere, something went wrong".

Comedian Maddy Smith

Today’s Main Event

Break Free from the Debt Grip: 6 Real Ways to Crush Your Student Loans 

It’s easy to feel trapped—like no matter what you do, your loans are always looming. But the truth is, you’ve got options.

Real ones.

This guide is your toolkit to climb out, breathe again, and finally get on top of your money - not under it.

But here’s the good news: there are ways out. Legal ones. Smart ones. Ones that don’t involve faking your own death or moving to a yurt in the Yukon.

We’ve got seven proven strategies to help you shrink that balance, slash your payments, or - yep - make the debt disappear entirely.

Let’s dive in!

#1 – Income-Driven Repayment Plans (IDR)

Don’t match your lifestyle to your loan. Match your loan to your real life.

If your student loan payment feels like a second rent check, you're not alone - and you don’t have to live like that.

Income-Driven Repayment (IDR) plans adjust your monthly payments based on what you actually earn—not what your loan servicer thinks you should earn.

How It Works:

  • The government offers four main plans: SAVE, REPAYE, PAYE, and IBR.

  • You’ll pay 5% to 15% of your discretionary income—which often works out to just a few hundred bucks a month, or even $0 if your income is low enough.

  • After 20 to 25 years, whatever you still owe gets forgiven. Yes, forgiven. As in, poof—gone.

Bonus: The SAVE plan (newest kid on the block) is the most generous yet, cutting your monthly bill and stopping interest from piling up.

If your income isn’t high, or your loans are huge, this plan can be a lifeline—not a noose.

Example:

You make $30K/year. Under the new SAVE Plan, your payment could be under $100/month.

How to Implement:

  1. Log into studentaid.gov.

  2. Use the Loan Simulator to compare IDR plans.

  3. Apply for the best fit directly through your account.

  4. Re-certify your income every year (automatically, if you authorize it).

WARNING: You must stay current. If you miss deadlines, you go back to a higher payment and lose progress toward forgiveness.

#2 – Public Service Loan Forgiveness (PSLF)

Work for The Man… and make him pay your bill.

If you work for the government or a nonprofit, you could nuke your balance in 10 years—tax-free.

How It Works:

  • Make 120 qualifying payments on an IDR plan.

  • Must be full-time at a qualifying public service employer.

  • After 10 years: complete forgiveness, no taxes owed.

Sneaky Details:

  • Qualifying employers include schools, hospitals, local/state/federal governments, and nonprofits.

  • Payments don’t have to be consecutive. Your 120 payments are cumulative, not tied to one specific job and so…

  • You can switch jobs—and still keep your PSLF progress. As long as each employer qualifies, you can change public service jobs midstream without resetting the clock.

How to Implement:

  1. Confirm your employer qualifies using the PSLF Help Tool.

  2. Enroll in an IDR plan.

  3. Submit your PSLF Employment Certification Form every year or when you change jobs.

  4. After 120 payments, apply for forgiveness.

PRO TIP: Keep records. Track payments. Bureaucracy loses forms like it’s an Olympic sport.

#3 – Deferment & Forbearance: Temporary Lifeboats

Don’t use a fire extinguisher on a flood. But in a fire? Use it.

These options allow you to pause payments, but they’re best used sparingly.

How They Work:

  • Deferment: Interest may not accrue (on subsidized loans).

  • Forbearance: Interest does accrue.

  • Can pause payments for 3 to 12 months, sometimes longer in hardship cases.

How to Implement:

  1. Log into your servicer’s portal (e.g., Nelnet, MOHELA).

  2. Look for “Request Deferment/Forbearance” and apply.

  3. Provide documentation: unemployment proof, medical bills, or other hardship.

WARNING: Interest can capitalize, meaning it gets added to your principal, so your debt snowball gets even meaner.

#4 – Refinance (With Caution)

If you’ve got leverage, use it. If you don’t, get some first.

Refinancing means getting a new loan with better terms to pay off your old ones. This can lower your interest rate—IF you qualify.

What It Can Do:

  • Reduce monthly payments

  • Cut interest (e.g., from 7% to 4%)

  • Shorten repayment time

Warning!: Refinancing federal loans with a private lender = lose all forgiveness options.

How to Implement:

  1. Check your credit score (aim for 720+ for best rates).

  2. Shop lenders like SoFi, Earnest, or Credible.com.

  3. Apply with multiple (soft inquiries won’t hurt your score).

  4. Compare offers and finalize.

Only refinance if:

  • You don’t qualify for IDR or forgiveness

  • Your income is stable

  • You have emergency savings (because private lenders don’t offer safety nets)

#5 – Bankruptcy: Nuclear Option, But It Exists

Only break the glass if the building’s on fire.

Contrary to popular myth, student loans can be discharged in bankruptcy—but it’s hard.

How It Works:

  • Must file an adversary proceeding as part of your bankruptcy.

  • Must prove “undue hardship” (not a defined term—interpretation varies).

  • Courts may consider income, expenses, disability, and efforts to repay.

New guidance (as of 2022) makes it slightly easier. Judges are finally showing signs of mercy.

How to Implement:

  1. Hire a bankruptcy attorney who specializes in student loans.

  2. Gather complete loan, payment, and income history.

  3. Prepare for a court fight (but one you can now win under the new standards).

This is a last resort—but for some, it's the fresh start they desperately need.

#6 – Student Loan Repayment as an Employee Benefit

Yes, companies can and do pay off student loans as an employee benefit. It’s a real and growing trend, especially among employers competing for younger talent burdened with debt.

The Legal Framework: Section 127 of the Internal Revenue Code (TEMPORARILY MODIFIED)

Under the CARES Act (March 2020) and extended by later legislation (including the Consolidated Appropriations Act, 2021), employers can contribute up to $5,250 per year per employee toward student loan repayment tax-free—for both the employer and the employee.

  • No payroll taxes for the employee

  • No income tax for the employee on the benefit

  • No deduction disallowed for the employer

This rule is currently in effect through December 31, 2025 unless extended by future legislation.

This is the same tax code section that already allowed up to $5,250 in tuition reimbursement. It now also applies to student loan repayment during this window

8 Out-of-Left-Field Ways to Kill Your Student Loans

1. Volunteer Your Way Out of Debt

Lend a hand—and get your loans paid for it.

  • AmeriCorps: Serve ~1 year and earn up to $6,895 toward loans (plus deferment).

  • Peace Corps: You may qualify for Perkins Loan forgiveness and federal deferment.

  • Pro Tip: Combine service with other forgiveness plans (like IDR or PSLF) for a bigger impact.

2. Make Side Cash by Playing Games or Rounding Up Change

Debt-busting apps can automate or gamify the process.

  • ChangEd: Rounds up spare change and sends it to your loan servicer.

  • Qoins: Similar idea—but lets you schedule lump-sum micro-payments.

  • Givling (R.I.P., but others may rise): Once paid off real loans with trivia.

Small payments + automation = long-term payoff.

3. Move Somewhere That Pays You—and Use the Bonus on Loans

Cities are literally paying people to relocate. Why not use that cash to crush debt?

  • Tulsa Remote: $10K bonus + free coworking

  • Topeka, KS, West Virginia’s Ascend Program, and others offer relocation deals

Pack bags. Get paid. Pay loans.

4. Live Like a Monk for a Year

Extreme minimalism for extreme payoff.

  • Move into an RV, van, or even a micro-apartment

  • Crash with family or join a co-living setup

  • Go “no spend” for 12 months and throw $2K/month at your loans

It’s short-term pain for long-term freedom.

5. Get a Job With Wild Loan Repayment Benefits

Some employers will match your student loan payments—or pay them outright.

  • Look for keywords: “student loan assistance” or “loan repayment” on job boards

  • Ask during interviews—even small startups offer this as a hiring perk

Tip: Up to $5,250/year from your employer can be tax-free (through 2025).

6. Negotiate a Settlement (in Default Only)

If you're in loan default, you may be able to settle your debt for less than you owe.

  • This requires a lump-sum payment and often legal help

  • Best done through a nonprofit debt counselor

  • Only available for federal loans in default

High risk, but big reward—not for everyone.

7. Turn Your Debt Journey Into a Side Business

Document your payoff journey and monetize it.

  • YouTube: Start a vlog, share your wins and struggles

  • TikTok: “Watch me pay off $100K in 12 months”

  • Monetize with sponsors, affiliate links, and paid content

If people watch strangers eat bugs, they’ll watch you fight debt.

8. Barter or Side Hustle Creatively

You don’t need cash—you need leverage.

  • Barter with small businesses: “I’ll manage your social media, you help with my loans”

  • Flip gear, sell vintage finds, or rent out your car, room, or parking spot

  • Put all “found money” toward your loans: rebates, bonuses, couch change

Use hustle income as a dedicated loan assassin fund.

Until Next Time

What’s Up Next Week

Managing student loans isn’t about doing what they tell you.

It’s about playing the game better than they do.

Your job is to pick the right tool at the right time—and never forget that your debt is not your identity.

You’re not a debtor.
You’re a strategist.
Now go win.

Coming up next week: Nico’s taking a well-earned break, but we’ve still got you covered. We’re diving into the wild world of bankruptcy—what it is, when it makes sense, and how to survive it with your dignity (and maybe your credit score) intact.

Please let us know how we did today by clicking on the survey below.

Email us with any questions!

Until next time—keep more, spend less!

Jim and the Hootsquad

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.