Wouldn’t it be nice if there was a way to make your student loans disappear? While there’s no magic bullet, there are ways to get some free money for student loans and make a bigger dent in your debt.
If you think you’ve exhausted every resource for paying off your student loans, I challenge you to a review of this list. Not everything here will work for you, but something will.
How to get free money to pay off student loans
Whether it’s earning money back on your loan or having some of your debt canceled, these are ways to get free money for student loans and potentially pay them off faster.
1. Earn forgiveness through income-driven repayment
If you’re having trouble making your monthly payments on your federal student loans, you may not be enrolled in the right repayment program.
Fortunately, there are three repayment plans that may be helpful, plus result in having some of your student loan debt canceled:
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
These programs lower your monthly payments to be in line with your income and qualify you for loan forgiveness after 20 to 25 years of consistent repayment.
A couple of caveats:
1. Forgiven loan amounts may be considered taxable income and taxes are due the same year you receive forgiveness.
2. Student loans stretched over 20+ years could end up costing you more in interest fees than the 10-year Standard Repayment Plan.
However, if you’re missing payments because you can’t afford them, that means late fees and, if you’re not careful, default. And if you have a lot of student loan debt, holding out for forgiveness could be worth it. These income-driven repayment plans are worth a closer look.
2. Serve the public for 10 years
If you have federal Direct Loans, consider the Public Service Loan Forgiveness program (PSLF).
To qualify, you must:
- Work at least 30 hours a week for 10 years for a qualifying government or non-profit organization (both the Peace Corps and AmeriCorps are qualifying organizations).
- Make 120 qualifying monthly payments under one of the income-driven repayment plans.
- After making your 120th payment, submit the PSLF application for forgiveness.
- Make sure you are still working for the qualifying organization when you submit the application, as well as when you receive the forgiveness.
Even better, loans forgiven under PSLF are not considered taxable income.
3. Sign up for student loan auto-pay
Most private student loan servicers offer an interest rate discount (usually 0.25%) when you set up auto-pay. This will save you hundreds of dollars over the life of your loan – not a ton, but money you can use to pay off your debt a bit faster.
Call or visit your loan servicer’s website for auto-pay information.
4. Apply for forgiveness specific to your career
If it won’t interfere with a full-time job you already have (and want to keep), volunteering can be a great way of getting free money to pay off student loans.
As already mentioned, both the Peace Corps and AmeriCorps are qualifying organizations for the Public Service Loan Forgiveness Program.
Through the Peace Corps, you can serve up to four qualifying years (toward the 10-year qualifying minimum). Through AmeriCorps, you can serve one qualifying year, but with a stipend and education award that you can put toward student loan payments.
You can also volunteer in exchange for student loan payments via crowdfunding sites like Zerobound and SponsorChange.
6. Crowdfund your student loans
Rather than volunteer your time, you can try a straight-up gifting campaign to crowdfund free money for student loans. While Kickstarter may seem the obvious choice, try sites more geared toward campaigns for educational expenses: Generosity by Indiegogo, YouCaring, and GoFundMe.
7. Rent out your home
Do you have a guest room you could turn into a regular rental? Do you have family and friends you could stay with if you were to rent out the whole place?
Or maybe you’re planning on being gone anyway, which is a no-brainer way of making money on a space that would otherwise be empty. Airbnb has the best name recognition, but it’s not the only game in town. Check VRBO, HomeAway, and Flipkey, too.
8. Sell your stuff
If you don’t need it or love it, why do you have it (especially if it represents free money for student loans)?
The obvious go-tos for selling pretty much anything are Amazon, Craigslist, eBay, and Facebook Groups. But if it’s clothes you’re selling, you’ll likely get the best return via clothing-specific sites, like Twice, Poshmark, and ThredUP.
For anything that won’t sell online, never underestimate the power of an old-school yard sale, especially for furniture and miscellaneous household items.
9. Find money in your budget
It might not be the most fun, but one of the best ways to find free money is in your own budget.
Especially consider the categories of food and entertainment, where we tend to do the most spending on unnecessary items. For instance, if you haven’t already, cancel cable once and for all! You have plenty of other more affordable viewing options, including Netflix, Hulu, Amazon Prime, and an HDTV antenna.
Where else in your budget can you find money to put toward student loans instead? Think of the freedom you’ll have later my making a few sacrifices now.
What do you think?
Finding free money to pay off student loans requires a combination of time and resourcefulness. What works for you, what doesn’t, and what would you add to the list?
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|