Paying Off Student Loan Debt Early

If you have student loan debt, are you planning to pay it off early? Or are you simply making the minimum payments because you’re comfortable with the low interest rate, tax deduction, and low payments?

For the longest time, I’ve been in the second camp, happy to pay off my student loan debt using the minimums, knowing I had other financial goals that took precedence.

Well, that time has come and gone. With the down payment of our house complete, repayment of our high-interest auto loans, and money saved up for our first baby, the only big financial hurdle Mrs. PT and I currently face is the repayment of our student loans. And we’ve already taken action…

Last month we paid off one of our loans with one big chunk payment. Most of the funds came from our most recent ESPP flip (forced extra savings using company stock). And by the end of the summer, we should be able to wipe out the last student loan.

Overall I’m definitely proud to be able to close out this debt, but I do have mixed feelings whether this is the best move financially. With cheap stocks, real-estate, and other investments on sale right now, I wonder if this money could have been better served elsewhere.

But I won’t be wondering long, as there are huge benefits to having this debt behind us: more money available for savings, more flexibility in our budget, one less payment to worry about, etc. Not to mention, student loan debt is the debt that would never be forgiven, even in bankruptcy. Lastly, it just feels good to be rid of it.

How about you? What did you do, or what are you planning on doing with your student loan debt?

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon. He created this website back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence. He uses Personal Capital to track his wealth. All the content on this blog is original and created or edited by PT.


  1. Simple… Keeping too much money around will just cause my wife to shop more.
    So my extra money is going towards student loans.
    I am reducing debt while keeping her shopping in check 🙂

  2. simple math- If you can beat the interest rate in other investments than invest in other things- stocks, first time home buyer tax credit since real estate is relatively cheap in recent history, and you are looking to buy a home. Student loans provide great tax relief even if you don’t itemize
    age 25
    27,000 in student loans

  3. John Rivers says

    I have about $30,000 in student loans. I have desperately been trying to pay it back.

  4. I am paying of my student loans in small installments. While i would prefer to pay it off in one big chunk, hence avoiding paying a large amount of interest, i am just not able to do so due to other financial commitments.

  5. Hello Thank you for the conversation on student loans. I am lucky to only have $6500 from Undergrad and Grad. I am very tempted to use the $8K home buyers tax credit that I will receive to pay this off. However, I am also really interested in investing in the stock market with stock being so low. I was thinking of paying half of the student loans and investing the other half in the market.

    Any ideas?

  6. @carl – Thanks for sharing your plan, man.

    @My Journey – Thanks for sharing the article and reminding us about the IRS’ rule on punishing earners.

    @Doctor S – Good to have you back. I need to swing by your blog soon.

    @Matt, Stephanie, Single Guy, Tony – Thanks for sharing your plan.

    @J – Dude, you need to write up that guest post on daily interest accruals on student loans.

    @Pete – I like that…”kick Sallie Mae to the curb!”

  7. Bible Money Matters says

    I paid my student loan off early, just because it was the only non-mortgage debt that I had left. The interest was low, and it was tax deductible, but i just don’t like holding onto any debt, no matter how low the interest. I still remember the nice feeling I got after we cut that last $2500 check and paid it off for good. Phew.. no more sallie mae – kicked her to the curb.

  8. I’ve always favored getting rid of student loan debts as quickly as possible. The daily interest accrual means you have to look not only at the dollar amount borrowed, but the extra money paid over time. When I got the balance low enough, I transferred the remaining to a 0% credit card and killed the rest.
    Then again, that was before the credit market self-destructed…

  9. My fiance and I are doing the same thing. Slamming one at at time until we pay it off and creating the snowball.

  10. Single Guy Money says

    My student loan is my only other debt after my mortgage. I haven’t really done much to get rid of it since the rate and payments are low and I get to write off the interest.

    Last year, I made too much to take the full deduction so it is time to start paying it off.

  11. Stephanie PTY says

    The first of my loans just entered repayment last month. My other two loans will enter repayment in September. I have no plans to pay them off early, at least not in the next five years (as far as I can tell). I have other goals to take care of during that time, so it’s simply not prudent. Someday, when other things are taken care of, I might change my tune, but I’m happy with paying just the minimums for a while.

  12. Not surprisingly, I followed the same road. Right now the wife & I are focused on our 4 (now 3) credit cards, then auto loan, then a combination of our 2nd mortgage (did 80/20 loan with zero down 2 years back) and our student loans.

    Our combined SL debt is around $65,000 so it’s nothing that will go away overnight! However, that said… by the time I get to making larger payments on that debt, I’ll have a lot more cash flow so I’ll be able to knock it down faster than one might originally think!

    Congrats man… I’m envious, but I’ll be there soon enough. After all, I’m spending less than I earn so it’s bound to happen. 🙂

  13. I started out with 94k in private loans when I graduated in 2006. It was at a variable rate at 8% back then. It is all the way down to 3.20% right now. I am trying to take advantage of significantly less interest building up by paying almost half of my monthly income every month towards my loan. I pay it every pay period too. I am trying hard to make it disappear ASAP.

    I live at home so it is my only financial hurdle so I am with you PT, trying to tackle it now! Sorry I been away but I am back!

  14. My Journey says


    Wanted to share – Student Loans not always tax deductible:

  15. I’m doing the same as you did. The student loans are the last items on my snowball. Now of course some will have been paid off by then, just with the regular payments. But for the 1 big one we have left it will be paid off after the cars and credit cards. Plus once the snowball is that big it will only be a couple of months to pay the last student loan off.