Why and How to Pay Off Student Loans In Your 30s

Jaron Pak
A woman in her 30s looking happy at her student loan bill.

Forty-three million Americans collectively owe more than $1.5 trillion in student loans. On top of that, if a graduate makes it into their thirties without paying off their loans, they begin to face a variety of other financial pressures that come along with major life events such as marriage, children, buying a house, and saving for retirement.

If you’re a thirty-something graduate that is still struggling with student debt, here are some of the best reasons to try to pay off your debt as soon as possible, along with some strategies to do so quickly and effectively.

Table of Contents

Why Pay Off Student Loans in Your 30s?

While there are many advantages to paying off your student loans early, here are three of the most important factors to consider: 

Less Interest

Typically, the longer it takes you to pay back a loan, the more you’ll pay in interest. Cutting a mortgage from 30 years to 15 years, for instance, can save a homeowner tens of thousands of dollars in avoided interest payments. In the same vein, if you pay off your student loans early, you’ll avoid wasting your hard-earned money on the unnecessary interest that would have built up over time.

Financial Freedom

While debt is a normal part of life for most Americans, it doesn’t mean it should be embraced. Whenever possible, it’s good to get out of debt and establish a financially free life. This includes your student loans. If you can pay off your loans in your 30s, you’ll be able to free up your funds to be repurposed into other, more forward-thinking endeavors.


One of the best forward-thinking investments that you can make with your money is to invest it in a 401(k), IRA, or other retirement savings option. Of course, in order to properly save for retirement, you need to put away thousands of dollars per year, which is much easier to do when you don’t have student loan payments soaking up your monthly income.

How to Pay Off Student Loans in Your 30s

While each person must craft their own loan repayment strategy, here are several best practices that can make paying back student loans quick and efficient:

Avoid Certain Repayment Plans

There are many different loan repayment plans. Some of these are designed for very long repayment periods, such as a Revised Pay as You Earn plan or an extended repayment plan. However, if you want to pay off your loans quickly, you should opt for a standard repayment plan, as it is simple, straightforward, and not too interest-heavy.

Avoid Taking on More Payments

Another key to helping pay off your student loans is avoiding taking on other debts or monthly payments unless absolutely necessary. For instance, if you get married and you and your spouse both work, having two cars will likely be a necessity. However, buying affordable used cars would be a better choice than splurging on a pair of brand new models.

Create/Update Budget

If you’re in your 30s, you’ve likely had a budget of some kind or another for a while now (and if you don’t, it’s a good time to make one). However, even if you have a budget already, it may be time to update it. Comb over your income and expenses and look for any way to free up extra money to go towards your debts.

Make Extra Payments

One of the simplest ways to pay down your student debt quickly is to make extra payments as you go. This is better than saving a lump sum on your own to pay off your account early. If you make extra payments from time to time, these can go directly towards your principal loan (instead of partly going towards the interest on the loan), thus more effectively reducing the amount of money that accrues interest in the future.

Make Bi-Weekly Payments

If you know that you struggle with making extra payments on your own, one way to ensure that you funnel extra money towards your student loans is to set up a bi-weekly payment plan. This divides your monthly payment in half and has you pay it every other week. A natural side effect of this method is that over the course of the year you end up making two extra payments, both of which go directly towards the principal of your loan.

Pay Off Capitalized Interest

If you’ve utilized something such as a loan grace period since you took out your student loans, you may have accrued capitalized interest on your loan — that is, unpaid interest that is added to the total principal of your loan, thus increasing the amount of principal that is used to calculate future interest. Make sure to pay this off as quickly as possible, as this will free you up to begin paying down your principal and, by extension, reducing the overall interest you pay over time.

Refinance Your Loans

If your loan has a high interest rate, it may be worth taking the time and effort to refinance your loan. This can help to reduce your interest and allow more of your funds to go directly towards paying back the principal of the loan.

Set Up Auto-Pay

Another way to help keep you accountable when it comes to your repayment plans is to set up an auto-pay schedule. Simply knowing that money will be withdrawn from your account on a regular basis is a great way to make sure that you keep a tight budget and don’t waste money on unnecessary purchases.

Take Advantage of Tax Deductions and Credits

Finally, make sure to capitalize on any tax deductions and credits that can help you pay back your student loans more aggressively. Some of these are directly related to your loans, such as the student loan interest deduction that allows you to write off as much as $2,500 in interest from your loan payments.

In addition, it’s also good to try to take advantage of your tax return, in general, as an opportunity to annually put a larger sum of money towards paying off your loans.

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