Feel like you're suffocating under a pile of student loan debt? Here's how to get out from under it

• Paying off your student loans quickly starts with a thorough, well-researched budget.
• Private loans often charge higher rates than federal ones, so you may want to pay those off first.
• You'll free up cash to pursue other financial goals when you pay off your loans early.

Paying off student loan debt is a significant milestone. It's an accomplishment that frees up hundreds of dollars in monthly budgets for many borrowers. 

However much you owe, paying it off quickly may offer peace of mind and the room to pursue other financial goals. Here's what you need to know about how to get out from under your student loan debt fast. 

Where should I begin to start paying down my student loans fast?

The path to paying down your student loans starts with a budget. Mark Reyes, a certified financial planner with the personal-finance app Albert, recommends the 50/20/30 budget, where 50% of your income goes toward your essentials, 20% to your savings and investing, and 30% to whatever you want. 

Begin this process by making a spreadsheet on your computer, using a budgeting app, or trying out a budget worksheet from a student loan company like Sallie Mae. 

"Know who you owe and how much you owe," says Rick Castellano, spokesperson at the student loan company Sallie Mae. "It sounds simple, but that's one of the first things that we talk to students about. When it's a federal student loan, that means knowing who your federal student loan servicer is, and that can change from time to time. That'll help you to build the strategy around paying it down faster."

You may also consider starting to pay off your student loans while in school, an option some students might not know they have. A recent report from Sallie Mae finds that 56% of families are making student loan payments while in school, which helps save on the overall cost of the loan.

"If you're a current student and you want to start making payments now, you can definitely knock out some of the principal and make small payments to make sure that the interest doesn't accrue," Reyes says. "That way, you're taking actionable steps to lower that debt."

Why pay off my student loans early?

Paying off your student loans early frees up cash in your budget that you can then reallocate to other financial goals. You'll also lower your debt-to-income ratio, which you calculate by dividing all your monthly debt payments by your gross monthly income. The lower this ratio, the more likely you are to get approved for a loan and for better terms. 

You may be able to start putting extra money toward your retirement savings once you pay off your student loans, setting yourself up for future financial success. 

Castellano emphasizes that trying to pay off your student loan debt fast shouldn't come at the expense of ignoring other financial obligations. High interest credit card debt or a car loan may have higher interest rates than your student loan, so trying to pay off your student loan first might cost you more in total interest across all your debt.

What should you do before paying off your student debt early?

Reyes says you should make sure you have paid off all of your so-called toxic debt with high interest rates such as credit cards and personal loans before making substantial payments toward your student loans.

"A lot of folks get kind of fixated on just becoming debt free and don't realize that there's good kinds of debt, and then there's bad," Reyes says. "Making sure that you prioritize paying off your toxic debt first is always a great sign to make sure that you know you're healthy enough to pay off your student loans."

Reyes also suggests building an emergency fund to cover three to six months of your essential expenses. This can help protect your finances if you lose your job, face a large medical bill, or incur other unexpected costs. You'll have a safety net to fall back on instead of having to take on high-interest credit card debt or a personal loan. 

Should you pay off federal or private student loans first?

When deciding between prioritizing your federal or private student loans, Reyes recommends the "avalanche method." With the avalanche method, you make minimum payments on all of your debt and then focus any extra money on paying down your highest interest rate debt. 

Private loans often come with higher interest rates and with fewer protections, so in many cases it makes sense to pay them off first. For example, the interest-free repayment pause on federal loans during the pandemic provided a good opportunity to pay down private loans — which continued charging interest — more aggressively. 

On the other hand, any payments on federal student loans made during the payment applied directly to the balance, potentially reducing the amount of interest you pay over the life of your loan by hundreds or even thousands of dollars. 

What is the biggest benefit to paying off your student debt fast?

There are many pros to paying down your debt quickly, including the freedom to take your money and put it somewhere else, Castellano says. It may help you accomplish other financial goals and achieve financial independence, he says. 

Many of the clients Reyes meets with at Albert talk about feeling like their student loan debt is never going to end, which takes a toll on their mental well-being. Reyes says paying off student loan debt early helps free borrowers of the emotional burden that accompanies it.

"If you can get the win of paying off your student loan debt, it encourages you to realize, 'Oh, what else can I do with my finances? What other financial goals may I be able to achieve?,'" Reyes says. "Maybe I can afford that house. Maybe I can get this car. Maybe I can get my credit score even higher now because I know that I can accomplish this."