Three Approaches for Prioritizing Student Loan Debt

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Three Approaches for Prioritizing Student Loan Debt

Today’s post is about prioritizing debt. As a person raised by blue collar, hard working parents, I was taught to never allow myself to go into debt. Debt was a dirty word. My parents bought used cars with cash. Their only debt was their mortgage.

Fast-forward to the 21st Century. These days, it is nearly impossible to avoid debt, especially if you aspire to have a college degree and to own a home. Most of us have student loans, car payments, mortgages, and credit card debt. How should student loans be prioritized among all of these various bills?

Here are 3 different approaches for prioritizing debt:

1. Pay off the lowest balance first.

Many people choose to prioritize their debt according to how large the amount owed is. The idea is that paying off a smaller debt will allow you to cross it off your list completely, thus reducing your overall stress. Be warned: this is NOT the best way to prioritize debt. This method is more likely to reduce your bank balance than your stress level.

2. Pay off the highest interest rate first.

This is a better way to prioritize your debt. It will allow you to pay less in the long run. To follow this rule, you will need to 1) make minimum payments for all debts and 2) put any extra money towards paying off the balance of whichever debt has the highest interest rate. According to, this strategy will allow you to come out on top.

3. Get information on student loan forgiveness, and make minimum student loan payments until your loans are forgiven.

An important factor to consider is student loan forgiveness. The Suber Group can help you evaluate your student loan debt and can put you on the path to student loan forgiveness. If your student loan forgiveness program requires you to make a certain number of payments, you should continue to make those minimum payments while allocating any extra money to whichever debt (apart from student loan debt) has the highest interest rate.

While debt is unavoidable these days, it is possible to be smart about paying off your debt by prioritizing. Financial specialists have done the math for you already, and following their advice can save you money over time.

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