Paying Off Student Loans Early: The Full Breakdown

The simple math that gets you debt-free fast.

One of the best things about being a rehab professional is that you are not stuck in one job. We can work in any setting, take travel contracts, go PRN, and live anywhere in the country. Our licenses are in demand everywhere. For me, that flexibility was worth getting out of debt as soon as possible and forgoing loan forgiveness.

While Public Service Loan Forgiveness (PSLF) is cheaper on paper, often by $50,000–$90,000, it requires 10 years of full-time work at a nonprofit or government employer. That means no travel PT, no home health, no going part-time if you have kids. It also leaves you vulnerable to any governmental policy change during that 10 year period. A lot of people look at that trade-off and decide keeping their options open is worth the extra cost.

I was one of those people. My wife and I knew we wanted to have children and wanted the flexibility of reducing to part time if needed. So, I started aggressively paying off my loans, and managed to eliminate $170k in student loans in 5 years. This allowed me to pivot from debt-payoff to investing, quickly compounding to the point where I can now work 3 days per week. It all started with aggressive debt repayment.

See how fast you can pay yours off:

Is this the right path for you?

Before we get into our numbers, go ahead and run your numbers on the calculator.

Let's use the same scenario as our previous post, The Student Loan Repayment Guide: $150,000 balance, 6.5% interest rate, $90,000 average adjusted gross income (AGI).

Scenario: $150,000 balance · 6.5% rate · $90,000 average AGI · no dependents

If your loans originated before July 1, 2026, IBR is still on the table. The pure-dollar gap between IBR and payoff in this scenario is small; about $16,000 over 20 years. For me, the relief of not being indebted to the federal government for 20 years was worth giving up $16,000 in savings.

If your loans were disbursed post-July 1, 2026, IBR is no longer an option. RAP takes 30 years and costs about $102,000 more than paying it off. The case for aggressive payoff on post-2026 loans is unambiguous.

For the full comparison, including how IBR's math can shift with AGI optimization, the optionality cost of being on a federal plan for 20 years, and why RAP is off the table at standard income, see Why Income-Driven Student Loan Forgiveness Is Now a Financial Trap for Therapists.

The strategy here is to maximize income. This is the opposite of the other federal paths. PSLF, IBR, and RAP all reward minimizing AGI through pre-tax retirement contributions to lower your monthly payment. Aggressive payoff doesn't care about AGI. It cares about how many after-tax dollars you can put against the loan each month. Travel contracts, PRN at a second setting, expense cuts, whatever it takes to free up cash.

Should you refinance?

If you're paying the loans off early, refinancing almost always makes sense. Same scenario, $2,000/month:

Same scenario, $2,000/month payment

About $13,000 in savings. I personally refinanced any loan where I could get more than a 1.5% rate reduction. Below that, it didn't feel worth giving up federal protections, as noted below.

What you lose when you refinance:

• No income-driven repayment if your income drops
• No federal hardship deferment (some private lenders have their own, but it's not guaranteed)
• Ineligible to ever go back to PSLF.

If there's any chance you'll end up at a qualifying employer and are considering the 10 year PSLF, don't refinance.

Learn more about the pros/cons of refinancing: refi guide

Cut your expenses

The mechanics are simple: minimize the three recurring big line items.

Housing. This is the single biggest decision you will make. A huge recurring expense. The difference between a $1,000 and $1,900/month rental is $10,800/year. This single decision drops your $150k payoff timeline by 2.5 years.

Transportation. The second most significant decision you can make. A new car payment with insurance and depreciation runs $600–$800/month. That's $8,000–$10,000 a year, before fuel and repairs. $8k per year into your loans equates to roughly 2 years lopped off your repayment timeline.

Food. When I was in repayment mode, my wife and I tracked our spending and were shocked at how much was spent on quick bites out of the house or going out for drinks with friends. We quickly switched to cooking more of our meals and exclusively shopped sales at our local grocery store. We both learned to cook the meals we were craving and got pretty good at it. This was a few hundred dollars per month. Little choices added up and it surprisingly felt empowering to cook our own food while buying our freedom.

None of this is forever. Two to three years of low expenses plus high income is enough to eliminate most balances.

Max out your income

This is where rehab has an edge over most professions.

Travel PT/OT/SLP pays $70–$90/hour equivalent when you factor in the housing stipend and per diem (largely tax-advantaged, since they're reimbursements, not wages). That's $30,000–$50,000 more per year than a staff position in the same setting. Rocket fuel for loan repayment.

If your local market is slow, go somewhere that needs PTs. Rural areas and underserved markets consistently pay better. Your license is portable. Use it.

PRN is also a unique feature of healthcare professions. We have virtually unlimited opportunities to stack weekend PRN shifts in addition to our full time jobs. Hospitals, acute rehabs, and SNFs are always looking for help and pay 15–25% higher than the typical staff rate. It's not unusual to see $60/hr PRN rates. Two shifts per month, in addition to your staff or travel job, can clear an extra $900 take-home pay going straight to your loan balance. That's another 2.5 years lopped off the initial balance.

I balanced a part-time travel contract with PRN work and cleared $120k in a year. That income, combined with low expenses, is what made $170k in 5 years possible.

The full leverage: income vs expenses

Here's what changes when you push income above standard or cut expenses below the comfort baseline. Each cell is the years to debt-free at the respective income and expenses.

All scenarios assume $150K balance, 5% refi rate, 4% employer 401(k) match captured throughout

A surprising result when I ran these numbers: expense cuts produce more leverage per dollar than income stacking.

Cutting expenses from $47,000 to $30,000 at staff salary alone cuts the timeline from 11 years to 5. The simple choices of getting a roommate, driving a paid off car, and doing consistent meal prep can lop 6 years off your timeline. Stacking $22,500 of PRN income on top of staff salary at the same $47,000 expense level only buys 5 years back, with substantially more work involved.

If you can do both, the timeline gets to about 3 years.

The tax situation

Not much to take advantage of when paying off aggressively. W-2 employees have limited options for tax optimization.

You can deduct up to $2,500/year in student loan interest. At a 22% bracket that's $550 in actual savings. It also phases out between $80k–$95k modified AGI (MAGI) for single filers. If you're income-stacking, you may not get it at all.

Everything else is post-tax dollars, unless you get a travel per diem/stipend.

One thing worth asking your employer: some hospital systems offer student loan repayment as a benefit. Employers can contribute up to $5,250/year tax-free toward your balance. Not common, but worth asking during negotiations.

Before you start

• Run your scenario at the calculator and compare payoff vs. IBR
• Get refinancing quotes if you can save more than 1–2%; see the refi guide
• Don't refinance if PSLF is still on the table for you
• Find your three biggest expenses and cut them
• Find out how others maximized their incomes in our subreddit

This is Phase 1, Step 6 of Get to Zero: the aggressive-payoff path.

Compare every option in the Student Loan Repayment Guide.

Disclaimer

I'm a PT, not a financial advisor. This is not financial advice. Please consult a qualified professional before making major decisions about your loans.