Pros and Cons of Dave Ramsey’s Student Loan Tips

Written by: Kristyn Pilgrim
Updated: 8/19/20

Dave Ramsey is well-known for his “get out of debt fast” tips. This financial guru has some pretty savvy advice regarding paying off debt, but not all of his advice on student loans should be followed to the T. 

In this guide, we’ll walk you through some of the best and worst tips Dave Ramsey has to offer on repaying student loans, so you don’t end up in a worse financial situation.

Tip No. 1: Get on a Budget 

This is one of the tenets of Dave Ramsey’s debt-free philosophy — and we’re completely on board with this tip. You can’t begin to pay more on your student loans responsibly without first understanding how much money you make, how much you spend each month, and what you’re spending this money on.

Whether you use your bank’s budgeting features, a free app, a virtual spreadsheet, or pen and paper, you need to look at your income and expenses and create a budget that makes sense to eliminate unnecessary spending.

Verdict: approved!

Tip No. 2: Pay More Than the Minimum Payment

We understand the logic behind this one. When you pay more than the minimum payment each month, you’ll pay off the loan faster and be able to save hundreds (possibly thousands) in interest charges. You don’t have to pay much more than the minimum to begin realizing these savings.

However, if you’re just out of school in an entry-level job or are already struggling to make ends meet, paying more than the minimum on your student loans might not be a smart option. 

If you’re budgeting and still nervous about your student loan payments, concentrate on just paying on time. The minimum is more than fine in this case. You can always make larger payments when you’re making more money down the line.

Verdict: It’s great if you can, but don’t stress it if you can’t.

Tip No. 3: Make Some Financial Sacrifices

This tip is great for anyone who is really focused on paying off their debt fast. Some tips include finding a roommate to save on rent, getting rid of cable or other unnecessary subscriptions, not dining out, and selling any furniture or items you no longer need. For anyone ready to pay off their student loans, these tips might sound exciting and appealing.

However, you’ll need to balance your priorities to decide if this tip is helpful to you. Sure, a roommate may save you some money, but if you don’t like living with other people and really enjoy your alone time, the headache might not be worth doubling up on student loan payments. If you can use some of these ideas to get ahead, great! But if none of them seem quite right for you, skip this tip.

Verdict: Cut where you can, but don’t go crazy.

Tip No. 4: Use the Debt Snowball 

The debt snowball is another popular Dave Ramsey trick, and it can help you pay down debt quickly without feeling like you’re spending more money on your debt. 

The key here is to focus on your smallest student loan and concentrate on getting that paid off early (while still paying your other loans). Once that’s paid off, apply your minimum payment from the first loan to your next smallest loan so that one can be paid off even faster. Continue this process, and you’ll be debt-free sooner than you would be by just making the minimum payment.

There’s nothing wrong with this tip. Just be sure to pay more than the minimum if you can afford it. 

Verdict: This is a great way to pay down debt.

Tip No. 5: Apply Raises and Tax Refunds to Student Loans

This tip is designed to help you spend your money better once you’re making more or when you receive large sums at once. The idea is that if you’re getting by on your $35,000 salary just fine and receive a $7,000 raise, instead of using that raise to rent a bigger apartment or make additional purchases, put that new money toward your student loans. The same goes for tax refunds — instead of buying a new TV, opt to pay down your debt.

The theory behind this tip is excellent, but we have a few complaints. First, if you receive a raise and have other needs in your life (medical expenses, a new car, etc.), it’s OK to use some or even all of this money for that purpose. 

If your car’s unreliable, you don’t have to buy a new one, but it might be smart to upgrade. Likewise, many families use tax refunds to build a savings account, which is always a smart idea. You can always apply the money leftover to your loans. 

Verdict: Do it if you can, but it won’t work for everyone.

Tip No. 6: Increase Your Income With a Side Hustle

This tip focuses on earning more money so that you can put your entire second job’s profit toward your student loans. We love this tip if you have time for a side hustle, but you don’t have to be guilted into turning over all your cash for a student loan payment. Be sure to take care of other needs you or your family might have as well.

Verdict: approved!

Tip No. 7: Don’t Bank on Student Loan Forgiveness

Dave Ramsey explains that even if you think you’re eligible for student loan forgiveness, it’s not always a guarantee. Many student loan forgiveness programs require graduates to work in certain fields (that they may not enjoy) for a set number of years to access these benefits. For this reason, he insists on paying down your loans as much as possible upfront in case student loan forgiveness doesn’t work out.

We disagree with this tip. Most student loan forgiveness programs are industry-specific, so you’ll likely be working in your field of study while earning loan forgiveness. It’s essentially a win-win scenario. Of course, you want to make sure you understand the terms of your forgiveness program before banking on it, but we don’t recommend paying more than the minimum if your loans will disappear in 10 years or less.

Verdict: Take advantage of student loan forgiveness if you can.

Tip No. 8: Refinance If It Makes Sense

The last tip we’re reviewing is about refinancing student loans. Dave recommends doing your research to find a lender with better interest rates than your current student loans. This could reduce your minimum payment, but if you use his snowball approach and pay the amount you were paying, you can pay off your loans sooner.

We’re all for this tip, especially if you have private loans. Private loans tend to have higher interest rates than federal loans, so refinancing can save a lot of interest over time. The only words of caution here are to make sure you do not refinance any loans that might be eligible for student loan forgiveness, as this could invalidate your eligibility. 

Verdict: This is great for anyone with high student loan interest rates.

Use’s Resources for More Student Loan Repayment Tips

Repaying your student loans can feel overwhelming, but you’re not alone. Approximately 70% of Americans graduate with student loan debt. On top of that, according to a survey conducted by Cengage, it will take around 20 years for students to pay this debt back.

At, we have resources that can help make your debt more manageable. Check out some of our latest guides on how to reduce your student loan debt quickly: