Thomas Hill graduated from Auburn University in May 2010, buoyed by his degree in industrial engineering - and weighed down by a student loan debt of $120,000.

According to the Project on Student Debt, at least nine times more people have significant student loan debt than did 10 years ago.

The average debt amount is higher, and more graduates owe money after college. More people are faced with quandary of how to begin cutting off the heads of their hydra of debt.

It turns out that today there are an increasing number of novel solutions to the student debt problem, including volunteer work, public service employment, working in locations of great need and serving in the National Guard.

“There are a lot more options than there were in the past,” said Mark Kantrowitz, publisher of Finaid.org. “There are more loan forgiveness plans and flexible repayment plans.”

Kantrowitz and Michael Reynolds, executive director of Student Financial Service at Auburn University, offer these alternatives to pay off student loan debt.
Join Americorps or the Peace Corps - “If you don’t have a job coming out of college, you can volunteer and earn money to pay off debt,” suggested Kantrowitz.

Americorps members tutor youth, build affordable housing and clean parks and streams, among other projects. They work for organizations like Habitat for Humanity and Boys and Girls Club. About half are paid a modest annual living allowance.

The benefit is an annual award of $4,725 to be applied towards education or qualified student loans. Members can also work part time, and the award is prorated.

While Americorp may not be the cushy job graduates seek, 86 percent of former members say the experience was invaluable and helped them in their job and other pursuits.

The Peace Corps, for those who travel and serve 27 months, will provide a “readjustment” stipend of $7,425. A portion of this can be applied toward student loans. Those who have Perkins Loans receive the real payoff. Up to 70 percent of their loans can be canceled, according to their term of service.

Join the Army Reserve or National Guard -“Student loan repayment is a great way to assist new soldiers as they try to assist the nation in becoming National Guard members,” said Capt. Andrew Richardson of the Alabama National Guard.

Those who sign up for six to eight years in these branches can earn up to $50,000 toward paying off their student loans. Those who join the Army, Navy or Air Force have similar benefits, as much as $65,000 in loan repayment.

Work in a location of great need - There are many areas of the country that have shortages of certain professionals. They need physicians, nurses, dentists, counselors, teachers, social workers, clinical researchers, veterinarians and physical therapists. Programs have been developed to fill these needs and assist with student debt reduction in exchange for service.

The National Health Service Corps provides up to $50,000 for student loans (nhsr/hrsa.gov).

The Nursing Education Loan Repayment Program pays 60 percent of qualifying loan balances (hrsa.gov). Under the Veterinary Loan Repayment Program, veterinarians can earn up to $25,000 for three years of service.

Teach for America provides a voucher for $9,450 for two years of educational service, and the National Education Defense Act forgives up to 100 percent of a teacher’s debt for certain services (studentaid.ed.gov, aft.org).

Many law schools forgive the loans of students who work in public interest or nonprofit positions (equaljusticeworks.org).

See finaid.org/loans/forgiveness.phtml for more information on many of these options.

Take advantage of low income - “Generally speaking, if your debt exceeds your starting salary, you’ll probably have a benefit,” said Kantrowitz.

Kantrowitz is referring to a new federal program, the Income Based Repayment (IBR) plan, which restructures a person’s federal student debt when it is high relative to their income and family size. Their new payments cannot be more than 15 percent of their discretionary income, and can even be nil if they're in dire financial straits.

When enrolled in an IBR plan any balance unpaid at the end of 25 years will be forgiven, as long as all payments have been made. The downside is that a recipient has to provide documentation every year to prove they qualify (See studentaid.ed.gov).

Work in a public service career - Those working in public service fields can have their remaining loan debt forgiven after just 10 years, if they have federal direct loans or an IBR plan. All loan installments must have been paid.

To qualify, a person must work for a nonprofit public service organization. This includes jobs in teaching, early childhood education, law enforcement, government, family or child services, public interest law, public safety, public health and the military (See studentaid.ed.gov).

Get a federal job - The U.S. government wants good people in certain positions so much that they’ve been authorized use loan repayment as an incentive. Go to usajobs.gov to see find employment opportunities.

Extend the term of the loan - For federal student loans, “Repayment has to be at least $50 a month, which has to be paid off in 10 years,” explained Michael Reynolds with Auburn University’s Financial Aid office.

Most people have to pay a much higher monthly amount in order to retire their debt in 10 years.

“For most borrowers with long term financial difficulties, the best alternative is an extended repayment plan, generally 20 years, or an income based repayment plan,” said Kantrowitz.

The upside of an extended plan is lower payments. The downside is doubling the interest.

“When you look at how much interest you pay, it’s horrible,” said Reynolds.

“You don’t want to be paying for your student loans while your kids are in college,” added Kantrowitz.

Embrace frugality - Many graduates are forgoing the plasma TV and taking advantage of a new crop of plans like “Dave Ramsey’s Total Money Makeover” to provide a concrete blueprint for paying down debt.

Jonathan Balaban graduated in January of 2009 with $18,000 in loans. He paid it all off in six months.

“Most graduates can continue to live like a college student after college,” he said. “I made a decision to live as cheaply as I could and I was able to send 90 percent of my paycheck toward paying off my loans each month.”

Thomas Hill is married, with a child, and will have a more uphill climb. But he’s optimistic that he can whittle away his debt by using Ramsey’s plan.

“We aren’t going to buy any new cars until all debt is paid off. We aren’t going to purchase a home,” he said. “Also, my wife is going to be working every weekend as a nurse on night shift.”

Hill hopes to vanquish his student loans in three to five years. Will he make it? Cheer on this Auburn grad's progress at his blog, thesixfigurediplomapayoff.com.