Whether you’ve just graduated from college or you’ve been making payments for years, your student loan debt can seem endless. When you take out a federal student loan, the Standard Repayment Plan is 10 years. This might be in line for some people, but not for everyone.
Many Americans with student loan debt expect to finish repaying it in their 40s—about 20 or so years after graduating from college, a Citizens Bank study shows . That’s more than double the timeline that the Standard Repayment Plan lays out.
And not all loans are treated equally. Your major, amount borrowed, loan type, and chosen career path can all influence how much you could end up paying back. But before you panic, know that there are steps you can take to help reduce your student loan debt.
Federal Student Loan Terms
While most federal student loans use the standard, 10-year repayment plan, other loans have different options. (And both Direct Consolidation Loans and FFEL Consolidation Loans offer 10- to 30-year repayment
Here are the repayment plans the U.S. Department of Education has set up for federal loans.
• Standard Repayment Plan: up to 10 years
• Pay As You Earn (PAYE) Plan: up to 20 years
• Revised Pay As You Earn (REPAYE) Plan: 20 or 25 years
• Income-Based Repayment (IBR) Plan: 20 or 25 years
• Income-Contingent Repayment (ICR) Plan: 25 years
Income-driven repayment plans—PAYE, REPAYE, IBR, and ICR—forgive any outstanding balances if they aren’t completed by the end of the term. (Though you may have to pay taxes on the forgiven balance.)
Private Student Loan Terms
For those who’ve taken out private student loans to pay for school, the payment plan may differ from those with federal loans. Some private lenders have terms that are 10 years like their federal counterparts. Other lenders cap terms at 20 or 25 years.
The repayment timeline for private loans varies—for some private loans, you might have to start paying it back while you’re still in school. And they might have fixed or variable interest rates. Because of this, it’s hard to specifically gauge how long it takes the average person to pay off their private student loans.
Paying Off Your Student Loans Sooner
Regardless of the type of loan you have, there are steps you can take to help get rid of your student debt sooner than you originally thought.
Paying More Than the Minimum
Paying the minimum might be what you can afford right now. But if you come into some extra cash—whether through a bonus at work, a gift from a relative, or your tax refund—you can use this money toward your student loan balance.
Cutting away at your debt when you can—even if it’s not as often as you’d like—can help shorten the length of your repayment.
Want to pay your student loans off fast?
Understand how student loan
refinancing can help.
Refinancing your Loans
While consolidating your federal student loans with a Direct Consolidation Loan is an option for some, those with private student loans may want to consider refinancing instead.
Refinancing your student loans means a private lender pays off your student loans for you and then you pay back your lender with a new loan, new interest rate, and new terms. Ideally, your interest rate would be lower, which could save you money on interest over the life of the loan.
Refinancing allows you to combine all your loans, private and federal, into one for more streamlined payments. But if the interest rate offered isn’t lower than what you’re currently paying, or there are more fees, you might want to keep your options open.
And keep in mind that when you refinance, you’ll lose your federal loan benefits like income-based repayment plans or forbearance. If you’d like to continue taking advantage of those benefits, refinancing might not be for you right now. Ultimately, refinancing should be helpful, not cause more stress or create more debt.
Choosing Another Payment Plan
With federal student loans, you may qualify for income-driven repayment plans. With these plans, your discretionary income and family size determine how much you pay on a monthly basis. This can be helpful for those in entry-level, lower paying positions, as they could pay less monthly early on.
And tools like SoFi’s student loan calculator can help estimate how much you’ll being paying each month on your student loans. Once you get an estimate, you can more easily decide if you want to stick with your current payment plan or switch to another.
As your financial situation improves, your monthly payment minimum increases in turn (and vice versa ). Remember that income-based repayment plans often have longer terms, which could mean you end up paying more interest over the life of your loans.
Exploring Your Employee Benefits
Your job might be able to help you with your student loan debt. Some employers offer matching contributions on your student loans up to a certain amount, similar to a 401(k).
Negotiating a Raise
Between your minimum payments, monthly expenses, and other financial obligations, your budget may be stretched as thin as it can go. If your employee review is coming up, this might be an opportunity to talk to your supervisor about a raise.
While there are many strategies, and you’ll know your boss/employer best, examples of things to mention during your review include your recent accomplishments, your dedication and loyalty to the company, and your willingness to go above and beyond.
If you’re coming up short on achievements, you might start keeping tabs on them and prepare to bring them to your boss in a few months. Your first job out of college probably won’t be your last, so a new job with a higher salary, especially if the one you’re currently in lacks growth opportunities, might be better for you.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.