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How Long Do You Have to Pay Off Student Loans?

May 29, 2019 · 6 minute read

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How Long Do You Have to Pay Off Student Loans?

Sorry, Ben Franklin (or Daniel Defoe or Christopher Bullock)—death and taxes have a new rival. For millions of Americans, repaying student loans has become one of the certainties of life.

Once you graduate, you’ll likely be initiated into a club made up of more than 44 million U.S. borrowers in 2018, who pay an average of $37,000 on their individual student loans.

If you are one of these 44 million borrowers, you might be asking, “How long do I have to pay off student loans?” The answer: it depends. The great news is that you have many student loan repayment options to help make student loans more affordable.

First, we’ll go over how the Standard Repayment Plan functions, what grace periods are, and the options you have if you convert your federal loans into a Direct Consolidation Loan. (When you consolidate your federal loans, it opens up a number of repayment options, including graduated repayment plans and income-driven repayment plans.)

But of course, these aren’t the only options. That’s why we want to break you options down, to determine how long your loan repayment might take you, depending on the plan. This breakdown exists purely to help simplify things and illustrate your options. It’s definitely not advice, nor is it an exhaustive look at every repayment option that may be available. Let’s start with the basic plan that all federal student loan borrowers have.

Standard Repayment—10 Years

How long do you have to pay off student loans under the Standard Repayment Plan ? If you don’t consolidate your federal student loans, the typical term will last 10 years. You’ll pay a set amount every month and may pay less overall for the student loan because of the relatively short loan term. (Many income-driven repayment plans, for comparison, can have terms of up to 25 years!)

For most federal student loans, the standard repayment option includes a six-month grace period that allows recent graduates to get a head start on finding a job. The clock starts ticking the moment you graduate or leave school, or if you fall below half-time student enrollment. The loans that offer this grace period include:

•  Direct Subsidized Loans

•  Direct Unsubsidized Loans

•  Subsidized Federal Stafford Loans

•  Unsubsidized Federal Stafford Loans

While having extra time before making your first payment sounds nice, be aware that interest continues to accrue during those months and will be added back into the loan, increasing the principal.

Standard Repayment Plans might not be a good choice for you if you’re trying to qualify for Public Service Loan Forgiveness (PSLF), which supports public servants who meet all the eligible criteria and are approved. These borrowers agree to work in underserved areas for a government entity or certain nonprofits and must meet rigorous requirements to have their loan forgiven after about 10 years. You’ll have to pick another repayment option other than the Standard Repayment Plan to qualify for PSLF .

Combining your federal student loans on the Standard Repayment Plan into a Direct Consolidation Loan could open up several repayment options. Consolidation combines your federal loans into one loan with a single rate, which could simplify the repayment process. While it can significantly increase the term of repayment and how much you ultimately pay for your loan, it usually qualifies you to investigate other repayment options, including graduated repayment plans and income-driven plans. (More on those in a moment.)

Private student loans can’t be rolled up into a Direct Consolidation Loan, but you have the option of refinancing those with private lenders, where you may be able to qualify for a lower interest rate or to extend the term to make monthly payments more manageable.

Not sure if the Standard Repayment Plan is right for you? Check out our student loan repayment calculator. It can help you get an estimate of your student loan payments on the Standard Repayment Plan. Hopefully, that can help you determine if those monthly payments match your goals or if you want to switch to a different repayment plan.

Graduated and Extended Plans

Graduated Repayment Plans—10 Years Standard; Up to 30 Years Consolidated

Generally, all federal loan borrowers can opt for the Graduated Repayment Plan . This plan could be a good option for borrowers who expect their income to rise over time. This plan starts off with low monthly payments that gradually increase at two-year intervals. The idea is that recent graduates’ salaries at entry-level positions may start off low, but will rise over 10 years via promotions or new jobs.

Thus, the Graduated Repayment Plan allows minimum payments to grow with your salary. The downsides are that you could be paying more over the life of the loan, and if your salary doesn’t increase as anticipated, the later payments can become burdensome. The good news—you can switch to an income-driven plan or the Extended Repayment Plan (below) which may make loan payments more affordable.

So how long do you have to pay back your student loan under the Graduated Repayment Plan? Borrowers have between 10 and 30 years to pay off the loan.

Extended Repayment Plans—Up to 25 Years

Like the graduated repayment plan, this option allows qualified applicants to extend the term of the loan, which has the potential to make monthly payments substantially smaller. Borrowers may end up paying more in interest the longer the loan term, but there are options for a fixed monthly payment or a graduated payment that will rise throughout the term.

These plans could best suit borrowers who owe sizable sums. They are limited to those with $30,000 or more in federal student loan debt.

Neither of these two plans qualifies for PSLF.

Income-Driven Repayment Plans

Income-driven plans are designed to make repayment easier if you can prove that paying back your student loans is a significant financial burden. This is based on your discretionary income and family size. However, the longer terms mean you could easily pay more in interest over the life of the loan.

How long do you have to pay back student loans under these plans? Each of the following four plans has a different payback period. Under all four plans, remaining balances on eligible student loans are forgiven after making a certain number of qualifying on-time payments.

Beware: you could have a tax liability for the amount of debt that was cancelled. Here’s a high-level overview of the four income-driven repayment plans:

(If you’re interested in applying for the Public Service Loan Forgiveness program, the following four plans may qualify.)

Revised Pay As You Earn (REPAYE)—20 or 25 Years

Under this plan, your monthly payment is generally equal to 10% of your discretionary income. If you incurred the debt as an undergraduate, you’ll have 20 years to pay off the loan. If you took out a federal loan for graduate or professional school, you’ll have 25 years to pay it back.

Pays As You Earn (PAYE)—20 Years

Your monthly payment is roughly 10% of your discretionary income and you’ll make 20 years of payments.

Income-Based Repayment Plan—20 or 25 Years

Again, your monthly payment will be about 10% of your discretionary income. You’ll have 20 years to pay back the loan if you’re a new borrower on or after July 1, 2014. If you borrowed before that date, you will have 25 years to finish making payments.

Income-Contingent Repayment Plan—25 Years

This plan pegs your payments to your income and family size. The monthly payment is adjusted annually, based on changes in both factors.

An Option for Private Loans

So, you see, you have many options for making federal student loans easier to repay. How long do you have to pay off student loans? It depends.

But what if you don’t qualify for the repayment plan you want? Or you simply don’t like any of the graduated or income-driven repayment options? You may also be carrying a sizable private student loan debt, which cannot be consolidated under a Direct Consolidation Loan like federal student loans.

In any of these cases, there might still be a good option out there for you.

You can refinance both private and federal student loans with a private lender. The benefits of going this route could include the potential of a lower interest rate or a lower monthly payment.

Additionally, you can typically pick the term of the new loan, which helps determine the monthly payment amount. Finally, you may have the option of choosing a fixed-rate loan, which remains steady throughout the life of the loan, or a variable-rate loan, which fluctuates with the market.

A major downside of refinancing federal student loans with a private lender is that you’d lose access to federal benefits like income-adjusted repayment plans and loan forgiveness. But if you’re more concerned about making the monthly payment or loan term fit your lifestyle, SoFi student loan refinancing might be right for you.

If you’re ready to consider refinancing, check out the benefits of being a part of the SoFi community.

External Websites: 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.
SoFi Student Loan Refinance
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.


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