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How to Pay Off Student Loans? Repayment Strategies, Forgiveness Programs, and Many More.

how to pay off student loans

Getting student loans can be necessary for your dream education. However, this dream can turn into a nightmare if you cannot repay your debt on time. To avoid any debt-related challenges, you need to know how to pay off student loans even before you get a loan. Exploring your options and developing a sound repayment strategy will ease your main payback period once you graduate.

Borrowers can pay off student loans in several ways:

  1. You can repay the debt from your pocket through affordable repayment plans.
  2. You can find a forgiveness/discharge program to get rid of the student loan fully or partially. Besides, refinancing your loan can help you make student loans more manageable.
  3. Minor changes to your repayment, such as enrolling in the Auto-pay function or snowballing your debt, can be useful to ease your debt burden. 

Repayment Plans for Federal Programs

It is not always easy to get rid of the debt; sometimes, the best option for your student loans is paying off the debt. If you have federal student loans, you are lucky in repayment. The government cares about your repayment ability. Hence, it is possible to access different repayment plans and choose the most suitable one for your budget. There exist various categories of repayment plans:

  • Standard;
  • Graduated;
  • Extended;
  • And Income-Driven plans.

In subsequent sections, we will introduce you to each plan. However, it is advisable to talk to your loan servicer or a third-party debt specialist to determine which method will help you repay the debt fast and effortlessly. 

Standard Repayment Plan

Each repayment plan differs in terms of who is eligible, how long is the payback period and how high is the repayment rate. The standard plan is almost available to all federal student loan borrowers, including borrowers of Direct, FFEL, and PLUS loans

This program requires debtors to pay a fixed amount each month to pay off in 10 years. If you consolidate the loans, this period can extend up to 30 years. As the payback period is generally shorter, you will have a relatively high monthly loan payment rate.

Graduated Plan

how to pay off student loans

Another option to pay off student loans is enrolling in a Graduated repayment plan. Similar to the Standard plan, this program is highly accessible to borrowers. Besides, the payback period is also ten years but can be up to 30 years for consolidated loans. The difference is that you start repaying in small amounts with a Graduated plan, and over time, the rate increases. 

The loan repayment rate rises every two years. Therefore, if you believe that you will have a decent job and more income in the future, you can enroll in this program.

Extended Plan

An extended repayment plan has similar elements to the Graduated and Standard plan. However, you have high flexibility in this repayment option. Borrowers can choose whether they want to pay a fixed amount or graduate (increasing periodically) to pay off student loans. It requires 25 years of repayment to finally get rid of your debt. 

The repayment plan is available to borrowers with different loans, including Direct, PLUS, or FFEL. However, if you have a Direct loan, your balance should be more than $30,000 to qualify for this program.

Income-Driven Repayment

If you wonder how to pay off student loans with little income, here is your answer- Enrolling in Income-Driven Repayment plans. As the name suggests, the base of calculations for this repayment plan is your income (and family size). Therefore, if you earn less per month, you will repay in the smallest possible amounts. 

Income-Driven repayment plans are designed to help borrowers with financial struggles. Its repayment amount per month is the percentage of discretionary income. In this way, the repayment amount is never more than what you can afford. Besides, once the payback period is completed, you get forgiveness for the remaining balance. 

Additionally, keep in mind that if you want to apply for the Public Service Loan Forgiveness program (which we will discuss in the following sections), you can only repay your debt with Income-Driven plans.

Subcategories of Income-Driven Plans

An income-Driven repayment plan has its own subcategories. Here we list their repayment rates and the length of the payback period. However, it is advisable to read about each repayment option in detail if you do not know how to pay off student loans with Income-Driven plans.

  1. Revised Pay as You Earn- this plan requires 10% of your discretionary income, and the payback period is either 20 years (for undergraduate studies) or 25 years (for graduate and professional studies).
  2. Pay as You Earn- the monthly repayment rate is again 10% of discretionary income, and the payback period is 20 years—the timing of your loan matters.
  3. Income-Based Student Loan repayment – this plan can require 10% or 15% of your income, and its payback period is either 20 or 25 years. The rate and period differ depending on when you received your first loan.
  4. Finally, the Income-Contingent plan takes 25 years to forgive your debt and requires either 20% of your discretionary income or a fixed amount to pay off the balance in 12 years.

Before you choose any repayment option to pay off your student loans, analyze each of them or get professional help. Remember that the payback usually takes 20-25 years, and you would not want to have a bad start to such an extended repayment period. 

Repayment Plans for Private Loans

Private debtors thinking about how to pay off student loans can also check their available repayment options. There is no fixed strategy available to all private borrowers. Each lender has its own offerings regarding repayment methods. 

Most private student loan repayment options start after the borrower graduates from the school. So, at least, you might not be required to make full payments while studying. However, if you can make some payments in total amounts, your debt burden after graduation will be significantly lower. 

Interest-Only Payment

Typically, lenders offer two to four types of repayment options. For example, if you are lucky, you can access an interest-only payment option. If you enroll in this program, you will pay only interest while studying, but your full payments will start after graduation. On the one hand, this repayment is manageable while studying. On the other hand, your original debt balance will not decrease till graduation.

Interest Plus Principal Repayment

Some lenders require you to make full payments as soon as you get the loan. The repayment will minimize your interest if you can afford both interest and some part of the principal balance. Besides, you will quickly pay off your student loans. However, this option is not desirable for many students who do not have a good income source while studying.

Fixed Repayment

This method is also similar to Interest-only payment, but it is in fixed amounts. You might be asked to pay only -say $20- which is even lower than your interest rate. If you wonder how to pay off student loans effortlessly, you can choose this option while in school, but your balance will overgrow till you graduate.

Forgiveness Programs

Till now, we discussed how you could pay off your student loans with existing repayment options. The general idea behind this strategy is to choose the most suitable plan for you and repay your debt – mostly slowly but effortlessly. 

However, you might also want to eliminate some or full debt quickly, even without paying it from your pocket. In such cases, forgiveness or discharge programs come to the rescue. It is not always easy to get qualified for a forgiveness program; however, you eliminate a considerable amount in no time when you do.

Federal Forgiveness Programs

Federal Forgiveness Programs

Federal borrowers wondering how to pay off student loans can easily find several possible forgiveness programs. Some of these programs are granted in exchange for a service commitment. Others might require pre-existing conditions, such as bankruptcy, death, or disability. 

There exist several forgiveness programs that can erase 100% of the debt. In the following section, we give a brief overview of existing programs. However, make sure you read Student Loans Resolved blogs or get our debt specialist’s help to find out which program you can qualify for.

Public Service Loan Forgiveness

How to pay off your student loans if you work in public service? Borrowers in a federal, local, state, tribal, or non-profit organization can qualify for Public Service Loan Forgiveness. This program eliminates the remaining balance once you make 120 payments (at least ten years). All your payments should be in full amount and made under Income-Driven Repayment plans. Keep in mind that the forgiveness amount is non-taxable. Therefore, you do not need to worry about additional taxes on forgiveness. 

Borrowers’ Defense to Repayment

Do you think your school misled you? Some schools lie about their education quality or the employment rates after graduation. If your school is one of them, you can open a case through Borrowers’ Defense to Repayment. Once you prove the misconduct of the school officials, you can get rid of the student loan fully or partially. However, the Biden Administration is favorable to this program, and you have a high chance to get 100% discharge through this program.

Teacher Loan Forgiveness

Sure, there should have been an excellent opportunity for teachers with the noblest positions in the world. Highly qualified teachers with valid licenses and at least bachelor’s education can receive up to $17,500 Teacher Loan Forgiveness if they serve five consecutive years. Both Direct and FFEL loan borrowers can qualify for this program.

Perkins Loan Discharge/Cancellation

If you have Perkins loans, there is a forgiveness program designed for your loans specifically. Perkins Loan Discharge program grants 100% forgiveness in installments throughout five years of service. Teachers, firefighters, librarians, military personnel, etc., can qualify for this program.

Closed School Discharge

If your school closed while you enrolled or shortly after withdrawal, you could reject making any payments for student loans. In other words, you do not even need to think about how to pay off student loans for a closed school. 

Closed School Discharge can grant 100% debt cancellation if you do not transfer your credits to a comparable program. Usually, discharge happens automatically three years after the closure. However, you can save time by contacting your loan servicer and requesting a discharge.

Total and Permanent Disability Discharge

Some borrowers cannot work due to their disability and earn to pay off student loans. For such cases, total and permanent disability discharge exists. It can grant up to 100% debt cancellation if the borrower proves disability through Social Security Administration, Veteran Affairs documentation, or physician certification. To pay off student loans through this program, you have to contact the loan servicer – Nelnet.

Private Loan Forgiveness

Unfortunately, many forgiveness programs are only available to federal loan borrowers. There exist almost no forgiveness programs to pay off private student loans. Only a few lenders allow forgiveness through disability or death discharge. Hence, if you have private student loans, look for better repayment terms or refinancing rather than debt forgiveness for student loans.

Student Loan Refinancing: How to Pay Off Student Loans

how to pay off student loans

If you are not satisfied with available repayment options or forgiveness programs, you can refinance your loans. Student loan refinancing is available both to federal and private loan borrowers. Refinancing means getting a new loan with better terms and getting rid of the existing loan. Hence, it helps you pay off student loans more effectively. 

For example, imagine you have a private loan with a high-interest rate and an annoying lender who pressures you for repayment every day. You can start looking for a refinancing loan that offers a lower interest rate for the amount you need to pay off the existing loan. In this case, you can get a new, cheaper loan and use funds to get rid of your problematic loan. As a result, you will also change the annoying lender. 

However, keep in mind that you have to find a loan with better terms- lower interest or a shorter repayment period for refinancing to work. Otherwise, you can only change the loan servicer and continue struggling with the repayment. 

Additionally, think twice before refinancing federal loans. If you refinance, you will lose eligibility to all federal benefits- forgiveness programsconsolidation, deferment, or forbearance. 

What are the Eligibility Criteria for Refinancing?

Different from federal student loans, refinancing is done by private lenders. Hence, they can check your credit history extensively. They usually require a 650 or higher credit score. Besides, a stable income source is necessary. 

If you are still a student, you might lack a regular income source. In this case, a co-signer will be mandatory. A co-signer is a friend or family member who agrees to pay your debt if you do not. 


If you have a private loan and look for better ways to pay off student loans, you can enroll in the Auto-pay feature. The auto-pay feature requires borrowers to link a bank account to repayment. In this way, each month, the necessary loan repayment amount is automatically deducted from your account. 

There exist two benefits associated with this feature. First, you will not forget your repayment, which can cause penalties. Second, lenders usually stimulate borrowers for auto-pay by granting some discounts. For example, you can get a 0.25% interest reduction for your Navient student loans with an auto-pay feature.

Snowballing Debt Payments

Snowballing debt payments is a repayment strategy to pay off your student loans effectively. If you have multiple debt sources, it can be hard to manage all repayments. Hence, snowballing methods can be helpful. With this strategy, you list your loans from small to large amounts. Then you work to repay the smallest amount fully and then move to a more considerable amount.

However, while focusing on a particular loan with a small amount, you have to keep minimum payments for other debt sources. Once you pay off one loan, you can use the repayment amount for that loan for bigger loans. Your debt repayment can be eased with this method, but it is not as effective as finding an affordable repayment method of a forgiveness program.

Final Words on How to Pay off Student Loans

This guide helps borrowers who face financial hardship or just want to explore possible repayment options:

  1. We analyzed repayment methods that can help you pay off the debt quickly or effortlessly with your money.
  2. How to pay off student loans without a penny? We introduced forgiveness programs that erase your debt. You can get rid of a massive portion of your debt balance without repaying it. We also discussed refinancing, which helps to change pressuring loan servicers and save money.
  3. Minor changes to repayment strategies, such as adopting snowballing method or enrolling in the auto-pay function, are elaborated.

If you are still unsure which option is most useful, you can contact our debt specialists. 

Third-party debt experts, like those in Student Loans Resolved, have years of experience helping borrowers just like you. We provide a free consultation to discuss your finances and develop a preliminary repayment strategy so that you can learn more about how to pay off student loans. So contact us now to wake up on a debt-free morning quickly.