How to Pay Off Student Loans Fast

November 22, 2022

It can feel impossible to pay off student loans, but there are plenty of tips and tricks that will show you how to pay off student loans fast.

Education can be very expensive causing many students to need student loans in order to pay for tuition, books, school supplies, and even housing while they're in school. Thankfully, there are many resources out there that can make it easier to figure out how to pay off student loans faster so you don't remain in student loan debt for the rest of your life. 

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How Should I Pay Off My Student Loans?

Did you know that there are actually many different ways to pay off student loans that can help you pay off your loans quickly and efficiently? Student loan repayment plans can help you divide and conquer your debts with a payment plan that fits you and your circumstances best.

Below are the 8 different kinds of student loan repayment plans you have to choose from: 

8 different kinds of student loan repayment plans

1. Standard Repayment Plan

The standard repayment plan is available to everyone with student loan debt. It is the basic or first choice of repayment plans you have to choose from. Many people are put on the standard repayment plan by default. 

This student loan payment plan has a fixed monthly payment amount. It is also designed to have you finish paying off your student loans in 10 years. 

The pros of the standard repayment plan are that the monthly payment stays the same, so you don't have to worry about your payment amounts fluctuating at all.

But in order for this plan to finish paying off your student debt in just 10 years, these monthly payment amounts are usually higher.

Paying more each month for only 10 years can help you pay a lot less in student loan interest overall, but it can take more out of your monthly budget in the meantime. 

Repayment plan in a notebook

2. Graduated Repayment Plan

The graduated repayment plan is also available to everyone with student loan debt. This student loan payment plan does not have a fixed monthly payment amount, but it is also designed to finish paying off your loans in 10 years. 

The graduated repayment plan does not refer to a student's graduation, rather, it refers to the gradual increase in monthly payment amounts throughout the life of the loan. 

This plan can be great if you don't mind your monthly payments getting bigger over the years, if you'd like to finish your loans in 10 years, and if you'd like to at least start out with smaller monthly payments. 

graduation cap

3. Extended Repayment Plan

The extended repayment plan is not available to everyone with student loan debt. Instead, it is only available to Direct Loan borrowers who have more than $30,000 in debt. 

This plan can have fixed or graduated monthly payment amounts and is designed to have your loans repaid in 25 years. So if you have a Direct Loan and more than $30,000 still in debt, and you want a repayment plan that takes a little longer in order to get smaller monthly payments, then this plan might be right for you. 

coins stacking up and going into a coin jar

4. Revised Pay As You Earn Repayment Plan (REPAYE)

The revised pay as you earn repayment plan (REPAYE) is only available to Direct Loan borrowers with qualifying loan types. So this plan may not work for everyone. 

This plan is designed to make your monthly payment amounts 10% of your discretionary income. Discretionary income, or disposable income, refers to your extra money after income taxes. These payment amounts are recalculated every year to match your current yearly income. 

This payment plan isn't available for everyone, and bases payments on income so there is a potential for getting higher minimum monthly payments, but with this plan you can potentially have the rest of your student loan debt forgiven if there is any extra debt after 20 to 25 years. 

5. Pay As You Earn Repayment Plan (PAYE)

The pay as you earn repayment plan (PAYE) is only available to new student loan borrowers who took out loans on or after October 1, 2007, and received a Direct Loan disbursement on or after October 1, 2011. 

This plan is also designed to make your monthly payment amounts 10% of your discretionary income. This amount is also recalculated every year, just like for the REPAYE plan. 

6. Income-Based Repayment Plan (IBR)

The income-based repayment plan (IBR) is only available to student loan borrowers whose debt is very high in comparison to their income. 

This plan is designed to make monthly payments 10% to 15% of your discretionary income. This amount is also recalculated every year, just like for the REPAYE and PAYE plans. 

Like the REPAYE plan, the IBR plan also allows for student loan forgiveness for any remaining debt after 20 to 25 years. 

Debt to income ratio, debt is higher

7. Income-Contingent Repayment Plan (ICR)

The income-contingent repayment plan (ICR) is only available to student loan borrowers with a qualifying type of Direct Loan. 

This plan is designed to make monthly payments either 20% of your discretionary income or the fixed payment amount you would have on a 12-year plan that has been adjusted to your income. The ICR plan picks whichever of these payment amounts would be smaller.

This amount is also recalculated every year, just like for the REPAYE, PAYE, and IBR plans. 

Like the REPAYE and IBR plans, the ICR plan also allows for student loan forgiveness for any remaining debt after 25 years. 

8. Income-Sensitive Repayment Plan

The income-sensitive repayment plan is only available for student loan borrowers with a Federal Family Education Loan Program (FFEL) loan that is not eligible for Public Service Loan Forgiveness Program (PSLF). 

The FFEL Program ended in 2010, but was a program designed to work with private lenders to provide student loans. Loans that were provided under the FFEL Program are now under the William D. Ford Federal Direct Loan Program. 

This plan is designed to base monthly payment amounts on yearly income and repay the full loan in 15 years. 

Best Way to Pay Off Student Loans

Whatever student loan repayment plan you choose, make sure you consider your annual income and monthly budget and how your repayment plan will fit into those two things. Regardless of how you go about making payments, the best way to pay off student loans is to avoid accumulating student loan interest as much as possible.

Most loans come with an interest rate. This percentage is how much your loan grows, accumulating in additional interest, or extra money and extra payments you'll need to make to pay off your student loan debt entirely.

Student loan interest can make the money you owe bigger and take longer to repay.

Avoid student loan interest as much as possible by making minimum payments as soon as possible and making bigger monthly payments whenever you can. 

Can I Refinance My Student Loans?

Yes! You can refinance your student loans. You can apply to change your student loan repayment plan to a different plan or you can refinance your student loan with a private lender. You can't refinance student loans through the government, but you can if you consolidate your loans to a private lender. 

When you go to refinance your student loans, a private lender will pay off your loans so you can start a repayment plan with a loan through the private lender instead of a federal student loan program. 

The Pros and Cons of Refinancing Student Loans

Refinancing with a private lender can come with some great benefits, but also some unique costs. The first con is that you give up any benefits from having a federal student loan and remaining within that government program.

However, using a private lender instead could provide you with the loan payment plan you want. 

Money with a graduation cap on top

How Long Does It Take to Pay Off Student Loans?

According to a report done by the Education Data Initiative, on average it can take student loan borrowers up to 20 years to pay off their student loans. For some professional graduates in the report, it can take up to 45 years to repay their student loans. 

Needless to say, without a robust repayment plan, it can take a very long time to finish paying off your student loans. That's why using one of these tips for how to pay off student loans fast with the right repayment plan are so important. 

What is the Average Student Loan Debt?

According to a report done by the Education Data Initiative, on average someone with student loans has about $37,693 in student loan debt. That's a lot!

The averages between federal student loan debt and private student loan debt are also different. Average federal student loan debt is about $36,510 while the average private student loan debt is much higher at $54,921. 

In Conclusion,

If you have student loan debt, don’t be discouraged. You are not alone! Many students need to take out loans in order to pay for education today. Thankfully, there are also lots of resources and repayment plans available to students to help you pay off student loans in full in as little as 10 years.