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Student loan debt accounts for a large portion of Americans’ total debt burden — it’s second only to mortgage debt. According to data from the United States Chamber of Commerce, more than 44 million Americans have student loan debt, which owes a total of more than $1.5 trillion.
While it can be difficult to get out of student loan debt, you have options for paying off your student loans to get out of debt sooner.
With Credible, you can compare student loan refinance rates from various lenders in minutes.
While you can’t eliminate student loan debt quickly, you may be able to lower your payments or shorten the term of your loan so that you can pay off your student loans faster. These seven strategies can help you get student loan debt under control — which one is right for you depends on the type of loan you have, your income, and your financial goals.
If you have a federal student loan, you may qualify for student loan forgiveness, where you no longer need to repay part or all of your loan. (Note that if you don’t qualify for a student loan forgiveness program, you are still responsible for loan repayment.) Here are some common types of federal student loan forgiveness programs.
Civil Service Loan Waiver (PSLF)
If you work full-time for a U.S. federal, state, local, or tribal government or nonprofit organization, you may qualify for the Civil Service Loan Cancellation Program (PSLF), which forgives the remaining balance of your loan. To be eligible, you must have made 120 eligible monthly payments while working for an eligible employer. Note that if you work part-time for more than one eligible employer and your weekly hours of work total 30 hours or more, you may be considered for the program.
Military student loan waiver
If you are currently or have served in the military, you may qualify for loan forgiveness under the PSLF. If you served in a location where there was hostile fire or imminent danger, you may be eligible for half your loan forgiveness if your service ended before August 14, 2008. If you served in on or after this date, you may be able to cancel your entire loan.
Teacher Loan Forgiveness Program
If you taught full-time for five consecutive years at a low-income school or educational services agency, you could get a $17,500 or $5,000 forgiveness on your federal student loan. To obtain a pardon, you must have at least a bachelor’s degree, be a state-certified teacher, and not have a waiver of your certification or license requirements.
To get a $17,500 rebate, you must be either a full-time high school math or science teacher or an elementary or high school special education teacher. All other qualified teachers could receive $5,000 in loan forgiveness.
2. Ask for an income-based repayment plan
If your student loan repayments represent a large percentage of your income, you may qualify for an income-contingent repayment (IDR) plan, which is a reduced payment designed to be affordable based on your income and family size. The Ministry of Education offers four types of IDR plans.
Income Based Reimbursement Plan (IBR)
The IBR plan consists of monthly payments that are usually equal to 10% or 15% of your discretionary income (but never more than what you would pay under a standard 10-year repayment plan). New borrowers (on or after July 1, 2014) pay 10%, and all other borrowers (before July 1, 2014) pay 15%.
Repayment programs span 20 years for undergraduate loans and 25 years for graduate or vocational loans.
Income Contingent Repayment (ICR) Plan
With a ICR Plan, you will pay the lesser of two options: either 20% of your Discretionary Income or your 12-year fixed payment which has been adjusted to your income. The plan lasts 25 years and is available to any borrower with an eligible federal student loan.
Pay As You Earn (PAYE) Reimbursement Plan
The PAYE plan typically consists of payments that are 10% of your discretionary income (but never more than what you would pay under a standard 10-year repayment plan). The repayment term is 20 years.
Revised Pay As You Earn (REPAYE) Repayment Plan
With the REPAYMENT Plan, you’ll typically pay 10% of your Discretionary Income. The repayment term is 20 years for undergraduate loans and 25 years for graduate or vocational loans. This plan is available to any borrower with an eligible federal student loan.
3. Look for federal loan forgiveness or discharge
If you have a federal student loan, you may qualify for a forgiveness or discharge, both of which are similar to loan forgiveness.
- Perkins Federal Loan Cancellation and Release — If you have a Perkins loan, a low-interest federal student loan for students with extreme financial need, you may be eligible for full or partial loan forgiveness if you teach at a school that serves students at low income, are a special education teacher, or if you teach math, science, foreign languages or bilingual education. Other skilled occupations include firefighters, law enforcement officers, librarians, nurses, public defenders, speech pathologists, and AmeriCorps VISTA or Peace Corps volunteers. Perkins loan releases, where you do not need to repay the loan, are available under certain conditions, such as bankruptcy, death, school closure, veteran’s disability, spouse of 9/11 victim and total and permanent disability.
- School outing closed — You may be eligible for a full loan discharge if your school closes while you are enrolled.
- Disability leave — You may be eligible for a full loan discharge if you are totally and permanently disabled.
- False certification waiver — You may be eligible for a discharge from your loan if your school has certified your eligibility criteria and you do not meet them, if the school has certified your eligibility but you had a status that legally disqualified you, or if the school has signed your name on the application or endorsed a check for you.
Some companies offer student loan repayment assistance as a benefit of work. The employer will usually pay some or all of your loan repayments to you or your lender.
This benefit has become increasingly popular since the enactment of the Consolidated Credits Act (CAA) in December 2020. It allows employers to offer student loan repayment as a tax-free benefit to employees and is expected to last. until December 31, 2025. Research which companies offer this or consider asking about it during your interview.
You can use Credible to compare student loan refinance rateswithout affecting your credit.
5. Consolidate your federal loans
If you have a federal student loan with multiple student loans, you can consolidate your federal student loans with a direct consolidation loan at no cost. Combining multiple loans into one direct consolidation loan will not necessarily give you a lower interest rate – your new rate will be a weighted average of all your existing loans. But you’ll have an easier time tracking your student loan debt, especially if your loans are with different loan servicers.
Note that if you made payments under an IDR plan, consolidating your loans into a direct consolidation loan resets your payment clock. You will generally lose credit for the months you have already paid on your loans. But because of the pandemic, you won’t lose credit for those payments for a limited time.
If you can get better terms on your loan by refinancing, you might want to consider this option. The common advantages of refinancing a loan are get a lower interest rate or a longer repayment period that lower the monthly paymentfreeing up money for daily expenses.
You can refinance federal student loans, private student loans or a combination of both with a private lender. But if you refinance a federal loan into a private loan, keep in mind that you will lose the benefits and protections that come with federal loans, such as PSLF and income-based repayment plans.
Credible, it’s easy to compare student loan refinance rates.
7. Take a scramble
Another option for pay off your student loan sooner is to double your payments. Consider taking up a side hustle to earn extra income, like delivering groceries or food, tutoring online, or caring for a home or pet.