How to Pay Off $200K in Student Loans

According to a 2024 report from the Education Data Initiative, the average student loan debt per borrower is around $39,981 in total. Outstanding debt varies based on the type of degree you pursue. For example, the average debt for medical students exceeds $200,000, and law students carry around $180,000 in debt.

If you’re pursuing a professional degree and are worried about a heavy student loan burden, here are strategies that may help you pay off $200K in student loans.  

How to pay off $200K in student loans in 7 steps 

Making a plan can help repaying $200K in student loans feel more manageable. Remember that you have control over your financial situation. By following these steps, you can develop a strategy to tackle your debt and work toward financial freedom. With determination and a clear plan, you can achieve your goals.

Step 1: Choose a repayment plan

Your federal student loans start out with the standard repayment plan, which generally has fixed payments and a 10-year term. But you also have other options for federal student loan repayment, including:

Plan	Term	Monthly payment structure
Graduated	10 years	Lower payments to start and increases every two years
Extended	25 years	Payments can be graduated or fixed
Saving on a Valuable Education (SAVE)	20 years for undergrad loans25 for grad and professional loans	10% of discretionary income, any remaining balance at end of term is forgiven
Pay As You Earn (PAYE)	20 years	10% of discretionary income, any remaining balance at end of term is forgiven
Income-Based Repayment (IBR)	20 years	10% of discretionary income, any remaining balance at end of term is forgiven
Income-Contingent Repayment (ICR)	25 years	20% of discretionary income, any remaining balance at end of term is forgiven

The federal student loan repayment simulator can help you choose a plan that works well for your situation. 

Step 2: Apply for repayment assistance

If you work for a nonprofit organization or the government, you might be eligible for Public Service Loan Forgiveness (PSLF). With this federal student loan program, your loans can be forgiven after you make 120 qualifying monthly payments while working for an eligible employer. 

Those who don’t qualify for PSLF might have profession-based options for repayment assistance. For instance, medical school students could qualify for assistance through the U.S. Department of Veterans Affairs’ Specialty Education Loan Repayment Program (SELRP). 

Step 3: Make a budget

Once you’ve researched repayment options and assistance, it’s time to make a budget. Your budget will help you allocate your earnings into different buckets, including your monthly student loan payment. Several budgeting options and apps exist; the best option for you is the one you can commit to over the long term. 

Here are four popular budgeting apps to consider and their monthly costs.

App	Cost
You Need a Budget (YNAB)	$14.99/month or $99/year
Goodbudget	Basic version is free, Premium version is $10/month or $80/year
EveryDollar	Basic version is free. Premium version is $17.99/month or $80/year.
PocketGuard	Basic version is free. Premium version is $12.99/month or $74.99/year.

Step 4: Prioritize debt repayment

Your next step is prioritizing your debt repayment. If you have higher-rate private student loans and can afford to do so, consider paying extra toward them each month to help reduce the impact of added interest. Adding $50 or $100 extra toward your monthly principal could help you chip away at your balance. 

Also, consider putting any extra cash, such as tax refunds, birthday money, bonuses, or raises, toward your student loans to help accelerate your repayment timeline. 

Step 5: Consider making biweekly payments

Making biweekly student loan payments is another option for paying down your balances faster. These extra payments can help reduce your interest costs over the life of your loan, but only consider this if it doesn’t overextend your budget. 

It’s a solid option if you’re already putting extra toward your monthly payments because it will help you achieve repayment faster and save over the long haul.

Step 6: Determine whether refinancing or consolidation makes sense

Refinancing or consolidating your student loans might help you get a lower rate and simplify your monthly payments. Both involve replacing your current loans with a new one. 

Borrowers often choose to refinance when they want to reduce their interest rate or extend their repayment terms to lower their monthly payments. By contrast, borrowers might choose to consolidate several loans into one to make their monthly payments easier to track and manage. 

We’d only recommend refinancing or consolidating if it reduces your interest rate or helps you keep up with your payments. Opting for a longer repayment term could increase your interest costs over time, so it’s not the best choice unless you’re struggling to afford your payments. 

Our expert’s take on refinancing with a high loan balance

Erin Kinkade

CFP®

The benefits of refinancing are, ideally, to obtain better terms to fit your financial condition, such as a lower interest rate or a longer repayment term (lower monthly payment, but this could also mean more interest paid over the new term). Both of these features could free up cash flow to use for expense needs, add to savings, and invest in your future. The drawbacks include potentially paying more interest over the term—but the pros could outweigh this. An additional drawback could be carrying debt longer, increasing your debt-to-income ratio, which could preclude you from being approved for a home mortgage or other financing needs.

Step 7: Work to increase your income but keep expenses manageable

Increasing your income over time will also help you make a dent in your student loans. Request annual raises, and apply for higher-paying roles in your chosen profession to help boost your earnings. If your schedule allows, consider picking up a side gig too. 

Just ensure you aren’t also increasing your expenses when you get raises or bonuses. It can be easy to spend more once you’re making more. Instead, consider putting the extra money toward the principal on your loans to accelerate repayment. If you do this automatically, it can remove the temptation to spend any extra earnings elsewhere.

Tax deductions may be available for the interest you pay on your student loans, depending on your Modified Adjusted Gross Income (MAGI).

Erin Kinkade

CFP®

How long does it take to pay off $200,000 in student loans? 

Paying off $200,000 in student loans could take as little as 10 years if you have federal student loans with a standard repayment plan. But your payments may not be affordable over a 10-year term. This is an important consideration. 

Here are hypothetical scenarios to illustrate your estimated monthly federal student loan payments under different repayment plans. We’ve also calculated your estimated interest over your loan’s term. For the purposes of our example, we’ll assume your outstanding loan balance is $200,000 and your average interest rate is 6.78%. 

Plan	Estimated monthly payment	Total interest paid
Standard (10 yrs)	$2,300	$75,947
Extended (25 yes)	$1,386	$215,684

Your monthly payments could be much lower depending on your income.

These are just estimates, but they give insight into how much you might pay every month and your interest costs over your loan’s term. You’ll pay far less in interest with a shorter term than if you opted for an extended repayment term. 

A longer repayment term will lower your monthly payments. Use the federal student loan simulator to help you determine which repayment option best suits your situation.