Not long ago, it was uncommon for a student to graduate with more than $100,000 in student loans. Unfortunately, things have changed. While the average student borrower will have just over $28,000 in debt when they leave school, 2.9 million borrows have more than $100K in student loans.
If you have more than $100K in student debt, you might feel overwhelmed and think repaying that debt is impossible. But it’s not. Paying off $100K in student loans requires making and sticking to a repayment plan—especially if you want to pay back your student loans as fast as possible.
So, what should your student loan repayment plan look like? It’ll depend on things like the type of job you have, how much you make, your cost of living, and your life goals. This guide will help.
In this guide:
- Step 1: Choose a repayment plan
- Step 2: Make a budget with a bias toward paying down debt
- Step 3: Prioritize your debt repayment
- Step 4: Consider making multiple payments each month
- Step 5: Consider student loan refinancing
- Step 6: Work on increasing your income, but not your expenses
Step 1: Choose a repayment plan
Choosing the right repayment plan is key to help you pay off $100K in student loans as painlessly as possible.
However, that will only help you with your federal loans, because private student loans don’t tend to have flexible repayment plan options (unless you refinance, which we’ll talk about later).
If you have federal student loans, these are your repayment options.
The standard repayment plan
If you can afford it, the standard repayment plan will have you debt-free in the fastest amount of time—10 years. The quicker you repay your loans, the less interest you’ll pay over the life of your loans, as well.
But standard repayment may come with high monthly payments, which could be a problem if you are still earning just a starting salary in your profession.
The table below will give you a rough estimate of what your monthly payments could look like under the standard repayment plan. However, your own rates and loan amounts will vary, so use our student loan payment calculator to get a more accurate estimate.
| Debt amount | Interest rate for Direct Unsubsidized Undergraduate Loans (2019–2020 rates) | Monthly payment under the 10-year standard repayment plan |
| $80,000 | 4.53% | $830 |
| $100,000 | 4.53% | $1,038 |
| $120,000 | 4.53% | $1,245 |
Income-Driven Repayment plans
If you don’t think you can afford the standard repayment plan—or if you work in a public service job and you think you could qualify for the Public Service Loan Forgiveness Program (PSLF)—consider enrolling in an income-driven plan.
These include:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
These plans allow you to pay a portion of your discretionary income (10% to 20%) toward your $100K in student loans every month. After 20 to 25 years of on-time payments (just 10 if you qualify for PSLF), you can have your remaining student loan balance forgiven.
While these plans will reduce your monthly payments, you will end up paying more in interest over the life of your loans.
Direct Consolidation Loan
If you have Parent PLUS loans or Graduate PLUS loans, you may need to consolidate your debt through a federal Direct Consolidation Loan before you can enroll in an income-driven plan. You may also need to consolidate your loans to access student loan forgiveness programs.
You may want to consolidate your loans just to simplify your repayment by putting all your federal loans together, or to lower your monthly payment by extending the term of your loan.
Just be sure you don’t consolidate your subsidized loans with unsubsidized loans, as you’ll lose the option to have your interest covered if you ever defer your loans.
Step 2: Make a budget with a bias toward paying down debt
Even though this is the second step on the list, you might need to do it in tandem with Step 1. Knowing how much you can afford to pay monthly toward your student loans could help you pick the right repayment plan.
To figure this out, tally your income, subtract your monthly living expenses, and determine how much of whatever is left you can put toward your $100K in student debt.
If it’s only the minimum required by your repayment plan, that’s OK—especially if you hope to only pay your loans long enough to have them forgiven. But if you can afford to pay more than required—especially on private student loans—that’s even better.
Take this opportunity to look for places to save. Cutting down on expenses and putting the extra money toward your debt will save you money in the long run and have you debt-free faster. Pare down your budget as much as you can by finding cheaper ways to have fun or get what you need.
If you’ve reduced your budget all you can and you’re still struggling just to make the minimum payments on your loans, consider these options.
Step 3: Prioritize your debt repayment
Once you’re enrolled in repayment programs and know how much money you can dedicate to your student loan debt every month, prioritize your payments by using what’s called the debt avalanche method.
This is when you direct any additional money you have available for debt repayment toward the debt with the highest interest rate. This is the fastest way to pay off debt and the way to save the most in interest over the life of your loans.
The simplest way to do this is to set up autopay for the minimum payment on all your loans. Doing this could also save you money because many loan servicers offer an interest rate discount when you enroll in autopay.
Then take any additional money and manually pay it toward the loan with the highest interest rate. Once that loan is repaid, focus on the loan with the next highest interest rate, and continue until you are completely debt free.
Step 4: Consider making multiple payments each month
Want to pay off your debt faster? Consider making multiple payments every month to coincide with your paychecks. This will ensure you don’t have a chance to spend that cash on anything else, and it may allow you to wipe out newly accrued interest mid-month before it has a chance to capitalize.
And if you’re paid every other week instead of bi-monthly, meaning you get 26 paychecks in a year instead of 24, you’ll end up making a full-month of extra payments by the end of the year without realizing it.
To make this easier, set up autopay for the minimum required amount after your first paycheck lands. Then make a second payment for however much you can afford after your second paycheck of the month lands.
Just make sure you’re not racking up credit card debt at the same time by accidentally putting too much towards your student debt and having to pay for expenses with credit.
Step 5: Consider student loan refinancing
Want to change the game when it comes to repaying your loans? Once you’ve landed a well-paying job, paid off some of your debt, and maybe even improved your credit score, it might make sense to refinance your debt.
Refinancing your student loan debt is essentially taking out a new private loan to pay off your current student loans. By doing so, you may be able to extend the term length of your loan or access a lower interest rate.
Extending your term length can help you reduce your monthly payments if they’re overwhelming you. Reducing your interest rate will also reduce your monthly payments and save you money over the life of your loan.
Be cautious about refinancing federal loans
While you can also refinance your federal student loans, think it through first. Even if you’re able to get a lower interest rate, refinancing federal loans will forfeit the protections federal loans offer, including subsidized rates, loan forgiveness, and income-driven repayment.
That could make repaying your loans harder down the line if you experience a change in income or want to return to school.
However, if you’re trying to quickly repay your debt and are confident your income won’t be going down, getting a lower interest rate could help you repay it faster.
If you’re ready to refinance, check out our picks for the best student loan refinance companies.
Step 6: Work on increasing your income, but not your expenses
Focus on ways to increase the amount of money you have coming in each month while decreasing how much you spend—or at least keeping your expenses level.
Avoid lifestyle inflation
Repaying $100K in student loans will take years, and during that time your income is likely to grow significantly. Entry-level jobs come with entry-level salaries, but as you climb the ladder in your profession—or just get regular raises—you can use that additional income to supercharge your payments.
To repay your debt faster, avoid lifestyle inflation. This means that as your income increases, your monthly spending stays the same.
While it might be tempting to buy a new car or get a bigger apartment when you get promoted, sticking to the same simple lifestyle of taking the bus or living in a studio for a few extra years will help you repay your debt faster and save you money in the long run.
Reduce the urge to keep up with your friends. They might not have as much student loan debt as you (or they might just be resigned to carrying that debt for longer), but you’ll thank yourself later when you’re finally out of debt.
Pick up a side gig
Another way to pay off your debt faster is to take on a side hustle. Side hustles are additional part-time work you do outside of your main job, and you can dedicate that income exclusively to your $100K in debt.
After a certain point, you’ll run out of ways to reduce your spending; after all, you still need food and a place to sleep every night. So, increasing your income is a great way to direct more money toward your student loans and pay them off faster.
You have a lot of side hustle ideas to choose from. For example, if you’re good at photography, you could start taking headshots for local actors or businesses. Or you could rent out a room in your apartment through a home-share app like Airbnb.
Think about the skills you have and how you can leverage them to make a little extra money to direct toward your debt.
Use your windfalls smartly
Another thing you should consider doing is directing any windfalls you get directly toward your debt. For example, if you get a big tax refund or a bonus at work, consider using that money to take a bite out of your loans instead of going on vacation.
You should budget some money for fun and relaxation—otherwise you may face repayment fatigue.
But with every dollar you direct toward repayment, you’re that much closer to being out of debt, and you may even end up finding accelerated debt repayment enjoyable in itself.