How to Pay Off $100K in Student Loans in 6 Steps

If you have $100,000 or more in student loans, paying off your full balance may seem impossible. After all, monthly payments on a 10-year, six-figure loan at 5.5% interest can set you back more than $1,000 a month. On top of that, you’ll have to pay thousands of dollars in interest over the life of the loan.

But the good news is that there are several strategies you can use to ease the burden of student loan repayment and even pay off your loans faster.

How many borrowers have $100,000 in student loans?

According to the most recent data from The College Board, approximately 7% of borrowers with federal student loans have balances of $100,000 or higher. This represents an increase of 1% since 2020.

One reason for the higher number of graduates with at least six figures and loans could be higher education costs—tuition and fees are up 4.7% since Feb. 2020, according to the U.S. Bureau of Labor Statistics.

Due to the COVID-19 pandemic, most federal student loan payments were paused in March 2020, and interest didn’t accrue on the loans. However, student loan payments resumed in October 2023.

6 steps to paying off your $100,000 student loans

If you’re faced with high student loan payments on student loans of $100,000 or more, there are steps you can take to pay them off as quickly as possible.

Step 1: Choose a repayment plan

Choosing the right repayment plan is key to helping you pay off $100,000 in student loans.

Choosing a repayment plan is only relevant if you hold federal loans, however. Private student loans typically don’t have repayment plan options other than the repayment period length you likely chose when you took out the loan. 

Tip

If you’re unsure what types of student loans you have, you can check whether you have federal student loans by logging into StudentAid.gov and visiting the loans section under the “MyAid” tab. To find information about any private student loans you have, review your credit reports for free by visiting AnnualCreditReport.com.

If you have federal student loans, though, you have the following repayment options to choose from.

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. It will also minimize the amount of interest you pay over the life of your loans.

However, standard repayment may come with high monthly payments, which could be a problem if you’re earning an entry-level salary in your profession. 

The table below gives you a rough estimate of your monthly payments 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 (2023–2024 rates)	Monthly payment under the 10-year standard repayment plan
$80,000	5.50%	$868
$100,000	5.50%	$1,085
$120,000	5.50%	$1,302

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)
• Saving on a Valuable Education (SAVE)

These plans allow you to pay a portion of your discretionary income (10% to 20%) toward your $100,000 in student loans every month. After 20 to 25 years of on-time payments (a minimum of 10 years for PSLF), you can have your remaining student loan balance forgiven.

While these plans will reduce your monthly payments, you will pay 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 enrolling 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. 

When considering loan consolidation, 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.

Consider this example in which you’re consolidating two federal student loans:

1. A $60,000 PLUS loan, with a 7% interest rate and a 10-year repayment term, resulting in a $697 monthly payment
2. A $40,000 undergraduate loan at a 5.50% interest rate and a 15-year repayment term, resulting in a monthly payment of $327.

If you’re approved for a Direct Consolidation Loan, your new loan’s APR will be a weighted average based on the loan amount and APR of your existing loans.

To calculate the weighted average, multiply each loan’s amount by the APR to get the per-loan weighted factor.

60,000 * 7% = 4,200

40,000 * 5.50% = 2,200

Next, add the per loan weight factor up to get 6,400. Then, divide the per-loan weighted factor by the total loan amount—$100,000—and multiply by 100.

(6,400/100,000) * 100 = 6.4% 

In the scenario above, your consolidated loan’s APR will be 6.4%.

If your new loan’s repayment term is 15 years, your monthly payment would be $866. 

Note that you can choose a shorter repayment term if you’re concerned about paying more interest over the life of the new loan.

Step 2: Make a budget to pay down your student loan debt

Creating a student loan repayment budget can help you free up cash to put toward your debt. If you don’t have one, take the following steps.

1. Create a list of your income and expenses.
2. Review your expenses and identify areas where you can eliminate wants, such as pricey TV streaming services.
3. Separate your expenses into different categories and set monthly spending limits for each one.

Sample student loan repayment budget
	Amount
Monthly income
Main job	$6,000
Side hustle	$1,000
Total monthly income	$7,000
Expenses
Monthly housing	$1,500
Groceries	$500
Car note	$500
Car insurance	$300
Utility bill	$150
Gym	$100
Daycare	$800
Streaming services	$100
Entertainment	$200
Cell phone	$50
Internet	$75
Emergency fund	$500
Total monthly expenses	$4,375
Student loan repayment	$1,500
Remaining budget	$725

Most people underestimate their expenses. Before committing to a budget, reflect back on several months of actual expenses to confirm your spending.

Michael Menninger

CFP® 

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, consider prioritizing your payments by using what’s called the debt avalanche method if you have extra money available and want to save the most on interest. 

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 (assuming you have not consolidated them). 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. 

Ask the expert

Michael Menninger

CFP®

High student loan debt can inhibit you from qualifying for other loans, such as buying a house. Paying it off quickly lifts the emotional burden of excessive debt. If the debt is keeping you from making retirement plan contributions that are being matched, it can be detrimental. Or if you want or need to save money for a separate goal, you can’t ask for student loan payments back.  

Step 4: Consider making multiple payments each month

If you want to pay your debt off even 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 get paid every other week instead of bi-monthly—meaning you get 26 paychecks in a year instead of 24—you’ll make a full month of extra payments by the end of the year without realizing it.

This may not sound like much, but it can save you thousands in interest. For example, making bi-weekly instead of monthly payments on a $100,000 student loan at 7% could lead to paying your loans off 12 months faster and saving over $4,000 in interest.

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 ensure 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

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 student loans if you can qualify for a lower interest rate. 

Student loan refinancing means 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, but note that doing so will likely result in paying more interest over the life of the loan.

Lowering your interest rate might 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 twice before doing so. Even if you can get a lower interest rate, refinancing federal loans means you’ll lose access to federal loan protections, including subsidized rates, loan forgiveness, income-driven repayment, and loan forgiveness in the case of the borrower’s death.

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

Although it may be challenging, increasing your income while keeping your expenses around the same amount can free up extra cash to pay off your student loans faster. Here are some strategies to consider:

Avoid lifestyle inflation

Repaying $100,000 in student loans will take years, and during that time, you may see a substantial increase in your income. 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 your existing skills and how you can leverage them to make a little extra money to direct toward your debt.

Use any windfalls wisely

Another thing you should consider doing is directing any windfalls you get toward repaying your student 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 find accelerated debt repayment enjoyable.

How long does it take to pay off $100K in student loans?

How long it’ll take you to repay your loans depends on several factors, including the repayment plan you choose and the size of your monthly payment. 

Here’s what your monthly payments could look like for a $100,000 student loan with a 6% APR and different repayment terms:

Repayment term	Monthly payments	Total interest paid over the life of the loan
5 years	$1,933	$15,997
10 years	$1,110	$33,225
15 years	$844	$51,984
20 years	$716	$71,943
25 years	$643	$93,290

As your income increases, consider making extra payments on a 10-year, $100,000 student loan at 4.75% can speed up your loan repayment. The table below shows what happens if you increase your payments by $100 a month.

Repayment year	Monthly payment	Total interest paid	Total monthly payments
First year	Minimum payment of $1,048	$25,817	120
Second year	$1,148	$22,856	107
Third year	$1,248	$20,514	97
Fourth year	$1,348	$18,613	88
Fifth year	$1,448	$17,040	81