7 strategies to consider for repaying student loans

Help keep your student loan payments manageable, and avoid delinquency or default.

 Student interview

More than 43 million Americans have student loan debt, with an average balance of more than $37,000, according to the Education Data Initiative. After a three-year pause on Federal student loans, many people with student loan debt are building these payments back into their budgets — and new graduates are facing student loan payments for the first time.

Here are some strategies to help keep your student loan payments manageable — and avoid delinquency or default — so the investment you made in education doesn’t throw you off track.

1. Determine whether you’re eligible for loan forgiveness

You may be eligible to have your federal student loans forgiven—that is, you no longer have to make payments. The chart below includes some common forgiveness options. The programs can be complex and the terms can change, so visit the Federal Student Aid Loan Forgiveness site to learn more.

common forgiveness options
Type of loan forgivenessRequirementsAmount forgivenForgiveness amount taxableEligible loan types
Teacher Loan Forgiveness
  • Teach full time for five consecutive years at low-income schools
Up to $17,500No
  • Direct loans
  • Federal Family Education Loans
Public Service Loan Forgiveness
  • Work full time for a qualifying public service employer AND
  • Make over 120 qualifying payments (10 years’ worth)
Balance of outstanding loanNo
  • Direct loans
  • Other loans may be eligible if consolidated into a Direct Consolidation Loan
Closed School Loan Discharge
  • Your school closed while you were enrolled or shortly after you withdrew
Balance of outstanding loanNo
  • Direct loan
  • Federal Family Education Loan
  • Perkins Loan
Borrower Defense Loan Discharge
  • Your school misled you or engaged in misconduct or other violation of laws
Balance of outstanding loanNo
  • Direct loan
  • Other loans may be eligible if consolidated into a Direct Consolidation Loan
Income-Driven Repayment (IDR) Plans
  • Be enrolled in an IDR plan that offers forgiveness (there are four)
  • Generally must make qualifying payments for 20 or 25 years*
Balance of outstanding loanUsually yes
  • Varies depending on the specific IDR plan

*Payments into another type of plan would count towards your 20 or 25 years as long as the payment amount was at least equal to the amount that would be paid under a Standard Plan. For instance, you could be making regular payments while enrolled in the Standard Payment Plan for five years, switch to an IDR plan and have the payments made while on the Standard plan count toward the 20 or 25 years.

2. Choose the best repayment plan for your situation

Repayment plan options for federal student loans

About 92% of outstanding loans are federal student debt, and these come with many repayment plan options you can change at any time. You can use the Federal Student Aid Loan Simulator to see which options are available to you, with estimates for monthly and overall payments based on which plan you choose.

Below are a few of the repayment plan options:

repayment plan options
 PaymentsTime PeriodConsiderations
  • Payments are fixed
  • Usually results in the least amount paid over time
  • 10–30 years for consolidation loans
  • 10 years for other loans
  • Not a good option for Public Service Loan Forgiveness
  • Payments start low and gradually increase
  • Will pay more over time than with a Standard plan
  • 10–30 years for consolidation loans
  • 10 years for other loans
  • Generally, not qualified for Public Service Loan Forgiveness
  • Payments can be fixed or graduated
  • Payments are lower than those of Standard and Graduated plans
  • Will pay more over time than with a Standard plan
  • 25 years
  • Not qualified for Public Service Loan Forgiveness
  • Must have more than $30,000 in outstanding direct loans.

Income-Driven Options

Note: There are multiple to choose from

  • Payments are based on income and family size.
  • Payments are recalculated each year
  • Will generally pay more over time than with a Standard plan
  • Generally, 20–25 years, with balance forgiven after that time
  • Generally, a good option for those seeking loan forgiveness.
  • You may owe income tax on the amount forgiven

Repayment plan options for Private student loans

Private lenders offer their own repayment plans, generally ranging from five to 15 years (or longer). If it would be helpful, ask your lender about graduated repayment programs, where your payments will be lower your first year out of school.

3. Consider consolidating your loans

If you have multiple federal student loans, you may want to combine them to simplify your loans and lower your payments.


  • Lower monthly payment
  • Single loan with one monthly bill
  • A fixed interest rate for the life of the loan
  • May give you access to additional income-driven repayment plan and forgiveness options


  • Can increase your repayment period, which means more payments and interest overall
  • Outstanding interest on the loans you consolidate becomes part of the original principal balance. This means the interest will be charged on a higher balance than if you had not consolidated.
  • Consolidation could result in the loss of some benefits of your individual loans. Ask your loan servicer to learn more.

You don’t have to consolidate all your loans, so if you’re concerned about losing the benefits attached to individual loans, you can leave them out of the consolidation.

4. Set up automatic repayments

You may find it easier to stay on track if you set up automatic payments through a checking or savings account. You might also be rewarded for your consistency: Federal student loan servicers may reduce your interest rate by 0.25% when you sign up for autopay. 

5. Check with your employer about repayment assistance

Employers are increasingly offering student loan repayment assistance, although it’s up to each employer what benefits they provide, if any. Some options to explore:

  • Signing bonuses that can pay off student loans
  • Recurring payments that employers send directly to lenders
  • Allowing employees to “cash in” their unused time off and apply it to student loan debt
  • Contributing up to $5,250 annually per employee toward student loan assistance without increasing the employee’s gross taxable income (only through 2025)
  • Starting in 2024, allowing employee student loan contributions to qualify for an employer match to their retirement account.

6. Use 529 plan funds

You may be able to use 529 plans to help pay off student loans. While many people will deplete 529 savings before taking out student loans, there are situations where this may be an option. For example:

  • You have a sibling who didn't use all the 529 funds that were saved for them. Your parent may be willing to reallocate those funds toward your student loans.
  • You took out loans expecting forgiveness (e.g., you planned on teaching to get Teacher Loan Forgiveness), but that's no longer an option.
  • You were saving for your children's education, they didn't end up using all their 529 funds and you have outstanding student loans.

The 529 account owner will have to make this decision as the funds are in their control, and each student is subject to a $10,000 maximum lifetime limit. You must be either the beneficiary of the 529 or a sibling of the beneficiary. State tax treatment varies, so consult with a tax advisor to ensure you understand all the tax-related issues.

7. Explore if refinancing your loans would be beneficial

You may be able to refinance your student loans to a lower payment, which is more desirable if you can get a lower interest rate. If the lower payment is due to extending your repayment period, this can increase how much you end up paying overall. Keep in mind that you can only refinance a federal loan by switching to a private loan, which results in giving up the protections and benefits of federal loans. 

Loan deferment and forbearance

If you’re in a short-term financial bind such as a recent job loss, you may qualify for federal loan deferment or forbearance. Both options will allow you to stop making payments temporarily. A key difference is that interest doesn’t accrue during deferment for subsidized and Perkins loans. For other loans in deferment and loans in forbearance, interest will continue to accrue. Additionally, periods of deferment or forbearance likely won't count toward forgiveness requirements. For these reasons, it may be worth looking into another repayment plan, such as income-driven repayment, before requesting deferment or forbearance.

A word of caution: Watch for scams

Unfortunately, the student loan world can attract scammers that promise to help you with your debt. Look out for scam warning signs, such as:

  • They ask for upfront fees and promise fast loan forgiveness or balance reduction.
  • They ask for your log-in information.
  • They pressure you to make decisions quickly because the offer is ending soon.

It’s best to work directly with your loan servicer or make changes using the Federal Student Aid website.

Work debt payments into your financial strategy

If you can pay more than the minimum on your student loans, make sure you’re balancing payments with other important financial goals, such as building your emergency fund or investing for retirement. On the other hand, if you’ve explored all the strategies above and are still struggling, you may want to revisit your budget and reduce expenses elsewhere. Either way, your financial advisor can help you build your student loan payments into your overall financial strategy.