8 ways to pay off $100K in student loans

Six-figure student loan debt can cast a shadow over your personal finances, making milestones like buying a home, starting a family, and even retiring someday seem like pipe dreams. But there are several strategies you can use to accelerate your debt payoff timeline and decrease the amount you owe, potentially saving you thousands in interest. 

Even small changes can make a big difference. For instance, if you owe $100K in student loans at 7%, you could save almost $30,000 by reducing your repayment term from 25 to 20 years. And more aggressive repayment can have an even larger impact:

But if you can't afford to increase your monthly payments, there are other ways to pay off $100,000 in student loans. 

1. Refinance student loans

Best for: Borrowers with high-interest private student loans or those who have significantly improved their credit scores since taking out their loans

Student loan refinancing allows you to take out a new loan with different terms — potentially with a lower interest rate — and use it to pay off your existing student loans.

By securing a lower interest rate, you can reduce the amount of money you’ll pay in interest over the life of the loan, which can save you thousands of dollars. Additionally, you might be able to adjust your loan term or payment amount to pay off your debt early.

However, be aware that refinancing federal student loans means losing access to federal protections and benefits, such as income-driven repayment plans, forbearance, deferment, and loan forgiveness programs.

2. Apply for federal forgiveness programs

Federal student loan forgiveness programs cancel the remaining balance of your federal student loans after working in a qualifying profession for a minimum number of years and/or making a certain number of qualifying payments.

Here are a few forgiveness programs to look into:

Public Service Loan Forgiveness (PSLF)

Best for: Federal loan borrowers who work in qualifying public service positions

The Public Service Loan Forgiveness (PSLF) program is available to borrowers who work for a government or not-for-profit organization, in a qualifying public service role.

You can have your remaining balance forgiven after making 120 qualifying payments while enrolled in an income-driven repayment plan and working full-time for an eligible employer. This translates to making at least 10 years of payments.

Teacher Loan Forgiveness (TLF)

Best for: Federal loan borrowers who work in qualifying teaching positions

Forgiveness for teachers is also available through the Teacher Loan Forgiveness (TLF) program. This program is available to borrowers who teach full-time for five consecutive years in low-income schools or educational service agencies.

Eligible teachers can have up to $17,500 of their federal student loans forgiven.

Related: 5 ways to get student loan forgiveness in 2024

3. Consider income-driven repayment (IDR)

Best for: Federal loan borrowers struggling with high loan payments relative to their income

Income-driven repayment (IDR) plans base your monthly loan payments on your income and family size, making your student loan payments more manageable for your financial situation. Any remaining loan balance is forgiven after 10 to 25 years of qualifying payments, depending on the specific plan.

There are four income-driven repayment options to consider:

• Saving on a Valuable Education (SAVE) plan
• Pay As You Earn (PAYE) plan
• Income-Based Repayment (IBR) plan
• Income-Contingent Repayment (ICR) plan

To see which plan makes the most sense for you, you can input your loan information in the loan simulator tool on Federal Student Aid’s website. You’ll be able to review all of your options and get a sense of what your monthly payments might look like.

4. Make extra payments when you can

Best for: Borrowers who have room in their budget to make extra principal payments

By paying more than the minimum required each month, you can reduce the principal balance of your loan, which in turn decreases the total interest accrued over time.

To illustrate the impact of making extra payments, consider the following example for a $100,000 loan at an interest rate of 7.00% on the 10-year Standard Repayment plan:

Paying an extra $200 per month will shave two years off the 10-year Standard Repayment plan and save you $8,371 in interest.

Consider allocating any windfalls — such as tax refunds, work bonuses, or monetary gifts — toward your student loan balance. Using these extra funds to make additional payments can reduce the time it takes to pay off your debt and potentially save you thousands of dollars in interest.

5. Explore loan repayment programs

Best for: Borrowers already working in or considering a career in eligible fields

Loan repayment programs (LRPs) are typically offered by government agencies, state governments, and some private organizations as an incentive to attract professionals into fields where there’s a high demand for skilled workers, such as health care, research, and the military.

LRPs pay off a portion of your student loan debt in exchange for a commitment to work in a specific profession or geographic area for a set period — usually two to three years.

For example, the Nurse Corps Loan Repayment Program is available to registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty who work for two years in a critical shortage facility or an eligible nursing school. The program pays up to 85% of unpaid student loan debt.

To research loan repayment programs in your area, visit your state’s education department website.

6. Apply the debt avalanche method

Best for: Borrowers with multiple student loans who are committed to an aggressive repayment strategy

The debt avalanche method involves prioritizing your student loan debts by interest rate, paying the minimum on all your loans, and then using any extra money to pay off the debt with the highest interest rate first. Once you pay off the highest-interest debt, you move on to the next-highest, and so on, creating an “avalanche” effect as each debt is cleared.

For example, say you have three student loans:

• Loan A: $5,000 at 7.00% interest
• Loan B: $100,000 at 4.50% interest
• Loan C: $15,000 at 3.00% interest

Using the debt avalanche method, you would first focus on paying off Loan A while paying the minimum on Loans B and C. Once you fully pay off Loan A, you concentrate on Loan B, and finally, Loan C.

This method is particularly effective for people that have multiple student loans with different interest rates. Focusing on the most expensive debt first minimizes the total interest paid over time, potentially saving you thousands of dollars.

Related: Pay off student loans: 10 strategies to be debt-free

7. Get help from your employer

Best for: Borrowers whose employers offer educational assistance programs

If your employer offers an educational assistance program, you might be able to use those funds to pay off a portion of your student debt. Historically, program funds were strictly reserved for educational expenses such as tuition, fees, textbooks, and supplies. However, the IRS temporarily expanded expenses to include student loan debt after the pandemic hit.

Through Dec. 31, 2025, any educational assistance program funds can be used to pay off qualified federal and private student loans. Just be aware that any amount received over $5,250 will count as taxable income, regardless if it was paid directly to you or your lender.

8. Use 529 college savings funds

Best for: Borrowers who have or can open a 529 savings plan

A 529 plan is not only a popular tool for saving for college, it can now be a smart option to help you pay off your student loan debt.

As of 2019, federal law allows you to use up to $10,000 from a 529 account to pay off the principal or interest on qualified student loans. This withdrawal can be made tax-free to pay your lender directly. Keep in mind, this $10,000 is a lifetime limit for each beneficiary but can also extend to siblings.

Many states also offer tax deductions for contributions to a 529 plan. If you're paying off student debt, but don't yet have a 529 plan, you could potentially open one, contribute to it and get a state tax deduction, then turn around and use those funds to pay down your student loans. To see what tax advantages your state plan offers, check out our list of the best 529 plans and learn how to choose the right one.

Combine strategies for a faster payoff

Tackling over $100,000 in student loan debt is no small feat, but with the strategies discussed above, you can dig out from under your debt faster and more efficiently than you might imagine possible.

Of course, larger balances will naturally take longer to pay off, and you might need to use a combination of strategies and take a more aggressive approach. For example, you might look into student loan forgiveness programs for your federal student loans, refinance your private student loans to lower your interest rate, and then make extra payments toward that new loan to pay off the principal faster.

Just remember, paying off $100K+ in student loans is a marathon, not a sprint. Stay committed to your repayment plan, and you can achieve financial freedom and set yourself up for a prosperous future.