How to pay off student loans in 10 years

Paying off student loan debt within 10 years is doable and can help you become debt-free sooner so you can reach other financial goals.

Several expedited payoff options exist, and if you qualify for student loan forgiveness you could even eliminate debt without having to pay back the entire balance.

Refinancing is another option to pay off your student loans. By visiting Credible, you can learn more about student loan refinancing and compare rates from multiple private student loan lenders.

Here are four ways to pay off student loans in 10 years:

• Stay on the Standard Repayment Plan, if eligible
• Find out if you qualify for student loan forgiveness
• Pay more than the minimum, and increase the payment frequency
• Refinance your student loans

Stay on the Standard Repayment Plan, if eligible

The Standard Repayment Plan is the default repayment plan for most federal student loans and comes with a 10-year repayment term. Making payments under this repayment plan for the entire term will pay off your student loans in your desired 10-year time frame.

For private student loans, there’s no standard term. Instead, terms typically range from five to 20 years, depending on the lender and the loan term you chose when you apply.

But if you have a longer private loan term, you don’t have to stay with that term forever. Refinancing private student loans could be a way to adjust your monthly payments and choose a term that’s less than 10 years.

What to know about income-driven repayment plans

Income-driven repayment (IDR) plans set your monthly payment amount based on your income and household size. After 20 to 25 years you can have your remaining balance forgiven, depending on the IDR plan you’re enrolled in.

Making payments under an IDR plan won’t pay off your loans within 10 years — but it could offer you temporary payment relief if you’re struggling to keep up with the 10-year Standard Repayment Plan. And you can always increase your payments once your financial situation improves.

The U.S. Department of Education offers four income-driven repayment plans:

• Revised Pay As You Earn Repayment Plan (REPAYE Plan) — Generally sets payments at 10% of your discretionary income. Direct Subsidized, Unsubsidized, PLUS Loans taken out by the student, and Consolidation Loans that didn’t include loans made to parents are eligible.
• Pay As You Earn Repayment Plan (PAYE Plan) — Generally sets payments to 10% of your discretionary income, and payments are never higher than what they’d be under the Standard Repayment Plan. Direct Subsidized, Unsubsidized, PLUS Loans taken out by the student, and Consolidation Loans that didn’t include loans made to parents are eligible. To qualify, you must be a new borrower who took out your first student loan after Oct. 1, 2007, and your first Direct Loan after Oct., 1, 2011.
• Income-Based Repayment Plan (IBR Plan) — Generally sets payments to 10% of your discretionary income if you borrowed after July 1, 2014, and 15% of your income if you borrowed before July 1, 2014. Direct Subsidized, Unsubsidized, PLUS Loans taken out by the student, and Consolidation Loans that didn’t include loans made to parents are eligible. Additionally, Subsidized and Unsubsidized Federal Stafford (FFEL) Loans, FFEL PLUS Loans borrowed by the student, and FFEL Consolidation Loans that didn’t include loans made to parents are eligible.
• Income-Contingent Repayment Plan (ICR Plan) — Generally sets payments to 20% of your discretionary income or what you’d pay under a 12-year term, whichever is less. Direct Subsidized, Unsubsidized, PLUS Loans taken out by the student, and Consolidation Loans that didn’t include loans made to parents are eligible.

If you’re interested in refinancing private student loans, you can easily compare prequalified rates from multiple lenders using Credible.

Find out if you qualify for student loan forgiveness

The federal government offers two popular loan forgiveness programs — Public Service Loan Forgiveness and Teacher Loan Forgiveness. Here’s how both work:

Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) is a program that forgives federal loans after you make 120 qualifying payments while working full-time at a qualifying not-for-profit or government agency.

Direct Loan payments are usually the only ones that count toward PSLF. But the government is currently accepting past payments you’ve made on other federal loans as long as you consolidate them into a Direct Consolidation Loan. This PSLF waiver expires when the COVID-19 student loan relief measures end on Oct. 31, 2022.

Teacher Loan Forgiveness

The Teacher Loan Forgiveness Program forgives your student loans if you work for five years in a low-income school or education agency.

The maximum loan amount forgiven is up to $17,500 on Direct Loans and federal Stafford Loans. In order to qualify, you must have a bachelor’s degree and a state teaching certification.

Pay more than the minimum, and increase the payment frequency

Increasing your student loan payments and making bi-weekly or extra monthly payments can help you chip away at the debt faster.

Remember that every little bit counts, so even if you only have an extra $100 per month to spare, putting that extra money toward debt could speed up the payoff process.

For example, if you owe $30,000 in student loans with a 6.8% interest rate and a 15-year term, increasing your payments from $266 to $366 per month changes your payoff date from August 2037 to November 2031.

That extra $100 could get you out of debt a whopping six years faster.

Refinance your student loans

Refinancing your student loans is the process of paying off your old loan or loans with a new private loan that has different terms. Refinancing may lower your interest rate, which could lower your payments. It is also possible to refinance student loans with bad credit.

Plus, when you refinance, you could choose a shorter loan term that schedules you to pay off the debt in 10 years or less. When applying for refinancing, lenders review these factors to determine if you qualify and with what interest rate:

• Credit — You generally need good credit to qualify for student loan refinancing, but excellent credit could help you land lower interest rates.
• Income — You’ll need to show you have sufficient income to keep up with payments. Some lenders also have minimum income requirements.
• Debt-to-income (DTI) ratio — Your DTI ratio is how much of your gross monthly income goes toward your debt payments. Requirements for DTI ratio can vary by lender, but you may need a DTI ratio of 50% or less to qualify.

If you have less-than-perfect credit, applying with a cosigner could help improve your approval odds and get you a better rate.

But before refinancing federal student loans, consider that changing them from federal loans to private student loans will erase the benefits you have with federal loans.

For example, IDR plans and forgiveness programs aren’t available with private loans. If you think you might qualify for loan forgiveness or you’re concerned about job security and your ability to make payments, staying with federal loans may be a better choice.

Instead of refinancing your federal loans, you could consolidate student loans into a Direct Consolidation Loan to combine many payments into one, and then you could make extra payments to speed up the debt-payoff timeline.