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If you owe $200,000 or more in student loans, paying off your debt can feel like an insurmountable task. Getting debt-free is possible, though, with a solid plan and determination. By creating a budget and exploring all your repayment options, you can chip away at that debt and work toward a balance of $0. Read on for 11 steps you can take to pay off $200,000 in student loans and regain your financial freedom.
11 Steps You Can Take to Pay Off $200,000 in Student Loans
Whether you’re dealing with undergraduate debt, graduate school loans, or both, these steps can help you pay off your balance (and those ever accruing interest charges) and say goodbye to your student loans once and for all.
1. Start With a Budget
Before you can come up with a plan to pay back your student debt, you need to know what you’re working with in terms of your income and expenses. That’s why your first step is creating a budget.
By creating a budget, you can see where your money is going and identify areas where you can cut back. You might also rearrange your priorities, so you’re spending less in one category and have more to put toward your student debt each month.
You can use a simple spreadsheet or a budget-tracking app like Mint or YNAB. Some experts recommend the 50/30/20 approach to budgeting, where you spend 50% on needs, 30% on wants, and 20% on savings. If you can cut down some of those percentages, you’ll have even more to put toward your student loans.
Steps like cooking at home more, switching to a more affordable car, or downsizing in other areas of your life can all help you save money and afford your loan payments — or pay them off even sooner.
2: Understand Your Loan Terms
As tempting as it is to ignore your student loan debt and all the anxiety that comes with it, avoiding the problem isn’t going to solve it. That’s why your next step is signing into your loan accounts and reading over the terms of your loan.
Make sure you understand how much you owe, your interest rate, and the repayment period. Make note of how much your payments are and when payments are due each month.
Understanding the terms of your loan will help you come up with a repayment plan that works for you.
3. Explore All Your Repayment Options
If you owe federal student loans, you have a number of repayment plans available to you. Here are your options:
- Standard plan: Make fixed monthly payments over 10 years.
- Graduated plan: Start out with smaller payments that increase every two years over 10 years.
- Extended plan: Make fixed or graduated payments over 25 years.
- Income-driven plans: Pay between 10% and 20% of your discretionary income each month over 20 or 25 years, depending on the plan. If you still owe a balance at the end, it will be forgiven.
Income-driven repayment plans can be a huge help if you’re struggling to afford your monthly payments, which would be understandable if you owe $200,000 or more in student loans.
They’re also the only plans that count toward Public Service Loan Forgiveness, so get your loans on an income-driven plan ASAP if you’re working toward that program.
Federal Student Aid’s Loan Simulator tool can help you compare your student loans on different repayment plans and choose the right one for you.
If you owe private loans, you won’t have as many options for repayment plans. If you need assistance, though, it’s worth reaching out to your lender to see if it can help.
5. Make Additional Payments
Did you know you can always pay your student loans off ahead of schedule without penalty? Of course, that’s easier said than done.
If you can afford it, though, making extra payments on your loans can help you get out of debt faster and save money on interest. Play around with a student loan calculator to see how much you’d need to pay each month to get out of debt in a certain number of years.
Even small extra payments can help accelerate your progress. Maybe you round up your monthly payments or make extra payments whenever you have extra cash.
You could also switch to a biweekly payment schedule, instead of a monthly one. Paying biweekly will result in one full month’s extra payment each year without any additional effort on your part.
If you’re making extra payments, check with your loan servicer to make sure it’s applying the payment correctly. You want your extra payments to go toward your principal balance, not toward interest charges or saved for a future bill.
6. Find Ways to Increase Your Income
When it comes to finding room in your budget to pay off $200,000 in student loans, you have two options: save money or increase your income. Finding ways to save can certainly help, but it will only take you so far.
If you’re really committed to getting rid of that debt, search for ways to increase your income. That could mean asking for a raise at work, applying to a new job with a higher salary, or earning a certification so you can advance in your career.
You could also consider earning extra money with a side hustle, such as:
- Driving for a ride-sharing service
- Offering your services on a marketplace like TaskRabbit
- Grocery shopping for an app like Instacart
- Renting out a room on Airbnb
- Finding freelance clients (for writing, web design, social media management, or another online service) through a marketplace like Fiverr or Upwork
If you’re entrepreneurial, you could even start your own business, whether you sell handmade jewelry on Etsy or start your own blog. For a quick cash infusion, you could also consider selling your used clothes or other items online.
7: Consider Consolidation
If you’re juggling multiple loans, consider consolidating them to simplify repayment. The government’s Direct Consolidation loan program lets you combine several loans into one while choosing a new repayment plan.
It also helps some loans become eligible for certain repayment plans. For instance, parent PLUS loans are only eligible for income-driven repayment if you consolidate them first.
Unfortunately, private student loans are not eligible for this federal loan consolidation.
8. Refinance Your Student Loans
Although private student loans aren’t eligible for federal Direct loan consolidation, they are eligible for refinancing. Federal student loans are eligible, too, so you could theoretically combine all your different loans into one.
Refinancing involves exchanging one or more of your existing student loans for a new one from a private lender. If you have good credit, you could get a better interest rate than you have now.
You can also choose new repayment terms, usually between five and 20 years. A shorter term could help you get out of debt faster, while a longer term will come with more affordable monthly payments.
A major word of caution around refinancing student loans, though — refinancing federal loans turns them private, meaning you lose access to federal income-driven plans, forgiveness programs, and other protections.
There’s no way to reverse the process, so make sure you’re comfortable sacrificing these federal programs before you refinance any federal loans with a private lender.
9. Pursue Student Loan Forgiveness
Depending on your career, you could qualify for a student loan forgiveness program. The government offers several options for federal student loans, including:
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Nurse Corps Loan Repayment
- Military loan forgiveness
Eligibility requirements vary by program, but it’s worth exploring your options to see if you could qualify. Learn more about your options for student loan forgiveness programs in this full guide.
10. Search for Student Loan Repayment Assistance
Along with student loan forgiveness programs, you might also find student loan repayment assistance programs, or LRAPs. All 50 states offer at least one LRAP to qualifying borrowers.
Most require you to work for two years or more in a shortage area of underserved community. Some professions that commonly qualify include:
- Doctors
- Nurses
- Veterinarians
- Dentists
- Pharmacists
- Teachers
Some colleges and private organizations also offer loan repayment assistance. Plus, an increasing number of companies are offering loan assistance benefits to their employees.
The best part of these LRAPs? You can usually use the money toward both federal and private student loans.
11. Seek Professional Help
If you’re struggling to pay off your education debt, it may be helpful to seek professional help. A financial advisor or student loan counselor can help you come up with a plan to pay off your debt. Together, you can create a budget and explore your repayment options. A counselor can also help you identify any potential mistakes that could stall your progress.
If you want to keep costs down, look for a nonprofit credit counseling agency that offers student loan counseling. Some organizations include the National Foundation for Credit Counseling, the Financial Counseling Association of America, and the Association of Independent Consumer Credit Counseling Agencies.
Avoid anyone who asks for major fees upfront. And remember, you never have to pay anyone to get on an alternative repayment plan, apply for student loan forgiveness, or consolidate your loans. You can do all those things on your own for free. Be wary of anyone charging for loan forgiveness or consolidation, as you could be encountering a scam.
How to Pay Off $200k in Student Loans FAQ
Here are some frequently asked questions and answers around paying off a large amount of student loan debt.
How long will it take to pay off $200,000 in student loans?
On average, it takes anywhere from 10 to 30 years to pay off $200,000 in student debt. The amount of time it takes depends on a variety of factors, including your interest rate, repayment plan, and how much you can afford to pay each month. Using a student loan calculator can help you determine how much you need to pay each month to get out of debt within a specific time frame.
What’s the best way to pay off $200,000 in student loan debt?
Everybody’s financial situation is different, but it can help to create a budget, explore repayment plans, make extra payments, and/or apply for loan forgiveness programs. By being proactive about paying off your education debt, you can come up with a plan that works for your individual financial situation.
Can I consolidate my student loans to pay off $200,000 in debt?
If your loans are federal, you can consolidate them with a Direct consolidation loan. Federal student loan consolidation can help simplify repayment and get your loans on a new repayment plan. However, it won’t result in a lower interest rate.
If a lower interest rate is your priority, you could consolidate your loans through refinancing. Refinancing lets you combine federal and private student loans together, and you could snag a lower interest rate if you have good credit.
However, refinancing federal student loans turns them private, meaning you lose access to federal repayment plans and forgiveness programs. Be careful not to refinance your federal loans if you want to retain access to federal benefits.
Are there any loan forgiveness programs for $200,000 in student loan debt?
There are several loan forgiveness programs for student loan borrowers, including Public Service Loan Forgiveness (PSLF), the Teacher Loan Forgiveness program, and the Nurse Corps Loan Repayment program. Each program has different guidelines and requirements, so research your options to see which one could be the right fit for you.
Can making additional payments help me pay off $200,000 in student loan debt faster?
Yes, making extra payments can help you pay off your debt faster. By rounding up your monthly payments or making extra payments whenever you have extra cash, you can chip away at your balance more quickly. Just make sure your loan servicer is applying your payments to your principal balance, rather than saving them for interest charges or future payments.
Is it possible to become debt-free with $200,000 in student loan debt?
Yes, it is possible! It may take some time and serious determination, but with a solid plan, you can chip away at your debt and eventually become debt-free.
Want better rates? Here are the best banks to refinance student loans:
| Variable rates start at... | Fixed rates start at... | Repayment terms | Welcome bonus | Check your rates | |
|---|---|---|---|---|---|
 | 4.54% | 4.49% | 5 - 20 years | $200 | Visit LendKey |
 | 4.99% | 4.47% | 5 - 20 years | $200 | Visit Earnest |
 | 4.22% | 3.97% | 5, 7, 10, 15, and 20 years | $120 | Visit Laurel Road |
 | 4.53% | 4.40% | 5 - 20 years | $100 or $200, depending on the amount you refinance | Visit Credible |
 | 5.09% | 4.74% | 5, 7, 10, 15, and 20 years | $100 | Visit SoFi |
 | 4.53% | 4.83% | 5, 7, 10, 15, and 20 years | $100 | Visit ELFI |