This is How Long it Takes to Pay Off Student Loans

On average students will pay back their loans based on a 10-year repayment schedule. Under federal income-based repayment, the debt is often forgiven after 20 years. Still, several factors impact how long it takes to pay off student loans.

How Much You Borrow In Student Loans

The biggest factor in how long it takes to pay off your student loans is the total amount you borrow. The average student graduates with $30,000 in outstanding student loan debt, but if you attend a school with lower tuition and lower cost of living, you might not have to borrow as much. When you take out loans to pay for an advanced degree as well as your undergraduate education, the total will be higher.

Before you sign for a student loan, think about whether you’ll be able to repay the total within 10 years or before you retire, depending on which comes first. If you can work during school to reduce the amount you’ll have to borrow, you’ll graduate with less debt and pay off your loan faster.

Look into grants and scholarships to help offset the cost as well. Anytime you can lessen the amount you have to borrow, you can reduce the amount of time it takes to pay the money back. It’s up to you to take the steps you need so you can pay off your student loan faster.

Your Student Loan Repayment Schedule

Another factor in how long it takes to repay your student loans is the repayment schedule. Most federal and private loans offer a grace period of at least six months after you graduate, leave school, or drop to half-time enrollment or less. That grace period gives you time to find a job and start saving money so you can start making your monthly payment. After the grace period ends, you’ll need to set up a regular payment plan to avoid late fees and penalties.

The average student loan repayment schedule is between 180 and 218 months or 15-18 years. If you borrow a higher total, such as for dental, medical, or law school, you may qualify for a repayment schedule over as long as 25 years.

Paying More Monthly Loan Payments Than Scheduled

You can shorten the repayment schedule by paying more than the monthly payment each month. Make sure to specify to your lender that the additional funds are to go toward the total outstanding loan, not the next month’s payment. When you pay extra, the amount goes toward the principal amount owed and can shorten the total time spent paying off your loans.

You can also reduce the total by refinancing your loan to a lower interest rate, especially if you qualified for a loan without much credit.

How Long It Takes to Pay Off Student Loans

While the thought of repaying student debt might feel overwhelming, there is no doubt that a college degree is worth the investment. On average, college graduates earn substantially more during their careers than those with high school diplomas. The additional income you’ll earn after earning your degree will make it easier to pay back your student loan.