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If you have over $100K of student loan debt, there are several strategies you can use to pay it off quickly or strategically.
I know the feeling of this level of debt all too well. Together, my husband and I have nearly $400,000 in student loans from graduate school and medical school. And my husband’s not even done with medical school yet — or finished adding student loans to that total.
Because he’ll be a physician in a few months, he’s on his way to earning a high income. However, that doesn’t diminish the student loan burden we both feel. So we’ll be trying a combination of things to eliminate this debt.
If you’re also six figures or more in the red and are looking for the best strategies to pay off $100K in student loans, you could consider these:
1. Minimize lifestyle inflation
2. Research student loan forgiveness programs
3. Consider income-driven repayment for federal loans
4. Look into student loan refinancing
5. Focus on increasing your income
1. Minimize lifestyle inflation
Good idea for: All borrowers looking to pay down debt fast
If you have $100K in student loan debt or more because you attended professional school, chances are you now also have a high income because of your education. Whether you’re a doctor, lawyer or went to business school, you likely had to put in a lot of time over several years to learn your craft.
| Average debt by common degree programs | |
|---|---|
| Dental | $292,169 |
| Law | $160,000 |
| Medical | $215,900 |
| Pharmacy | $179,514 |
| Veterinary | $157,146 |
Because you’ve spent so long at school, it’s easy to inflate your lifestyle once you get that first paycheck. However, I want to encourage you to keep living like a student for as long as possible.
For example, if you lived off of $30,000 per year while you were in graduate school, try to survive on the same amount during your first few years in the professional world. Hold off on making a new car purchase or buying a home.
If your take-home pay is $100,000 per year and you live on only $30,000, you now have $70,000 to put toward your debt and the interest your debt has accrued. Do this for a year (or more, if needed), and you could pay off your debt easily while having the rest of your career to enjoy the high income you worked so hard to achieve.
It’s important to note that avoiding lifestyle inflation can help anyone pay off their debt, regardless of their income level. It just comes down to spending much less than you earn so that you can pay off debt aggressively and enjoy a life without it.
| How to pay off $100K in student loans for… | |
|---|---|
2. Research student loan forgiveness programs
Good idea for: All borrowers, but particularly those working in public service careers
Six figures of debt can be daunting for anyone, no matter how high your income is. However, there are many different types of loan forgiveness that can help you pay off large portions of your debt.
Perhaps the best-known loan forgiveness program is Public Service Loan Forgiveness. With PSLF, you have to work in a nonprofit, governmental organization or another approved entity. After making 120 eligible on-time payments, your loans can be forgiven — and it doesn’t matter whether you have $100K of student loan debt or much less.
That said, the PSLF program might not be around forever, especially since some politicians have proposed eliminating it altogether. Plus, it requires that you diligently file the right paperwork every year so your application doesn’t get rejected. For now, the program remains functional, but there’s no guarantee that will always be the case.
Outside of PSLF, explore other loan forgiveness programs, including:
- Teacher loan forgiveness
- Student loan repayment assistance opportunities
- Student loan payment assistance via your employer
- Forgiveness via income-driven repayment
3. Consider income-driven repayment for federal loans
Good idea for: Borrowers who earn low wages, especially if you’re pursuing forgiveness or repayment assistance
Yes, enrolling in an income-driven repayment (IDR) plan can erase your balance after 20 or 25 years of payments, but it could make sense to take this route even if you’re not in it for the long haul.
IDR plans keep your monthly payments in line with your discretionary income, so you shouldn’t ever miss a payment deadline. These plans could give you the breathing room you need in your monthly budget while you’re starting or ascending in your career, or they could make sure you pay as little as possible toward your debt while you await PSLF after 10 years or another form of forgiveness in less time.
| Why You Should Be Either Very Aggressive or Very Passive in Repaying Student Loans |
IDR plans include:
Do the math, and you may find that you’ll pay less over time on an IDR plan than you would by refinancing (see below). You can calculate your monthly dues under each plan using our student loan calculators or the Department of Education’s Loan Simulator.
4. Look into student loan refinancing
Good idea for: Borrowers with strong and steady cash-flow
With student loan refinancing, you might be able to get shorter repayment terms and larger monthly payments, saving you money on interest over the life of the loan. Alternatively, you can choose a longer term to make your monthly payments less burdensome. And in both cases, you could qualify for a lower interest rate that would save you money regardless.
Student Loan Refinancing Calculator
If you started out with private student loans, you could have interest rates that are higher than what’s available on the market now. In that case, it’s probably worth comparison-shopping student loans to see if you can save through refinancing.
Just keep in mind that refinancing federal loans is a permanent choice and will strip the original debt of access to forgiveness programs mentioned above. Your new private loans also won’t be eligible for the Department of Education’s expansive menu of options to pause or postpone payments if you struggle in repayment.
5. Focus on increasing your income
Good idea for: All borrowers, but particularly for those earning low salaries
If you’re serious about paying off your six figures worth of debt quickly, finding ways to increase your income is also an effective strategy.
You might switch to a new career or change companies to pursue a higher salary. Or you could search for opportunities for a promotion and pay raise at your current employer.
Outside of boosting your main source of income, you could supplement it with a side hustle. There are a lot of freelance opportunities to choose from, but think about where your skills and experiences lie. If you have an MBA, for example, you could work part-time and help businesses learn how to budget and turn a profit.
As long as it doesn’t consume too much of your time or energy, a side hustle is something you could do outside of your regular office hours to make extra money. Then, you can apply those funds to your $100K student loan balance to pay it down faster.
Rebecca Safier and Andrew Pentis contributed to this report.
Originally published Aug. 21, 2015. Average student loan debt and other general information have been updated.
Interested in refinancing student loans?
Here are the top 9 lenders of 2021!| Lender | Variable APR | Eligible Degrees | |
|---|---|---|---|
 | 1.88% – 6.15%1 | Undergrad & Graduate | |
 | 1.88% – 5.64%2 | Undergrad & Graduate | |
 | 1.88% – 5.64%3 | Undergrad & Graduate | |
 | 2.50% – 6.85%4 | Undergrad & Graduate | |
 | 2.25% – 6.39%5 | Undergrad & Graduate | |
 | 1.90% – 5.25%6 | Undergrad & Graduate | |
 | 1.89% – 5.90%7 | Undergrad & Graduate | |
 | 2.39% – 6.01% | Undergrad & Graduate | |
 | 2.13% – 5.25%8 | Undergrad & Graduate | |
| Check out the testimonials and our in-depth reviews! 1 Important Disclosures for Splash Financial. Splash Financial DisclosuresTerms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice. To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit. Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021. 2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest. Earnest DisclosuresInterest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.59% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions. Auto Pay Discount Disclosure You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. Student Loan Refinancing Loan Cost Examples These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product. Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America. © 2021 Earnest LLC. All rights reserved. 3 Important Disclosures for Navient. 4 Important Disclosures for CommonBond. CommonBond DisclosuresOffered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation. 5 Important Disclosures for SoFi. SoFi DisclosuresFixed rates from 2.74% APR to 6.74% APR (with autopay). Variable rates from 2.25% APR to 6.39% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 6 Important Disclosures for LendKey. LendKey DisclosuresRefinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution. Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810. As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay. 7 Important Disclosures for Laurel Road. Laurel Road DisclosuresAll credit products are subject to credit approval. Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com. As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount. Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate. Interest Rate: A simple annual rate that is applied to an unpaid balance. Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%. KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. This information is current as of April 29, 2021. Information and rates are subject to change without notice. 8 Important Disclosures for PenFed. PenFed DisclosuresAnnual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. |
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