How Long Does It Take to Pay Off Student Loans?

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How Long Does It Take to Pay Off Student Loans?

Obtaining an education and obtaining a college diploma is not easy; students are supposed to bear the burden of loan repayment throughout their lives. It has been estimated that nearly a million students take as much as 20 years to pay off their student loans. A federal student loan can last up to 10 years. Students are automatically enrolled in the Standard Repayment Plan once they complete their graduation course.

It can take up to 25 years for students who have taken out private loans to repay their student debt. This depends on the type of plan they have chosen while applying to the lender. It was noted that students would have to pay exorbitant amounts and high-interest rates if they wished to end their debt more quickly. A lower interest rate means the loan will take an equal amount of time to finish. 

1. Students Can Be Impacted with These Factors While Paying Off Their Loan

Putting a pause clause

There will be unforeseen circumstances such as unemployment, health issues, joining the armed forces, or financial burdens that can make repayment of loans difficult. During such situations, students can enrol themselves under a deferment or forbearance program, thus leading to push in the final due date. This also means that the total interest paid for the lifetime of the loan will increase with the unpaid interest rate.

Replacing with a new loan

Sometimes students deal with this situation by refinancing themselves with a new loan. This means they will pay off their current loan with a new amount that guarantees financial settlement. But this also means that they now have a new amount with double the interest to be paid. It also means they have to pay a higher repayment amount to get it over in the short term. Thus pushing the debt further into their plans.

Pushing the payment schedule

Getting a negative credit score is not feasible for the student even after graduation. Payments to finish off the loan can be made thrice a week as opposed to once a week or on a monthly basis. If the payment schedule is missed or done irregularly, then there is a higher risk of late fees, which will become an added burden on the financial scale.

2. Some of the Federal Student Loan Repayment Plans Are

  • Standard Repayment Plan: Students need to pay a fixed monthly amount for 10 years. For a direct consolidation Loan it can take up to 30 years.
  • Graduated Repayment Plan: If students chose this option for loan repayment then the payments start out on a low basis. This amount gradually increases over a period of two years with the entire loan being completed within a period of 10 years.
  • Extended Repayment Plan: Students who chose this option have to pay a fixed or graduated payments with a 25-year term.

3. Income-Driven Plans That Students Can Apply for to Repay Their Student Loan

Re-Pay as You Earn Repayment Plan (REPAYE Plan): Students will have to give access to their overall salary with a 10 per cent of discretionary income for 20 to 25 years to pay off undergraduate or graduate school loans.

Pay as You Earn Repayment Plan (PAYE Plan): With this option, the students can choose to pay 10 per cent of their discretionary income for 20 years.

Income-Based Repayment Plan (IBR Plan): Students will have to give access to their 10 per cent of discretionary income for 20 years in case they borrow a new amount (on or after July 1, 2014) or provide 15 per cent of their discretionary income for 25 years in case of an old borrower.

Income-Contingent Repayment Plan (ICR Plan): Students will have to give access to their 20 per cent of discretionary income for 25 years.

Income-Sensitive Repayment Plan (ISR Plan): Students will have to make periodic payments on FFEL loans for a period of 10 years with their salary packages.

4. When Do You Start Paying Back Student Loans?

Students who have acquired federal loan facilities must begin the repayment procedure within six months of leaving school. In case they leave school or even drop out, they have to maintain this period of loan repayment. Students who are facing financial burdens can apply for another method to repay, apply for deferment or forbearance with the federal authorities. Private lenders grant a six-month grace period to borrowers with a possible twelve-month extension. Some private lenders offer abstention programs depending on the student’s requirements. It is always recommended that students contact their respective lenders to record the deadline of the first payment.


The easiest way to pay off the debt is by being regular on the payment due dates. With a budget and a good financial plan, students can pay back their loans within ten years.

About the author

Indu has been educator since last 10 years. She can find all kind of scholarship opportunities in the USA and beyond. She also teach college courses online to help students become better. She is one of the very rare scholarship administrator and her work is amazing.

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