Dealing with student loan debt can be overwhelming, especially if you’re buried under a significant amount. While paying off $200,000 or more in student loans takes time, implementing the right strategies can make your debt easier to manage.
Here are some tips to help you tackle $200k student loan debt — or even larger burdens.
9 tips for paying off $200k in student debt
- 1. Apply for loan forgiveness and repayment assistance programs
- 2. Research your repayment options
- 3. Pick a debt repayment strategy
- 4. Create (and stick to) a budget
- 5. Automate your student loan payments
- 6. Make extra payments
- 7. Consolidate federal student loans
- 8. Refinance private student loans
- 9. Increase your income
- Plus: Do student loans ever go away?
1. Apply for loan forgiveness and repayment assistance programs
Best for employees of government and nonprofit agencies or certain professionals willing to work in high-need areas
Student loan forgiveness programs can help pay off some or all of your federal student loan debt. For example, if you work 10 years for a qualifying nonprofit or government agency during repayment, you might be eligible for the Public Service Loan Forgiveness program.
Teachers can also apply to have up to $17,500 forgiven with the Teacher Loan Forgiveness program after completing five years at a qualifying school.
State-run loan repayment assistance programs are also available for certain professionals — lawyers, medical professionals, teachers and others — willing to work in high-need areas, with many offering significant awards after two or three years of service. (And unlike PSLF, many of these programs can help pay off private student loans.) Check with your state education authority for details.
Meanwhile, those searching for a new job can consider applying to companies willing to pay off your student loan debt.
2. Research your repayment options
Best for borrowers struggling with high federal student loan balances
Although federal student loans automatically come with the 10-year standard repayment plan, you can switch to another plan anytime. Extending your repayment term or applying for an income-driven repayment (IDR) plan can help if you struggle to make your monthly payment.
Compare your potential options below to find the best student loan repayment plan for you.
| Plan | Eligibility | Monthly payment | Repayment term |
|---|---|---|---|
| Standard | All federal student loans | Payments remain the same, spread out over 10 years | 10 years |
| Graduated | All federal student loans | Payments start low and increase every two years | 10 years |
| Extended | Borrowers with more than $30,000 in federal student loans | Either fixed (spread equally over the term) or graduated (increasing every two years) | Up to 25 years |
| Income-Based Repayment (IBR) | Most Direct and Direct PLUS loans Most Federal Family Education Loan (FFEL) and FFEL PLUS loans Perkins loans (if consolidated) | 10% of discretionary income for new borrowers (on or after July 1, 2014)* or 15% of discretionary income for older borrowers (before July 1, 2014)* | 20 years for new borrowers (on or after July 1, 2014) or 25 years for older borrowers (before July 1, 2014) |
| Pay As You Earn (PAYE) | Most Direct and Direct PLUS loans Most FFEL loans, FFEL PLUS loans and Perkins loans (if consolidated) | 10% of discretionary income* | 20 years |
| Revised Pay As You Earn (REPAYE) | Most Direct and Direct PLUS loans Most FFEL loans, FFEL PLUS loans and Perkins loans (if consolidated) | 10% of discretionary income | 20 years (undergraduate) or 25 years (graduate) |
| Income Contingent Repayment (ICR) | Most Direct and Direct PLUS loans Most FFEL loans, FFEL PLUS loans and Perkins loans (if consolidated) Federal student loans taken by parents (if consolidated) | 20% of discretionary income or The amount you would pay with a fixed payment over 12 years, adjusted to your income | 25 years |
*Monthly repayment amount can never be more than what you would pay with the 10-year standard repayment plan
As you can see, income-driven plans are adjusted by your income, with the remaining balance forgiven after 20 or 25 years. However, a longer term could result in more student loan interest charges over the life of your loan.
Note that you’ll need to recertify your IDR plan every year — otherwise you’ll automatically be switched back to the standard repayment plan.
Unfortunately, you can’t extend your repayment plan with private student loans unless you refinance (more on this below). However, some private lenders offer deferment if you run into financial hardship.
How common is $200k student loan debt?
A little over 45 million borrowers have federal student loan debt, with Americans owing a whopping $1.78 trillion in federal and private student loan debt.
According to StudentAid.gov, about 900,000 borrowers owed $200,000 or more in federal student loans, as of the second quarter of 2023. So if you carry a large student debt, rest assured you aren’t alone.
3. Pick a debt repayment strategy
Best for borrowers who want to be more intentional about their debt
If you feel overwhelmed by tackling a high amount of student loan debt, a strategic repayment strategy could help. Two popular options are the debt snowball method and the debt avalanche method.
- Debt snowball: Write down your debts from smallest to largest. While making minimum payments on all loans, throw extra money at the smallest debt until it disappears, then move on to the next one. The snowball approach helps keep you motivated for the long haul, allowing you to celebrate small wins along the way.
- Debt avalanche: For this approach, you’ll first tackle the loans with the highest interest rate with any extra payments you can muster. This method usually saves the most money, since you’re directly attacking your biggest sources of interest.
The debt repayment strategy you use is entirely up to you. The main goal is to be thoughtful about repaying your debt and keeping yourself on track.
4. Create (and stick to) a budget
Best for borrowers who want to stretch their income further
Designing a budget to pay off debt is a critical step in repaying a large amount of debt without losing your mind. You can use a budget-tracking app, a spreadsheet or even an old-fashioned notebook to track your monthly spending. Then review all expenses at the end of the month, seeing which areas you can trim.
Remember, every dollar makes a difference when you’re figuring out how to pay off student loans quickly. For example, switching phone providers to save $5 a month turns into $60 of savings a year. You can use these savings to help pay down your student loan debt.
5. Automate your student loan payments
Best for borrowers not worried about overdrafts
Setting up autopay for your student loans can help keep you on track to repay your debt, so long as you feel confident you’ll have enough in your account each month to cover the bill.
Even better, most lenders typically offer a rate discount for using autopay. Contact your student loan servicer to discuss your options.
6. Make extra payments
Best for borrowers with extra money or cash windfalls
Your monthly payment is likely high if you have $200,000 or more in student loans, making the idea of extra payments seem near impossible. However, paying extra might help get you out of debt significantly faster.
Example
Let’s say you have $200,000 in student loans at 6% interest on a 10-year repayment term. Your monthly payments would be $2,220. If you can manage an additional $200 a month, you could save a total of $7,796 while trimming a year off your repayment plan.
Consider putting any cash windfalls — like a tax return, inheritance, lottery winnings or birthday cash — toward your student loans.
In addition, you can change your automatic payments to include a little extra each month. Use our student loan payoff calculator to see how much you could save.
7. Consolidate federal student loans
Best for those with many different federal student loans to track
If you’re struggling to manage multiple federal student loans, a Direct Consolidation loan could help simplify repayment. When you consolidate, the government takes some or all of your federal loans (you can choose) and replaces it with a new, unified loan.
You can request a federal loan consolidation for free via the Department of Education, and you don’t even need to show your income or credit score. Your new interest rate will be the weighted average of your previous rates rounded up to the nearest one-eighth of a percent.
Repayment terms will be based on your loan balance, with terms going up to 30 years. Alternatively, you can apply for an income-driven repayment plan for your consolidated loans. While a longer term can lower your monthly payment, you’ll likely pay more interest over the loan’s life.
8. Refinance private student loans
Best for borrowers with high-interest student loans
If you have private student loans and want to restructure your debt, a student loan refinance could help. When you refinance, a private lender pays off your old debt and issues you a new loan, ideally with a lower interest rate.
Refinancing also allows you to pick a new repayment term, typically between five and 20 years. You must have solid income and a good to excellent credit score to qualify for the most competitive rates and terms. If your credentials aren’t up to par, consider applying with a creditworthy cosigner to unlock the best rates.
Although you can refinance federal student loans, it’s best to avoid doing so since you’ll lose government benefits, like access to income-driven repayment plans, student loan forgiveness programs and forbearance and deferment.
However, if you don’t need or qualify for such programs and you find a significantly lower interest rate, a federal student loan refinance could be worth it.
9. Increase your income
Best for borrowers with lower incomes
While sticking to a budget can help stretch your income, boosting your income can be an even better way to get ahead. You could find a higher-paying job, ask for a raise at your current one or start a side hustle, among other possibilities.
Then apply those extra earnings toward your student loan debt to achieve your debt-free lifestyle as quickly as possible.
Do student loans ever go away?
Unfortunately, apart from a few unique situations, the only way to escape your student loan debt is to repay the balance in full. Our tips above can help you create a solid game plan, allowing you to slowly (or quickly) chip away at your debt until it disappears.
Specifically, your federal student loan debt might be discharged if…
- You become totally and permanently disabled (or you pass away)
- Your school closes while you are still enrolled
- You file for bankruptcy
- You are eligible for student loan forgiveness (as discussed above)
