How long does it take to pay off student loans?

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Nobody wants to hold onto student loan debt longer than they have to, so if you're a current or potential borrower, you're likely wondering how long does it take to pay off student loans? If a borrower can pay off their student debt sooner, the better. However, the repayment timeline can be either longer or shorter for everyone.

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According to the U.S. Department of Education, 10 years is the ideal timeline to pay off your student loan, but repayment terms can last anywhere from 10 to 30 years. There are still many factors involved in determining how long it will take to pay off your student loans.

The type of student loan repayment plan, interest rate, and loan amount all have an effect on how long it takes to pay off loans. Fortunately, there are ways to reach being debt free early, like choosing to make extra payments or making larger monthly payments. At any time, you can even pay off your loans in full.

How long does it take to pay off student loans?

Understanding your repayment options can help you find the best way to pay off student loans faster. Every repayment plan has its own benefits, as well as its own repayment terms. Federal student loan borrowers can expect the length of their loan term based on their specific plan:

  • Standard Repayment Plan. 10 years (within 10 to 30 years for Consolidation Loans)
  • Graduated Repayment Plan. 10 years (within 10 to 30 years for Consolidation Loans)
  • Extended Repayment Plan. Ensures you fully pay off loans within 25 years of fixed or graduated payments.
  • Income-Driven Repayment Plans. Depends on the borrower's discretionary income.

When you pay more than what is expected for minimum payments, you are on track towards paying off your student loans faster than the expected repayment terms.

Are student loans forgiven after 20 years?

The truth is that repayment takes a really, really long time. The average time for student borrowers to fully repay their loans is closer to 20 years, but repayment periods can last well beyond that. Luckily, student loan forgiveness programs will forgive student loan debt after the length of the loan term.

This applies mostly to federal student loans. Typically, federal student loans have more options for income-driven repayment plans than offered by private student loans.

With an income-driven repayment plan, borrowers can have any outstanding balance of their federal student loan debt forgiven if their loans are not fully paid off at the end of the repayment periods.

  • Pay As You Earn Repayment Plan (PAYE). 20 years of repayment.
  • Revised Pay As You Earn Repayment Plan (REPAYE). 20 years of repayment (within 25 years for any loans taken out by graduate students).
  • Income-Based Repayment Plan (IBR). 20 years of repayment if you’re a new borrower on or after July 1, 2014. 25 years if you’re not a new borrower on or after July 1, 2014.
  • Income-Contingent Repayment Plan (ICR). 25 years of repayment.
Are student loans forgiven after 20 years?

Be aware that under any income-driven repayment plan, you'll be paying more total interest over time compared to the Standard Repayment Plan. You may even have to pay income tax on any amount that is forgiven.

If you're working towards loan forgiveness under the Public Service Loan Forgiveness Program (PSLF), you may qualify within 10 years of repayment rather than the full 20 or 25 years under income-driven repayment plans. The Teacher Loan Forgiveness Program also offers forgiveness on up to 100% of student debt after only five years of teaching at an eligible school.

For private student loans, your options will vary according to the private lenders. Be sure to speak with your private lender to see about eligibility for repayment assistance programs or how to get your private loans forgiven.

Is it better to have savings or pay off student loans?

Over the course of your repayment term, you'll probably wonder whether the amount of your monthly payment would do better being invested or put into savings. You may find that student loan payments are holding you back from reaching your financial goals in life.

Among all existing borrowers, 5.8% is the average student loan interest rate. If your loans have an interest rate lower than this average, putting the extra money into savings or other high-interest expenses would be best.

Paying off high interest student loan debt should take priority. In contrast, loans with lower interest rates don't have to be your top priority, especially if you have any other outstanding debt with a high interest rate.

If you have high interest private loans, it is best to pay off the student debt. You'll find you can save money under student loan repayment plans by paying ahead of schedule on monthly payments or even making extra payments.

Since federal loans tend to have lower interest rates, federal student loan borrowers will pay less total interest and can better afford to put payments into savings rather than monthly payments.

What is the average amount of student loan debt?

In the United States alone, student loan debt has seen unforeseen highs, peaking upwards of $1.7 trillion in total.

Federal student loans make up 92.7% of this, accounting for $1.6 trillion in total student debt. The national total debt balance for private student loans exceeds $140 billion.

The average student loan debt is set at $32,880. Most borrowers who are bachelor's degree holders took out a federal student loan balance averaging $32,880 to attain their bachelor’s degree. The average student loan debt for private loans is set at about $37,787.

Frequently asked questions about paying off student loans

Are student loans forgiven after death?

While it can be a heavy subject to imagine, most borrowers aren't sure how death affects student loans. It really comes down to whether you have federal loans or private loans left unpaid upon an untimely death.

Federal student loan borrowers will have their student loan debt discharged after death. Parents who took out PLUS Loans may apply for a death discharge if the student for whom the parent received the loan dies. A "death discharge" can also be applied by a surviving student if both parents who took out PLUS Loans die.

Private student loans are a different story. Private lenders do not administer discharges for private student loan debt and will handle it the same way as other types of debt.

Although a person's student debt does not go away when they die, no one else is required to pay off the debts of someone who died. When someone dies, any unpaid debt is covered by their remaining assets, any money or property they left behind.

It is important to secure adequate life insurance coverage in the event of both financial and life crises during the repayment term.

What if I can never pay off my student loans?

To answer this question, it's important to understand what other repayment options are available to you. You generally want to avoid any delinquent payments, or your loans going into default. But it is not uncommon for many borrowers to find themselves struggling to keep up with monthly payments.

If you find yourself falling behind on payments at any point during the repayment term, contact your loan servicer immediately to look at your repayment options and see how you can still manage to pay off your student loan debt.