How Much Are Student Loan Payments?

Before you decide to take out that new loan to pay for college, there are many things you'll need to consider. Currently, there are roughly 42.8 million student loan borrowers in the United States alone, with the average student loan borrower taking out $32,880 to receive their bachelor's degree.

By taking on student loan debt, you'll be adding new credit to your credit portfolio with a student loan balance that you'll have to pay off in monthly payments over time. The amount you pay for monthly payments is mainly based on several factors: principal balance, interest rate, and income.

When factoring these into every student's unique financial situation, it is difficult to give an exact amount for how much your student loan payments would be since the amount differs for everyone. However, it is possible to calculate your monthly payment amount if you have the needed information.

Student borrowers can plug their student loan information into a free student loan calculator to get an accurate estimate of how much their monthly payments should be.

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What is the average student loan payment?

The average student loan debt for undergraduate students totals around $32,880 per borrower to graduate with an undergraduate degree. Most repayment plans aim to pay off student loans completely within 10 to 20 years. Based on this information, we can determine the average student loan payment.

According to the latest report from the U.S. Federal Reserve, the average student loan payment in 2019 was between $200 and $299, with an average interest rate of 5.8%. (Although private student loans can sometimes have higher student loan interest rates than federal ones.)

For Income-Driven Repayment plans in 2022, the mean starting salary among all new graduates was $55,800. The monthly payment for this type of plan is 10% of the mean starting salary, which is $465.

Among adults with student loan debt from their education, 12% were behind on their payments in 2021. According to the U.S. Federal Reserve survey in 2022, in the Fall of 2019, 17% of borrowers were behind on their payments.

How much are monthly payments by repayment plan?

Your monthly payment mostly depends on the interest rates and the principal loan amount being paid off. The type of repayment plan you choose is another factor that can change the student loan payment amount. Understanding your repayment options and how they affect your student loan payment is essential for maintaining a balanced financial life.

Since repayment options can differ on whether you have federal student loans or private student loans, the monthly payment for each will be affected differently. For more information on how the amount for your monthly payment is determined, check out our blog on how a monthly payment is calculated.

Federal loans

If you have a federal student loan, you can choose from different repayment options, whichever is best for your financial situation. We have listed the monthly payment conditions for each repayment plan below so you can determine how much you would personally pay under each plan.

Some student loan repayment plans you're interested in may not be eligible for the types of federal loans you have. For example, be sure to know whether your federal loans are direct subsidized/unsubsidized loans, federal Stafford Loans, Direct PLUS Loans, or Consolidation Loans.

You can get a more detailed outline of your federal student loan repayment term using Federal Student Aid’s Loan Simulator. Afterwards, contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan. However, monthly payment on federal loans has recently been put on hold.

In response to the COVID-19 pandemic, payments and interest accrual were paused for all government-held federal student loans since March 2020. The Biden-Harris administration has since extended this period until June 30, 2023.

If the legal challenges to Biden’s loan cancellation program are not resolved by then, student loan payments and interest will remain paused through the end of August 2023. Until then, student borrowers can enjoy this reprieve a while longer.

Standard Repayment plan

Payments are calculated to a fixed amount that ensures your loans are paid off within ten years (within 10 to 30 years for Consolidation Loans).

Graduated Repayment plan

Graduated payments are lower at first and then gradually increase, usually every two years. The amount you start with and the rate at which the monthly payments increase are calculated to ensure your loans are paid off within ten years. (within 10 to 30 years for Consolidation Loans.)

Extended Repayment Plan

Since this type of repayment plan has a longer repayment term, borrowers who have more than a $30,000 balance in Direct loans will be eligible for much lower monthly payments but will pay more money in total interest.

Payments may be fixed or graduated, ensuring your loans are paid off within 25 years. Speak with your loan servicer to see whether your monthly payment amount will increase gradually.

Pay As You Earn Repayment Plan (PAYE)

Your monthly payments will be 10 percent of discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan. You must have a high debt relative to your income, with payments recalculated each year and based on your updated income and family size. You must update your income and family size each year, even if they haven’t changed.

Revised Pay As You Earn Repayment Plan (REPAYE)

Your monthly payments will be 10 percent of discretionary income, with payments recalculated each year and are based on your updated income and family size. You must update your income and family size each year, even if they haven’t changed.

If you're married, both your and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions).

Note that any remaining balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).

Income-Based Repayment Plan (IBR)

Your monthly payments will be either 10% or 15% of the borrower’s discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan.

This plan is specifically designed for borrowers whose student loan debt is extremely high relative to their income. If you have trouble paying the fixed monthly payment calculated in the Standard Repayment Plan, consider changing your payment plan to this one.

Payments are recalculated each year and are based on your updated income and family size. You must update your income and family size each year, even if they haven’t changed. If you're married, your spouse's income or loan debt will be considered if you file a joint tax return.

Note that any outstanding balance on your loan will be forgiven if you haven't repaid your loan in full after 20 years or 25 years, depending on when you received your first loan. You may have to pay income tax on any amount that is forgiven.

Income-Contingent Repayment Plan (ICR)

Your monthly payment will be the lesser of 20 percent of discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.

Payments are recalculated each year based on your updated income, family size, and the total amount of your Direct Loans. You must update your income and family size each year, even if they haven’t changed. If you're married, your spouse's income or loan debt will be considered if you file a joint tax return or choose to repay your Direct Loans jointly with your spouse.

Any outstanding balance will be forgiven if you haven't repaid your loan in full after 25 years.

Income-Sensitive Repayment Plan

Your monthly payment is based on your annual income, but your loan will be paid in full within a 15-year repayment term. You'll pay more over time than under the 10-year Standard Plan, and the formula for determining the monthly payment amount can vary from lender to lender.

Private loans

Private loans may have a higher interest rate or longer loan term compared to federal student loans. As a result, private student loan lenders may use their own formula to calculate the monthly payment on a private student loan.

To get a better idea of exact amounts, try inputting your loan balances into a student loan calculator. You'll need to input the following student loan information into the calculator:

• Total loan amount
• Interest rate (if you have multiple loans, put the average of all your interest rates)
• The repayment term — the expected or preferred length of time you’ll be paying
• Any extra amount you can contribute each month beyond the minimum

How long does it take to pay off $100K in student loans?

Many student loan borrowers have racked up extensive student loan debt; medical school debt or law school debt can easily reach up to $100k in student loans, so it's a likely scenario to consider.

Let's say you have $100k worth of student loan debt by the time you graduate. In this case, higher monthly payments would realistically keep you on track to pay all of it back within a 15 to 20-year repayment term.

Although you'll save money on interest, it can be difficult to keep up with high monthly payments regularly. While some student loan borrowers are able to pay off their student loans faster than others, others may have to sacrifice their other financial goals for the time being. If you end up missing a monthly payment, it may be best to request a lower monthly payment.

Keep in mind that the lower your monthly payment amount is, the longer your repayment term will be and the more money you'll pay overall due to interest. You can always calculate monthly payments by using a free student loan calculator. If you want to have a student loan balance of $100k, the repayment term will depend on your financial situation after graduating.

Do student loans go away after seven years?

Unfortunately, the remaining loan balance doesn’t magically disappear after seven years. In fact, the average repayment term lasts longer than seven years.

However, with defaulted student loans, the big credit bureaus remove the default status and late payments from your report seven years after the first missed payment. Most borrowers will see a jump in their credit scores the following month after their student loans fall off their report.

Additionally, you can see automatic forgiveness on your federal student loans after 20 or 25 years under certain repayment plans, as this blog covers.

Frequently asked questions about student loan payments

What happens if you don't make monthly payments?

Falling behind on monthly payments can negatively impact a borrower's credit score. Missing out on payments during the repayment term will reflect on your next credit check. These late payments stay on your report until seven years after the first missed payment.

Let's say you haven't made a monthly payment in a long time. In this scenario, interest will continue to accrue from your interest rate. If you miss too many monthly loan payments in a row, your student loans will go into default.

If you ever find yourself falling behind on monthly student loan payments, contact your loan servicer immediately about your options for getting back on track. For more resources on how to stay on track with student loan payments, check out our detailed guide on creating a budget for college.

It is worth noting that all federal loan payments and interest accrual were paused since March 2020 in response to the COVID-19 pandemic. The Biden-Harris administration has since extended this period until June 30, 2023, and student loan payments and interest will remain paused through the end of August 2023. Until then, student borrowers can enjoy this reprieve for a while longer with no consequence for missing a monthly payment.

To get a better idea of how missing your monthly payment can affect your loan balance, read our blog on what happens if you don't pay student loans.

At what age can I stop paying student loan payments?

While it's possible to have your outstanding student loan balance forgiven for a number of reasons, monthly payment exemption is not given based on a borrower's age.

The reality is that your repayment period may likely follow you into retirement if the total debt is not paid off beforehand. To truly retire student loan debt free, student loan borrowers should review their repayment options and contact their loan servicer to ensure they are on track.

Do student loans get forgiven after 25 years?

While it is unlikely to get the same benefits with private student loans, federal student aid has many repayment options that come with loan forgiveness programs, like the Public Service Loan Forgiveness Program.

After at least 20 years of student loan payments under an Income-Driven Repayment Plan, you can see automatic forgiveness on your undergraduate student loans. For graduate students, your student loan debt can be completely forgiven after 25 years.

More recently, the Biden-Harris administration has been pushing to pass a Student Debt Relief Plan that will forgive up to $10,000 in federal loan debt from eligible borrowers' student loan balance. Learn more about how to qualify for Biden's one-time, student loan forgiveness program with our detailed guide of important dates.

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