Last Updated on January 16, 2023
There are a lot of factors that go into determining how long it will take you to pay off your student loans. However, we’ve done some research and found that the average amount of time it takes to pay off student loans is between 12 and 15 years. That’s a long time! And if you’re looking at those numbers and thinking, “I’ll never be able to do that,” you’re not alone. But don’t worry—there are ways for you to speed up your repayment process in order to get out from under this debt as soon as possible.
Here are some tips on how to pay off your student loans faster:
1) Make extra payments: Even if you can only afford an extra $25 or $50 per month, it’s better than nothing! You’ll see results sooner than later because each payment counts towards reducing your principal balance (the amount of money you still owe).
2) Try refinancing: Refinancing allows borrowers with good credit scores to take out a new loan at lower interest rates and shorter terms than their original ones. Not only does this mean lower monthly payments for borrowers who refinance but also more money in
Average Time To Pay Off Student Loans
In a Nutshell
There are two types of student loans — federal student loans and private loans. The time it takes to repay your loans depends on the type of loan as well as the loan repayment plan you have. This article explains the average time it takes to pay off student loans and what options you have to refinance or get a loan deferment or forbearance. We’ll also offer tips for how to pay off your student loans more quickly and get out of debt.
Roughly one-third of all American students must take out at least some student loans to pay for college. As of September 2021, Americans owed almost $1.6 trillion in student loan debt. In 2020, the average borrower owed almost $40,000 in student loan debt.
Carrying a lot of loan debt is a stressful way to start your career. So it makes sense that when people take out student loans, the first thing they want to know is how much time it will take to pay them off. The answer depends on many factors, including the type of loan. This article explains the average time it takes to pay off student loans and what options you have to refinance or get a loan deferment or forbearance. We’ll also offer tips for how to pay off your student loans more quickly and get out of debt.
Timetable for Student Loan Repayment
There are two types of student loans — federal student loans and private loans. The time it takes to repay your loans depends on what types you have.
Federal Student Loan Repayment Timetable
The federal government funds and sets the loan terms for federal student loans. These loans are available to students who are enrolled in colleges or universities that participate in federal student financial aid programs. Unlike privately funded loans, federal loans have fixed interest rates, income-based repayment options, loan forgiveness plans, and deferment options. Finally, most federal loan borrowers aren’t subject to credit checks.
To apply for a federal student loan, you must submit a Free Application for Federal Student
Aid (FAFSA). Submitting a FAFSA is often the first step for students applying to college or graduate school.
It generally takes 10 to 30 years to repay federal student loans. The exact timeline depends mostly on the loan type and repayment term. Students who graduate (and those who quit school) with federal student loan debt are automatically enrolled in the Standard Repayment Plan, which has a 10-year repayment term. You can change your repayment plan if you need to. While the Standard Repayment Plan is a 10-year term, most borrowers take much longer to repay the debt.
Private Student Loan Repayment Timetable
Private student loans are loans you take out with a private lender. Private lenders have their own repayment options. Private student loans tend to carry higher interest rates than federal loans, and the rates aren’t fixed like federal loans. Also, your credit history matters when applying for a private student loan. If you have excellent credit, it’s possible to get a better interest rate with a private loan than with a federal loan. Unlike federal student loan programs, private student loans don’t offer loan forgiveness programs.
Unless you refinance your debt along the way, you can expect to repay a private student loan in five to 20 years.
Available Federal Student Loan Repayment Plans
Federal student loans offer three repayment plans that aren’t income-driven:
- The Standard Repayment Plan has a 10-year term and a fixed monthly payment amount. If you have a Direct Consolidation loan, the term may be from 10-30 years.
- The Graduated Repayment Plan has a 10-year repayment term (or 10-30 years if you have a Direct Consolidation Loan). Unlike the Standard Repayment Plan, monthly payments in the Graduated Planstart out low and gradually increase over time, usually every two years. This can be an advantage if you’re not making much money right after you graduate, but you plan to make more as you build your career.
- The Extended Repayment Plan has a 25-year term and your payments may be fixed or graduated.
Income-Driven Repayment Plans
Depending on the loan type, you can also apply for one of the five types of income-driven repayment plans:
- Revised Pay As You Earn Repayment Plan (REPAYE Plan): Pay 10% of your discretionary income for 20 years for borrowers with undergraduate loans and 25 years for borrowers with graduate student school loans.
- Pay As You Earn Repayment Plan (PAYE Plan): Pay 10% of your discretionary income for 20 years.
- Income-Based Repayment Plan (IBR Plan): Pay 10% of your discretionary income for 20 years if you’re a new borrower (on or after July 1, 2014) or 15% of your discretionary income for 25 years if you’re not a new borrower.
- Income-Contingent Repayment Plan (ICR Plan): Pay 20% of your discretionary income for 25 years or what you would pay on a 12-year repayment plan adjusted to your income.
- Income-Sensitive Repayment Plan (ISR Plan): Make payments on Federal Family Education Loans (FFEL) Loans based on your income over 10 years.
