Average Monthly Payment On Student Loans

Last Updated on December 15, 2022

It’s not an easy time to be a student.

In fact, it’s probably one of the hardest times in your life. You’re only just starting to figure out how to get by on your own, but you’ve got all of this debt hanging over your head.

And it’s not just about the money—although that’s certainly a big part of it. It’s also about the stress of having to take on so much responsibility at such a young age and trying to figure out what kind of future you want while still being expected to perform well in school without having had any experience with adult life yet.

But let’s talk about the money for a minute: The average monthly payment for student loans is $351 per month, which is more than half of what most people make after taxes each month! That means that no matter how much you make, if you’re paying back student loans (and we all are), then half of that money is going straight into someone else’s pocket instead of yours.

How much are average monthly student loan payments? 

Reports from the Federal Reserve from 2019 to 2020 reported the average monthly student loan payment at between $200 and $299 per month among those with outstanding student loan balances. 

According to a report from the Federal Reserve, 30% of all adults have taken on at least one educational loan. While some of those borrowers have since paid back their debt, millions of Americans still owe money. In fact, the median outstanding student loan balance among those who still owe educational debt was between $20,000 and $24,999. 

Many people had their loans deferred from 2020 to 2021, with close to three in 10 adults who still owed money for their education paying $0 per month due to CARES Act provisions pausing federal student loan payments, but expect those average payments to be back to at least pre-CARES Act levels when those provisions expire at the end of 2021.

Will you owe more or less than the average student loan payment?

Knowing the average college loan payment is interesting, but it’s not as important as knowing how much you will personally have to pay for your student debt. 

A number of factors affect the amount of your payment and whether your personal financial obligations will be more or less than the average student loan payment. Here are some of the key considerations that determine what you’ll owe each month on your school loans. 

The amount borrowed

The higher your loan balance, the more your monthly payments will be. 

Aim to reduce the amount you borrow by taking advantage of scholarships and grants that you do not have to pay back. And don’t borrow for anything other than necessities, as you don’t want to end up with a higher payment because you borrowed for spring break or buying an expensive car while in college. 

The types of loans you have

Federal student loans offer a wide variety of payment options, including a standard repayment plan as well as income-driven plans that cap payments as a percentage of income. If you want the most flexibility in the amount of your monthly student loan payment, focus on exhausting eligibility for federal loans before taking on other kinds of educational debt.

Private student loans don’t offer as much flexibility as federal loans once you’ve borrowed since you’re committing to your repayment plan for the duration of the time you have your loan. But when you are choosing a lender, you have a wide variety of different repayment timelines you can choose from, such as loans with five-year, seven year, or 10-year terms. 

Your repayment timeline

Whether you have federal loans or private loans, a longer loan repayment timeline results in lower monthly payments but higher total loan costs over time. That’s because making more payments allows each one to be lower. But making payments over a longer period means that you will pay interest for a longer time, which raises your total costs. 

Your interest rate

A loan with a higher loan interest rate will be more expensive to repay since interest is the cost of borrowing.

Most federal student loans have low fixed interest rates. Rates on private student loans vary by lender and based on financial factors such as your income and credit score. 

How can you find out how much your student loan payment will be? 

To see how much your student loan payment will be and how it compares to the average monthly student loan payments, there are a few different tools you can use. 

If you have federal student loans, the best way to determine your monthly payment is to use the Department of Education’s Loan Simulator. This allows you to see how much your payment will be based on the amount that you borrow as well as the repayment plan that you choose.

If you have private student loans, there are a number of online loan repayment calculators that you can use to estimate your payment amount based on loan rate, payoff time, and years left of school. 

If you already have taken out your student loans, signing into your online account with your loan servicer can also help you to see exactly what your monthly payments are — and whether you have any options to make changes to that monthly amount by switching your payment plan.  

How to lower your average college loan payment

If you’re hoping for monthly payments that are below average student loan payments, there are a few techniques you can use to reduce the amount you’ll owe each month. 

Borrower only what you need

Keeping borrowing to a minimum will allow you to graduate with a lower loan balance and thus a lower monthly payment. 

Shop around to get the best interest rate 

If you are taking out private student loans, shop around with different lenders before you borrow. Compare rates and loan terms, such as payoff timelines, to decide on a loan that is most affordable for you. 

Choose your payoff plan carefully 

Income-driven or extended repayment plans are options for federal student loans that can lower your monthly payments. They may increase the interest paid overtime, though. 

With private student loans, you’ll want to think carefully upfront about whether you’d prefer a longer or shorter payoff time, as this decision needs to be made before you borrow so you can apply for the desired loan. 

Consider refinancing your student loan debt

Private student loan lenders offer refinance loans, which can sometimes reduce your monthly cost below the average student loan payment. You can refinance federal or private loans, but converting federal to private loans would mean giving up loan forgiveness options and other important borrower benefits.

Refinancing your private loans makes sense if you can qualify for a new loan at a lower interest rate than you are paying on your current debt. You can use the new loan at the lower rate to pay off your old loans that were more expensive. Depending on the repayment timeline on your new loan, you may lower your monthly payment, lower your total interest costs, or both. 

How to Pay Off $100,000+ in Student Loans

Use a tactic that saves money (forgiveness), lowers payments (income-driven repayment) or does both (refinancing).

Six-figure student debt isn’t the norm. So when you’re facing a student loan balance of $100,000 or more, the standard, 10-year federal repayment plan may not be right for you.

Standard monthly payments will likely exceed $1,000 with that much debt. But you could save money in interest, decrease monthly payments or do both — even pay off your student debt faster — with a different repayment approach.

The best strategy is usually the one that costs the least overall, provided you can afford the monthly payments. Here are options for paying off $100,000+ in student loans, and how to decide which is right for you.

Pursue student loan forgiveness

Best for: Borrowers in low-earning public service careers.

Students with advanced degrees are often highly indebted. Specific loan forgiveness programs are in place for many of these professionals — including nurses, teachers, dentists, lawyers and doctors.

Public Service Loan Forgiveness cuts across all jobs. It forgives borrowers’ remaining federal student loan balance tax-free if they work for the government or a 501(c)(3) nonprofit while making 10 years’ worth of monthly payments.

PSLF is designed to encourage workers to pursue relatively low-paying jobs. But if your income is high enough, PSLF won’t help you.

To get PSLF, you must make at least some qualifying payments on an income-driven repayment plan, and those payments must be lower than what you would pay on the standard, 10-year plan. Otherwise, you’ll have paid off the debt by the time you’re eligible for forgiveness.

Refinance student loans

Best for: Borrowers who have a high income or anticipate one.

The higher your student loan balance, the more you can save by refinancing.

With $200,000 in student debt averaging a 7% interest rate, for example, you’d save $200 a month and more than $24,000 total by refinancing to a 5% rate — assuming you had 10 years remaining before refinancing and maintained the same repayment schedule.

If your income is relatively low but you expect it to increase substantially, make payments on an income-driven repayment plan until you can qualify for a lower rate. Once you refinance federal loans, they’re no longer eligible for income-driven repayment.

To qualify for refinancing, you typically need good credit and enough income to cover your expenses, other debts and full student loan payments.

» MORE: Best student loan refinance companies

How much can refinancing save?

Ride out income-driven repayment

Best for: Borrowers who can’t afford payments, or who will pay the least overall under this option.

Making payments on a federal income-driven repayment (IDR) plan won’t make you debt-free fast. But if you’re strapped for cash, switching to one of the government’s four income-driven repayment plans will make payments more manageable.

Payments could be as low as $0, depending on your income. They’re often not large enough to cover all of the interest as it accrues, meaning your balance could increase.

Income-driven plans also extend your repayment schedule to 20 or 25 years, but forgive any balance remaining at the end of that period. Those amounts are taxed, though, creating a so-called “student loan forgiveness tax bomb.”

Forgiveness isn’t certain. You could pay off your balance early, especially if your income increases.

But if you stick it out to the end of your repayment term, income-driven repayment may be the least expensive option — even with the additional taxes. That will likely only be the case if your income stays low or your debt is in the high six figures.

Monthly payments on $100,000+ student loan debt

Here’s how monthly payments would initially stack up for different six-figure loan amounts. The income-driven payments are set at 10% of discretionary income for someone earning $100,000 with a family size of one.

Loan balanceStandard paymentRefinanced paymentIncome-driven payment
$100,000$1,161$1,060$677
$200,000$2,322$2,121$677
$300,000$3,483$3,182$677
$400,000$4,644$4,243$677
$500,000$5,805$5,303$677
Assumptions: The standard monthly payment interest rate is 7%; the refinanced interest rate is 5% interest rate.

And here’s how much you would repay overall under each option:

Loan balanceStandard paymentRefinanced paymentIncome-driven repayment
$100,000$139,330$127,279$181,825
$200,000$278,660$254,557$367,240
$300,000$417,990$381,836$425,179
$400,000$557,321$509,114$481,429
$500,000$696,650$636,394$537,679
Assumptions: Standard and refinanced loan term, 10 years; IDR term 25 years. IDR totals account for forgiven amounts at a tax rate of 30%, and payments assume annual income increases of 3%.

In this example, qualifying for Public Service Loan Forgiveness would mean repaying $93,486 overall — no matter the amount borrowed.

Do the math to compare refinancing vs. income-driven repayment for your own situation. The government’s Loan Simulator details federal options, while a student loan refinance calculator can let you estimate potential refi savings.

Average student debt by type

Debt typeAverage debt
Bachelor’s degree debt$28,950
Graduate school loan debt$71,000
Parent PLUS loan debt$28,778
Law school debt$145,500
MBA student debt$66,300
Medical school debt$201,490
Dental school debt$292,169
Pharmacy school loan debt$179,514
Nursing school student debt$19,928: Associate Degree Nursing (ADN) $23,711: Bachelor of Science in Nursing (BSN)$47,321: Master of Science in Nursing (MSN)
Veterinary school debt$183,302

About the author

The Editorial Team at Infolearners.com is dedicated to providing the best information on learning. From attaining a certificate in marketing to earning an MBA, we have all you need. If you feel lost, reach out to an admission officer.
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