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Student Loans: Your Options for Paying it Back


November 1, 2021 ( Newswire) According to, accessing higher education can be remarkably costly. As such, many students are faced with the burden of student loan debts, which they could potentially have to bear for more than ten years. It is vital to determine the best alternatives carefully to discover how to quickly repay your student loan. Highlighted below are some approaches to assist in clearing the path to financial freedom:

Benefits and Drawbacks of Federal Student Loan


  • Typically, student loans are fixed rate
  • No credit check required
  • While you are attending school, the government can assist with paying the interest
  • More repayment options are available


  • Some students are ineligible
  • The loan must be paid back, and the lending amount has a cap

Options for Lower Interest Rate

If you are planning on quickly resolving the loans to amass as little interest as possible, your best bet is possibly the standard repayment option. On a positive note, you will be entered into this plan automatically when you start repaying the loan.

This option typically involves structured payments that are expected to be made during a 10-year period. There will be 120 payments during the lifespan of the plan; however, each payment is a fixed amount.

The plan is useful if you would prefer the steadiness of an established payment schedule and you want to pay the smallest amount possible. There is a drawback since the payments might be high as your total loan amount will be divided evenly by 120 to arrive at the amount that will be required each month. Additionally, the plan is not the best choice if you have interest in Public Service Loan Forgiveness.

PAYE or Pay as You Earn

This category establishes a payment cap that stipulates that 10 percent of your money is left over after essential expenses. It also provides you with an option to have your loan forgiven after twenty years of repaying it. It is an ideal option for those who are married with double incomes or individuals who do not anticipate their income changing significantly over time. It is particularly beneficial for those with graduate school loans.

Graduated Repayment

The graduated repayment plan is beneficial in that it provided you with a chance to use your education to ultimately earn more money. The plan provides lower monthly payments at the start of the policy and increases gradually over time.

Lower Options for Loan Payment

If your financial situation cannot handle the monthly payment required by the standard plan, a range of flexible repayment options are there to decrease the amount for FISL or federally insured student loans. Note that this means the life of the repayment of the loan will be prolonged. Some of these plans may only be available to individuals with particular types of loans.

ICR or Income Contingent Repayment

If you cannot afford the monthly fees for the standard student loan repayment, but you are able to handle in excess of the other choices in this category, this strategy may be ideal for you. With this plan, the monthly payments require 20 percent of non-essential income or you have the option of paying a fixed rate over a twelve-year period rather than the standard ten-year plan. Individuals who are married and are in a higher tax threshold may not be able to access this plan.

Income-Based Repayment Plan

If your debt is high in relation to your income, you could consider an income-based plan. The plan is ideal for those who do not expect their income to improve, are married and those who are not eligible for PAYE. The plan requires payments of 10 percent of non-essential income and is another good alternative for individuals interested in obtaining loan forgiveness.

Emergency Contingency Plan

Regardless of the plan you pick, the possibility is always there that you could run into problems making a payment. If this happens, an option is there to access a payday loan. This enables you to get a microloan against your salary to assist you in meeting a payment deadline. The loan amount along with an interest fee will be withdrawn for your next paycheck. This can assist you in a pinch; however, if not used irresponsibly, it could create more problems.

Student Loan Forgiveness

Normally, income-based plans are the only ones qualified for student loan forgiveness. This is because the standard repayment system leads to the loan being totally paid off prior to it becoming eligible for loan forgiveness. This federal program is known as Public Service Loan Forgiveness. Those eligible include certain non-profit and government employees. If the eligible makes most of their payments by the minimum time period for the loan forgiveness, the rest of the loan can be eliminated tax-free.

Refinancing Benefits

If you have stable finances and a minimum credit score of six hundred, it could be possible to refinance your student loan. Benefits of this include:

  • Refinancing will cost you nothing
  • Repaying your loan more quickly results in lower interest, which will ultimately save you money
  • You will be able to access a lower monthly payment, making it easier to control your finances
  • Applying for a mortgage will be easier as the debt-to-income ratio will be higher

According to, it is important to shop around for lenders to determine the lender that will provide the best rate, if you choose to pursue this option.

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