A lot of college graduates get stressed about how long it’s going to take to pay back their student loans — and it’s not hard to see why. It’s possible for a repayment plan to last decades. In a nightmare scenario, it could even last into the start of your retirement.
Bearing that in mind, you’re probably asking yourself: “how long will it take to pay off my student loan?”
This guide will walk you through all the basics of student loan payment plans, repayment terms, and how to calculate the monthly payments on your student loan.
How Long Will it Take to Pay Off My Student Loan?
The amount of time it takes to pay back a student loan in full depends on the type of loan, the amount borrowed, the interest rate and the repayment plan the borrower selects, as well as the use of deferments and forbearances. Another factor is how much extra a borrower can pay each month.
That being said, most loan holders typically take no more than 16–19 years to pay back their federal student loans.
Translation: you shouldn’t have to worry about making student loan payments after you’ve retired from the world of work. But every borrower is different, so how long it takes you to repay your loan may be different than how long it takes your roommate.
Want to get a better idea of what your monthly payment is going to look like? Use our student loan calculator to figure the monthly loan payment and total payments on your student loans.
Student loans are either federal student loans or private student loans. Both loan types have different interest rates and repayment options.
Let’s dive into each loan type and how their repayment plans work.
Repaying Federal Student Loans
A federal student loan is a financial aid program backed by the US Government. There are several types of federal student loans, including both subsidized and unsubsidized loans.
With a subsidized loan, the government pays interest on your behalf while your loans are in deferment, either an in-school deferment, economic hardship deferment, or unemployment deferment.
With an unsubsidized loan, interest is not subsidized, so it will continue to accrue.
Repayment plans for federal student loans are divided into two main categories: traditional repayment plans (including Standard, Graduated, and Extended) and four different income-driven repayment plans, which are based on your household income and family size.
What is a traditional student loan repayment plan?
Traditional repayment plans are based on the loan’s principal balance. Your principal balance is just the amount of money that you borrowed to fund your education.
Traditional repayment options don’t factor in things like your personal income or family size when working out how much you will be paying on a monthly basis.
Both traditional and income-driven repayment plans come with their own set of pros and cons — including different repayment terms.
Traditional repayment plans include:
Standard repayment plans
A standard repayment plan gives borrowers up to 10 years to repay their student loan.
With a standard repayment plan, the exact monthly payment amount that will vary depending on the total loan amount you borrowed. Each payment will be a minimum of $50.
As a good rule of thumb, the monthly payment you should expect to be giving back to your lender will be about 1% of the loan balance at repayment.
Under the graduated repayment plan, borrowers have up to 30 years to repay their federal student loans, depending on the amount borrowed.
Monthly payments will start just above interest-only payments and increase every two years.
The extended repayment plan gives borrowers up to 30 years to repay their loans in full, depending on the amount owed.
Payments under this plan are generally lower than they would be under Graduated or Standard repayment.
This table breaks down those repayment terms.
Less than $7,500
$7,500 to $9,999
$10,000 to $19,999
$20,000 to $39,999
$40,000 to $59,999
$60,000 or more
A similar set of repayment terms apply to graduated repayment.
What are income-driven repayment plans?
The other type of federal student loan repayment option is an income-driven repayment plan.
Income-driven repayment plans base the monthly loan payments on the borrower’s income and family size. This is different from how a traditional repayment plan calculates your repayment term, which is normally just based on the amount you owe. Defaulted loans are not eligible for repayment under these plans.
There are four different income-driven repayment plans, including:
Income-Contingent Repayment (ICR)
After 25 years (which should equate to 300 payments), the remaining debt that you owe is forgiven.
Want to learn more? Check out our income-contingent repayment calculator.
Income-Based Repayment (IBR)
With income-based repayment (IBR) plans, monthly payments are based on 15 percent of the borrower’s discretionary income.
This is defined as the amount by which the borrower’s income exceeds 150 percent of the poverty line. Monthly payments are capped at the standard 10-year payment amount.
After 25 years (or 300 payments), the remaining student debt outstanding will then be forgiven.
Check out our income-based repayment calculator to estimate your monthly payment.
Pay-As-You-Earn Repayment (PAYE)
Pay-as-you-earn (PAYE) repayment plans calculate monthly payments based on 10 percent of the borrower’s discretionary income.
In the case of PAYE, discretionary income is defined as the amount by which the borrower’s income exceeds 150 percent of the poverty line. Monthly payments are capped at the standard 10-year payment amount.
After 20 years (which should equate to 240 payments), the remaining debt is forgiven. This differs from IBR and ICR loan forgiveness, which normally kicks in after 30 years.
If you want to learn more about PAYE repayment terms, check out our Pay-As-You-Earn Calculator.
Revised Pay-As-You-Earn Repayment (REPAYE)
With revised pay-as-you-earn (REPAYE) repayment plans, monthly payments are based on 10 percent of the borrower’s discretionary income.
Debt forgiveness on REPAYE loans works differently depending on whether you’ve taken out a loan to fund undergraduate study or postgraduate (masters) study.
If you’ve taken out an undergraduate student loan, a REPAYE payment plan allows for debt forgiveness after 20 years (which should equate to 240 payments). If you’re a graduate student taking out a loan for a masters, the remaining student debt is forgiven after 25 years (or 300 payments).
Want to get an idea of what your REPAYE payments would look like? Check out our Revised Pay-As-You-Earn Calculator.
Repaying Private Student Loans
Unlike federal student loans, private student loans don’t have a set repayment plan. Lenders aren’t bound by the same subsidy rules, so they’re allowed to offer different amounts to borrowers based on different terms.
Because private loans aren’t as standardized, that also means repayment periods for private student loans vary a whole lot more than federal student loans.
It’s common for private student loan holders to offer 10-year repayment terms. That being said, some lenders offer repayment terms as short as five years and as long as 25 years.
Private student loan borrowers should go through their loan terms and talk to their loan servicer to make sure that they know the repayment terms.
How Long Does Repayment Take in Reality?
While repayment plan terms offer some insight into the amount of time it takes to pay off student loans, repayment in practice can take a different course.
Here are some actions that can decrease (or increase) the amount of time it takes to repay a student loan in full.
Making Extra Payments
Some borrowers can afford to make extra payments on their student loans. Not everybody is that lucky, but if you can afford to make extra payments, it’s something you might want to think about.
Why? Consistent extra payments will reduce the time it takes to pay off the debt and lower the total repayment amount.
For example, let’s say you’re a borrower who owes $30,000 at 6% fixed interest rate with a 10-year repayment term. The monthly payment is about $333 and the total payments are $39,967. But if you as the borrower makes an extra payment of $50 every month, the total payments drop to $38,263 and the loan will be paid off in 8.3 years.
That would mean you’d be able to shed your student debt more than a year-and-a-half early.
The ChangEd app could help you pay extra on your student loans. The app links to your student loans – both federal and private – and puts extra money towards your student loan balance. It rounds up your purchases, and applies that “spare change” to your student loan. Read our full review to learn how it works.
Want to see how making extra payments could impact on your student debt? Use our student loan prepayment calculator to see how much extra payments can reduce your overall loan term over time.
Deferments and Forbearances
Student loan deferments and forbearances allow borrowers to temporarily stop making payments on their student loans.
For many federal loans, you can apply for an Unemployment Deferment if you are looking for and unable to find full-time work. The Economic Hardship Deferment is for many federal borrowers who are working full-time but are still experiencing an economic hardship.
For private student loans, options for forbearances vary.
The amount of interest owed continues to accrue on unsubsidized loans and all private loans during a deferment and on all loans during a forbearance. It will then be capitalized by adding it to the loan balance if it isn’t paid as it accrues. So while it could be a temporary relief, deferments and forbearances add to the amount of time it takes to repay the debt and will often increase the total amount you are paying towards that debt.
Consolidating Your Student Loans
Consolidating federal student loans allows borrowers to combine multiple federal student loans into one. This means making a single monthly loan payment on all of your student debt instead of multiple payments.
While this can streamline the repayment process, it also can reset the clock to zero, since you’re signing up for a new loan with its own new term. That means that consolidation will generally increase the amount of time you’ve got to spend paying back your loans. If you are working towards student loan forgiveness, either with Public Service Loan Forgiveness or forgiveness offered by income-driven repayment plans, consolidating will reset the clock starting you at day one of repayment.
Student loan refinancing is relatively common, especially with high-interest private loans. Refinancing a student loan can lower monthly payments on student debt, but lower payments inevitably mean it’s going to take longer to repay the loan in full.
For example, let’s say that you’re refinancing a loan with an initial 10-year payment period. If you opt for lower monthly payments, refinancing could result in 30 years of repayment rather than the original 10 years.
It’s important to remember that anytime you refinance a federal loan into a private loan, you’re going to lose all federal benefits including income-driven repayment plans, generous deferment options, any subsidized loans you may have had, and the potential for loan forgiveness.
If you refinance, how long it will take you to repay your loan depends on the new payment term you’ve chosen. A shorter term means less time to repay your loan, larger monthly payments, but you’ll end up paying less in interest overall. A longer payment term means it will take you longer to repay, you may have smaller monthly payments, but you will end up paying more interest overall on your loan.
Delinquency and Default
A student loan is considered delinquent after the borrower has made one late payment or missed a payment. The student loan will then go into default after a continued period of delinquency, but this period varies depending on the type of loan you’ve taken out.
The default period is typically 120 days or delinquency for private student loans and 360 days for federal student loans.
It also goes without saying that missed payments will add to the timeline for repayment. But a longer repayment term isn’t going to be the only result of making late payments.
For example, your lender might also charge you additional fees, and may report your late payment to a credit bureau. That means it could end up hurting your credit score.
According to an analysis of government data by Mark Kantrowitz, Publisher and VP of Research of Savingforcollege.com, the average time in repayment for federal student loans is up to 16–19 years.
This is generally going to depend on whether the maximum repayment term is weighted by the number of borrowers or the amount of the loans.