Pay Your Loans Fast with The Best Student Loan Repayment Plans

This post will provide you with ways to help with dealing with massive student loan debt by choosing the right student loan repayment plans.

This post will provide you with ways to help with dealing with massive student loan debt by choosing the right student loan repayment plans.

Everyone knows that they should be paying down student loan debt as fast as possible.

If it were only that easy. While there are some ways to get free money and ways to stop paying your loans, you need to buckle down and figure out your options.

Some of the most common questions I get from my readers about student loans are, “Do I qualify for a discounted payment plan or loan forgiveness?” And, “Am I on the right payment plan?”

Student loans are a massive economic burden for millennials that graduate from college every day. According to one study by Pew Research Center, 1 in 4 American adults have student loan debt. Those who have bachelor’s degrees owe a median of $25,000 dollars. Many college graduates and parents are worried about paying off student loan debt, especially if other payments are taken into consideration. However, there is room for hope for many in the form of student loan forgiveness programs.

These are specialized programs that are offered by government agencies to help reduce the burden of student loan debt college graduates face each year. The eligibility requirements for student loan forgiveness vary depending on the program. Another benefit to forgiveness programs is that most programs will suspend the deadline for you to pay your loan while they review your application. In this article, we will show you how to apply for student loans, whether someone qualifies for student loans, and what to watch out for when applying.

How to Apply & Eligibility

Student Loan forgiveness programs are often accessed at the federal level. You can contact a loan servicer that can help you with eligibility and billing for student loan forgiveness programs. From here, you can talk to your loan servicer on what options you have when applying for forgiveness programs.

Certain programs will only offer forgiveness for certain types of loans for example, teacher loan forgiveness programs only offer student loan forgiveness if your loans are either direct loans or federal family education loans (FFEL). Some, but not all, types of forgiveness programs will offer you loan forgiveness for Perkins Loans so please read the program description carefully.

What Types of Student Loan Forgiveness Programs are Out There?

There are a variety of student loan programs offered by both federal and state governments. Most of these programs are based on occupations such as work for government, teaching, or military for example. Others include forgiveness programs based on income such as the Federal Income-Based Repayment program or the Pay as You Earn Program.

These loan forgiveness programs are especially helpful when you have bills that total up to more than 10% of your discretionary income. Other student loan programs are sponsored by state governments such as the Maryland SmartBuy Home Buyer Assistance & Forgiveness Program or the Janet L. Hoffman Loan Assistance Repayment Program.

Standard Payment Plans

If you took out:

Or almost any other loan out there, you were probably automatically enrolled in a standard payment plan as soon as your grace period ended.

These loans are paid back over 10 years and will typically be the option that offers you to get out of debt the fastest but have the highest payment.

This may not always be your best option though.

How You Can Lower Your Student Loan Payments

Income-driven plans, or plans that make it easier for federal student loan borrowers to pay back loans if your debt is high compared to your income, were designed for those facing financial hardship upon graduation (which pretty much describes nearly all graduates these days).

Instead of simply calculating the payment period over three years, the government will calculate your payment based on a percentage of your income.

With an income-driven plan, it could take a while longer to pay down your debt (if you only pay the minimum monthly payment), but it can significantly lower your monthly payment if you have a high balance.

Plus, on some payment plans, when the interest owed exceeds the monthly payment, the government with cover the shortfall for three years or more.

Income-Driven Plans

You might be thinking, “I can afford to pay the standard payment. Why should I consider an income-driven plan?”

Good question!

Everybody knows that you should pay down the loan with the highest interest rate first.

What you may not know is that using an income-driven repayment plan can still have benefits even if you can afford the standard payment plan, since an income-driven plan lowers your monthly payment across all of your loans.

“Won’t I pay the same amount of interest either way?” you might be asking yourself.

Not necessarily.

Because your required payment is lowered, you now have more cash free to pay down your higher interest loan. This is especially meaningful if you have large differences in your interest rates.


Let's look at an example of someone with $100,000 of student loans spread equally at 8.75%, and 4% and the differences an income-driven plan can make.

In this case, we are going to assume the borrower is eligible for Revised Pay AS You Earn (REPAYE) which caps payments at 10% of income.

 PlanStandard PaymentREPAYEAmount Saved
Monthly Payment$1,150$266 
Additional Payment$884 
Payback Period10 Years9 Years1 Year
Interest Paid$38,000$23,251$14,749

Using REPAYE and paying $884 per month to the higher interest loan allowed this borrower to save almost $15,000 in interest payments!

This could go a long way toward a down payment on a house or even buy a nice car!

While Income-Driven Plans aren’t for everyone, I hope you can see the benefits and the flexibility that they can create for many borrowers.

Please see the table below for more details and specifics on the three most commonly used plans.

As always, be sure to contact a financial planner about which one is right for you.

The Three Types of Income-driven Student Loan Repayment Plans

What is it?Pay as You Earn –


Limits payments to the lower of 10% of borrower's income or the standard payment plan.

Income-Based Repayment –


Limits payments to the lower of 15% of borrower's income or the standard payment plan.

Revised Pay as You Earn –


Limits payments to 15% of borrower's (family if married filing joint) income.

Interest AdjustmentThe government pays the first three years of interest on subsidized loans in excess of monthly paymentThe government pays the first three years of interest on subsidized loans in excess of monthly paymentGovernment Covers First Three Years of Interest on subsidized loans not covered by payment and 50% of interest not covered thereafter.
Taxable ForgivenessTaxable Loan Forgiveness After 20 YearsTaxable Loan Forgiveness After 25 YearsTaxable Loan Forgiveness After 25 Years
PSLF ForgivenessQualifies after 10 YearsQualifies after 10 YearsQualifies after 10 Years
Qualifying Loans   
Federal Direct Loans
Perkins Loans*XXX
Parent Plus Loans*XXX
Private LoansXXX

*Can be eligible if consolidated into a Federal Direct Consolidation Loan

Are Student Loans a Problem?

This year, the total student loan debt was 1.56 trillion dollars across the total number of U.S borrowers with student loan debt of 44.2 million. That comes out to an average of 34,389.14 each student has in student loan debt!

The value of the American dollar, according to the current dollar index, has increased from 89 in September of 2009 to 101.46 in December of 2019, which shouldn't be seen as having any effect of increasing debt.

While some of these issues seem blatant on paper, to the average student they can be nearly invisible until dramatically revealed. This isn’t helped by the fact that little is explained to students beforehand.

Lack of Information

Student debt can be increased by layers of hidden costs. Often, if a student asks about these costs, they will be denied detailed information. When information is revealed there may be questionable charges. Sometimes – for instance – students are charged for parking when they don’t own or operate a vehicle. Personally, this sounds borderline unethical as it appears to be charging for services not rendered.

I feel it is not the colleges themselves that are the root of this problem that is growing at a much more rapid pace than people realize. However, private for-profit colleges may be the exception to this opinion as they are designed to be profitable. The system itself and the boards that continue to utilize and encourage such systems desperately need to be broken down and restructured for the benefit of American education.


If you are thinking about the best repayment plans you should also consider other options out there for you such as refinancing student loans.

When you are managing student loan debt, a lender that as your back is SoFi

SoFi is a social lending company that provides rates as low as 1.9% variable with auto pay and 3.5% fixed with auto pay.

You can save thousands simply by refinancing your student loan interest rates. They can offer lower rates than the rest because they analyze you based on merit, quality of employment, and education besides just a credit score and financials.

There are zero origination and prepayment fees. Offer terms are from 5, 10, 15, 20 years in both fixed and variable. Both private student loans and public student loans can be refinanced. Besides low rates, one of their best features is their unemployment benefits.

If you lose your job while repaying your loans, you don’t have to pay your loan for up to 12 months while you look for a new job! Interest will still accrue, but having this cash flow break is a huge benefit. They also provide job assistance guidance as well.

Compare the best lenders to refinance student loans like SoFi, Earnest, Laurel Road, Commonbond, or LendKey below:

  • 4.5
  • APR from: 5.24%
    • Easy online application
    • 0.25% APR discount with autopay
    • No hard credit pull required
  • 4.0
  • APR from: 5.19% (with autopay)
    • Customized loan terms
    • Instant interest rate estimate
    • Incomplete degrees are accepted*
  • 5.0
  • APR from: 5.24% (with autopay)
    • No hidden fees
    • 0.25% rate discount with AutoPay
    • Graduate, Parent PLUS, private loans
APR from: 5.24%
  • Easy online application
  • 0.25% APR discount with autopay
  • No hard credit pull required
APR from: 5.19% (with autopay)
  • Customized loan terms
  • Instant interest rate estimate
  • Incomplete degrees are accepted*
APR from: 5.24% (with autopay)
  • No hidden fees
  • 0.25% rate discount with AutoPay
  • Graduate, Parent PLUS, private loans

Have you considered any other student loan repayment plans that we haven't covered here? Let us know in the comments below!

Brian Meiggs
Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of Smarts, a personal finance site helping you easily explore your best money options. He helps readers follow the smart money in order to increase their earning potential and start building wealth for the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Business Insider, Yahoo! Finance, NASDAQ, Discover, and more.
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