The average student loan borrower graduates with $37,000 in debt in 2026. At standard 10-year repayment with a 5.5% interest rate, that translates to monthly payments of $401 and $11,120 in total interest. But with the right strategy, you can significantly reduce both the timeline and total cost.
Federal Student Loan Repayment Plans
SAVE Plan (Current IDR Option)
The SAVE Plan caps payments at 5% of discretionary income for undergraduate loans and 10% for graduate loans. Any remaining balance is forgiven after 20 years for undergraduate and 25 years for graduate borrowers. For borrowers earning under $32,800, payments could be $0. This is the most generous income-driven repayment plan ever offered.
Standard Repayment (10 Years)
The default plan with fixed monthly payments over 10 years. This minimizes total interest paid but requires the highest monthly payments. Best for borrowers who can comfortably afford the payments and want to be debt-free fastest.
Graduated Repayment
Payments start low and increase every two years over a 10-year term. Designed for borrowers expecting salary growth, though total interest paid exceeds the standard plan.
Student Loan Refinancing
Private refinancing can lower your interest rate significantly, especially if your credit score and income have improved since borrowing. Current refinance rates range from 4.5-8.5% depending on creditworthiness. Refinancing $37,000 from 6.8% to 4.5% saves approximately $5,200 in interest over a 10-year term.
However, refinancing federal loans into private loans forfeits access to income-driven repayment, forgiveness programs, and federal protections. Only refinance federal loans if you’re certain you won’t need these benefits.
Top refinancing lenders include SoFi (no fees, career coaching included), Earnest (flexible payment options), and Splash Financial (comparison shopping across multiple lenders).
Loan Forgiveness Programs
Public Service Loan Forgiveness (PSLF)
Government and nonprofit employees can receive complete loan forgiveness after 120 qualifying monthly payments (10 years) under an income-driven repayment plan. Ensure you’re on an eligible plan and submit the PSLF Employment Certification Form annually to track progress.
Teacher Loan Forgiveness
Teachers in low-income schools can receive up to $17,500 in loan forgiveness after 5 consecutive years of service. STEM and special education teachers qualify for the maximum amount.
Strategies to Pay Off Loans Faster
Making biweekly payments instead of monthly results in one extra full payment per year, reducing a 10-year repayment to approximately 9 years. Directing any raises, bonuses, or tax refunds to extra principal payments can shave years off your timeline. Even $100 extra per month on a $37,000 loan at 5.5% cuts the repayment period from 10 to 7.5 years and saves $3,400 in interest.