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If you attend a high-cost school or obtain multiple degrees, it’s possible to rack up $80K in student loans. While paying off such a large balance may feel insurmountable, federal loans offer multiple repayment and forgiveness options to help eliminate the balance.
For borrowers with private student loans for school, refinancing can secure better loan terms that could help you pay off debt faster.
How Much Is $80K in Student Loans?
The average student loan debt owed per borrower is $28,950, so $80K is a larger-than-average sum. However, paying off your balance is possible.
Since payments on an $80,000 balance can be high, extending the repayment term to lower monthly payments may be tempting. But consider that choosing a long-term loan gives interest more time to accrue and causes debt to linger longer.
Here’s how interest can add up for different loan terms on an $80,000 balance with a 6% rate.
| Balance | Repayment Term | Monthly Payment | Total Interest Paid |
|---|---|---|---|
$80,000 | 5 years | $1,546.62 | $12,797.45 |
$80,000 | 10 years | $888.16 | $26,579.68 |
$80,000 | 15 years | $675.09 | $41,515.38 |
$80,000 | 20 years | $573.14 | $57,554.76 |
8 Ways To Pay Off $80K in Student Loans
The best repayment strategy for $80,000 in student loans depends on factors like your career path, income, goals and financial situation. Here are several debt repayment tips that can help you create a payoff plan:
1. Choose the Best Repayment Plan for Your Budget
Federal loans offer many repayment plan options, with the 10-year repayment term generally being the quickest and cheapest route to debt elimination.
However, if payments under the standard plan are too high, getting on an extended, graduated or income-driven repayment (IDR) plan can make payments more manageable.
For example, the new Saving on a Valuable Education (SAVE) IDR plan sets payments based on discretionary income, and the government removes monthly interest your payment doesn’t cover.
You also don’t have to stay married to one federal loan plan forever; instead, you can update the plan periodically to align your payment with your financial situation.
Private student loans typically don’t offer the same payment flexibility, but if you want to adjust the terms of your loans, refinancing can be an option. We discuss more on how refinancing works below.
2. Make Extra Loan Payments
If you get a bonus, tax refund or unexpected surge in cash flow, put it toward your debt. Every small bit makes a dent, even if it’s just $50 or $100 per month.
Say you have $80,000 in debt and a 10-year term with a 6% interest rate. Paying an extra $100 per month can get rid of your debt a year faster and save you $3,783 in interest.
When you make extra payments, be sure to request payments to apply to the loan principal directly instead of fees or interest. That’s because attacking the principal can reduce your interest charges and speed up debt payoff.
3. Apply for Loan Forgiveness
The government offers several loan forgiveness options that can eliminate part or all of your balance if you meet requirements. Here are three popular forgiveness programs:
- Public Service Loan Forgiveness (PSLF). If you work for a nonprofit or government agency, the PSLF program forgives your remaining balance after you make 120 qualifying repayments. Getting on an IDR plan while pursuing PSLF is the best way to get the most value from this program.
- Teacher Loan Forgiveness. The government forgives up to $17,500 in loans for teachers who work for five consecutive academic years at a low-income school.
- IDR plan forgiveness. All borrowers can qualify for debt forgiveness after paying for 20 to 25 years on an IDR plan. The new SAVE plan takes that a step further by forgiving loans after 10 years if you borrowed less than $12,000.
You can also get loans discharged if you have a total and permanent disability, if your school closed while you were enrolled or if the school commits fraud.
4. Get Help From Your Employer or Professional Programs
Some employers and organizations offer loan repayment programs as an employee benefit or to encourage people to pursue certain career paths. Chegg, Google, Ally Financial and New York Life are examples of companies that help employees pay student loans.
The National Health Service Corps (NHSC) Loan Program is an example of a federal initiative that repays up to $100,000 in student loan debt for eligible medical professionals who work at approved locations for two to three years.
5. Refinance Student Loans
If you have good credit and a strong income, refinancing private student loans is one way to reduce your interest rate to save money while tackling debt.
For example, a drop in interest rate from 8% to 6% on a $80,000 loan with a 10-year term could save you a little over $80 per month and $9,894.81 in total interest.
You can also refinance federal loans, but doing so removes access to benefits like federal loan forgiveness and IDR plans. If there’s a chance you might need to rely on forgiveness or any other government perk, those benefits could outweigh refinancing savings.
6. Sign Up for Autopay
Using autopay can ensure you make on-time payments, which can strengthen your credit history. Another advantage of autopay is that you may qualify for an interest rate discount on federal and private student loans when you sign up.
7. Use Spare 529 Education Savings
If there are extra 529 plan savings in a family college fund, the account owner could add you as a beneficiary so you can reroute money toward student debt.
A unique feature of 529 education savings plans is that you can use up to $10,000 in savings per beneficiary for student loan repayment. This is a relatively new plan benefit added through the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.
8. Look for Opportunities to Increase Your Income
Increasing your income can supercharge debt repayment. If you can’t increase income at your day job, turning a hobby into a side hustle could help you make extra cash.
Other ways to bring in funds include having a garage sale, flipping used items for a profit, ridesharing, delivering groceries or freelancing through sites like Upwork or Fiverr.
How Long Will It Take To Pay Off $80K In Student Loans?
How long it will take to pay off $80,000 in student loan debt depends on your repayment plan and whether you make on-time payments.
The standard repayment term for both private and federal loans is 10 years. However, if you miss payments, that payoff timeframe can get longer.
Choosing the extended and IDR plans can stretch out federal loan terms to 20 to 25 years. Private loans may have alternative terms that range from five to 25 years.
What Happens If You Don’t Pay Student Loans?
If you don’t pay student loans, they could go into default. When federal loans go into default, the government could garnish your wages or take your tax refunds and Social Security benefits to pay your bill. Private lenders can also sue you for unpaid debt.
Since the government offers a wide range of flexible and low-cost repayment plans, it’s usually better to explore those options than to deal with the repercussions of nonpayment.
For private loans, contact your lender immediately if you have payment trouble. In some cases, you can negotiate payment arrangements or settlements.
What if you’re overwhelmed by debt? You don’t have to handle it alone. A student loan lawyer, credit counselor or financial advisor could help you explore debt management options and recommend the best way to tackle your $80K balance.
