There are Only Two Ways to Pay Back Your Student Loans

If you're like many young adults, you may be feeling overwhelmed with your student loans. The best way to put yourselfat ease and provide some piece of mind is by establishing a plan for how to get rid of your student loan balance. Just having the plan in place is often enough to proved the relief that you're seeking when thinking about student loans.

So what are your options? There are really only two options when it comes to paying down your student loan balance; aggressive repayment, or student loan forgiveness. Which is best for you greatly depends on your individual situation.

If you're the perfectly average adult, with $35,000 in student loan debt and an income around $50,000 or $60,000 per year, then you will likely save the most money by paying down your loans as aggressively as possible. That is, paying above and beyond your regular payment as much as possible, and potentially even consolidating your loans with a company like Earnest, Sofi, or Laurel Road. When looking at consolidation, you need to consider the amount that you'll save over the life of the loan, and take into account any loan acquisition costs and fees as well. For the vast majority of people, aggressively paying down your loans will save the most money.

What if you're not the typical person with a moderate amount of student loans and an above average income? Do you have $80,000 in student loans and an income of $60,000 per year. Or $100,000 in debt? $200,000? Or even $300,000? Then what? That's where things get interesting. If your loans are higher than your annual income, and you don't expect any significant pay raises in the near future, then it would be worth your time to look into student loan forgiveness through income-driven repayment. The fastest way to have your student loans forgiven is to make 120 qualified payments (10 years), while working full-time for the government, or a non-for-profit (under Section 501(c)(3) of the Internal Revenue Code), or a non-for-profit company who provides "qualifying public services."

If you do not work for one of these organizations, and don't plan to for at least 10 years in the near future, like me, you can still pursue student loan forgiveness. The income-driven repayment plans all have their own student loan forgiveness built in as well. Which is right for you is entirely dependent on your specific situation. My personal favorite plan is PAYE, and that's what I'm currently in.

Income-Driven Repayment Periods

Using the chart above, you can calculate your own income based repayments using the various calculators on, or studentloanhero. These are my favorite student loan repayment calculators.

I like, because they automatically include all of your federal student loans, which makes it easy to see exactly what to expect with the different repayment options. The biggest downside of this calculator is that they assume that your income will increase by 5% every year. Since I've been employed, my income has never increased more than 2.5% per year, and many of my colleagues incomes increase at a rate under 1% per year, so assuming a 5% increase has drastically different income estimates after 10 or 20 years.

This is where I like to use studentloanhero. Their repayment calculators are great, because they let you adjust your annual income growth, and give you a more accurate picture of what some of the income-driven repayment options might actually look like for you.

And it's as simple as that. In under an hour, you can work through some of these calculators, plug in your income and expected income, and see how they will impact your payments in order to determine which payment plan is right for you. Whether you choose to pay down your loans aggressively, or stretch out your payments and pursue student loan forgiveness, you can feel at ease knowing that you will be able to manage your student loan payments in their entirety. Good luck, and as always, feel free to comment below.