Factors Affecting Time to Pay Off Student Debt

Repayment Plan
A major determinant of how long it takes to pay off student loans is the type of payment plan you choose. For federal student loans, repayment options start at 10 years and can be as long as 30 years. For private student loans, repayment terms vary depending on the lender’s policies and offerings.

Loan Amounts
How much student loan debt you have can also impact how long it takes you to get out of debt, depending on how much you can afford. After all, if you carry higher loan amounts with higher monthly payments, you will have less spending money. If you are on a tight budget, you may not be able to make extra payments to pay off your loan sooner.

Interest Rates
Interest rates also increase the total cost of your loan and the amount of your monthly payments. So a loan with a higher interest rate can take you longer to pay off, depending on your income and budget.

In recent years, interest rates have been on the rise for student loans. For federal student loans disbursed on or after July 1, 2023, and before July 1, 2024, the rates were:

Direct Subsidized Loans and Direct Unsubsidized Loans: 5.50%
Direct Unsubsidized Loans: 7.05%
Direct PLUS Loans: 8.05%

If you have a high income, you are more likely to have more spending money in your budget that can allow you to make extra payments toward your loan. Paying more toward your principal than the minimum amount will reduce both the amount of total interest you owe and the total time it takes to repay a loan.

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