4 Ways to Make Your Student Loans More Manageable

Katie Taylor Updated on May 3, 2019

Struggling each month to afford a high student loan payment can be pretty demoralizing. Having to put off big financial steps like buying a home or having a child because you can’t find room in your budget ... well, that's even worse.

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The student debt load in the United States is $1.53 trillion, which means there are millions of other borrowers just like you trying to figure out how to make their monthly student loan payments more manageable. 

Of course, knowing you’re not alone only helps so much. You need practical steps to reduce your monthly payments. Fortunately, you have options.

1. Refinance with a private lender

Borrowers who refinance their student loans save, on average, $137 to $323 per month and $24,000 over the life of the loan. 

How does it work? 

Refinancing your student loans is a bit like starting over. You apply for a new loan with a new lender, new interest rate, and new terms. That lender then pays off your old loans and sets a payment schedule with a lower interest rate than your previous loans. 

Deciding whether refinancing is right for you depends on your particular financial situation and goals. But if the interest rate on your current loans is greater than 4%, there’s a good chance you could save money by refinancing your student loans. You may even be able to pay off your loans more quickly.

2. Consolidate your student loans

When you consolidate your student loans, you bring together multiple loans into a single monthly payment, so instead of making several payments every month, you'll only make one.

However, you may also have the opportunity to extend your repayment term, which can result in a lower monthly payment. 

It’s important to note that whenever you spread your payments out over a longer period of time, you’ll end up paying more interest over the life of the loan. That may be an appropriate trade off for you, but make sure you consider the long-term impacts of your decision.

Also, know that consolidating federal loans with the government could actually result in a slightly higher interest rate if they round up when they average your current interest rates. 

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3. Switch to an income-driven payment plan

If you have federal loans, you may be eligible for an income-driven payment plan. 

These plans set your monthly payment amount based on your income rather than on the total amount of your loans. There are four options: income-based repayment, income-contingent repayment, pay as you earn (PAYE) repayment, and revised pay as you earn (REPAYE) repayment. 

Each plan has slightly different criteria and terms—for instance, some require proof of financial hardship whereas others are available regardless of income level. 

But they all have two important things in common: each caps your monthly payment at 10-20% of your discretionary income and each forgives any remaining loan balance at the end of the term, ranging from 20-25 years.

4. Take advantage of loan forgiveness

If you have federal loans and you work in a government or public service position—such as within a school system or in a nonprofit organization—you may be eligible for the Public Service Loan Forgiveness (PSLF) program. 

Under that program, your loans will be forgiven after 10 years of consistent payments. If you’re already making the minimum payments under an income-driven payment plan, PSLF won’t make your current payments any lower. But you’ll be able to rest easy knowing you can say goodbye to that debt in a decade or less. 

See how much you could save by refinancing your student loans. Check out our Student Loan Refinancing Calculator

Published in: Refinance, Student Loan Debt

About the Author
Katie Taylor

Katie Taylor is a content writer and editor with expertise in law and policy, finance, and entrepreneurship. She writes for startups and small businesses about everything from bookkeeping to telecom. Her work has been featured in The Washington Post and SheKnows.com. She is continuing to pay off law school loans and lives in Richmond, Vermont with her wife, son, and an unruly dog. Read more by Katie Taylor

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Splash Financial is a leader in student loan refinancing with new rates as low as 2.49% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.

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For every loan they fund, they contribute to the education of a child in need

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Visit CommonBond View Loan Disclosure

CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.

Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.

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  • Unemployment protections - If you lose your job or decide to go back to school, you can delay your payments for up to 24 months.
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SoFi is the leading student loan refinancing provider. 

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$30 billion+ in refinanced student loans. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, there's no maximum on the amount you can finance. Some state restrictions may apply.

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Ability to apply for cosigner release after 24 consecutive payments. 

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Give Your Life’s Journey a Jump-Start.

If you’re ready to put student loans in your rearview mirror, Nelnet Bank student loan refinancing offers low rates and flexible terms to help you start getting ahead.

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Works with 300+ community lenders for higher approval chances

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Visit LendKey View Loan Disclosure

Connecting student borrowers to a network of over 300 community lenders with low interest rates. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.

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Best for borrowers who want to customize their repayment schedule to pay off debt fast.

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College Ave Student Loans offers major help and minor stress. We’ll help guide you through the process to find the right loan term and interest rate for you and the family budget.

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Comments

I reduced my student loan payment by $152 per month, by refinancing thru Nitro:

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