How to Pay Off Student Loans (and Still Have a Life)

When it comes to your finances, do you take a head-on or head-in-the-sand approach? If you identify with the latter, the good news is you’re not alone. The bad news? You’re not alone. New data suggests that when it comes to managing money, women are not as independent as you’d expect. In fact, 91% of women in heterosexual couples are not participating in financial decisions. But we want to change that statistic. To help you become a master of your own finances, we’re debuting a new series called The Paper Files, where we uncover tricks and tips that will help you manage your money and your future. Ready to take it head-on?


Adulting is not always easy. While getting your first grown-up set of furniture and moving in with your S.O. are exciting parts of becoming an adult, there are other aspects of becoming “responsible” that are a lot tougher to swallow. From getting your own health insurance post-26 to learning about what a 401(k) actually is (and why you should be contributing to it), there are a ton of eye-opening things that happen when you start learning more about how to handle your finances.

For people with student loan debt, creating a monthly budget that allows you to both live comfortably and chip away at what’s owed can be incredibly daunting. Luckily, there are many tools available for those who aren’t totally sure how to create a plan that works for them. Ahead, find our step-by-step guide to conquering your student loan debt, with advice straight from experts who seriously know their stuff.

Step 1 Figure Out Exactly How Much You Owe

Before you can do anything else, you need to take stock of your loans. Surprisingly, this is something that people sometimes forget to do. “Often, graduating students lose track of how much was borrowed and how much is owed, and to whom,” explains Anita Thomas, senior vice president at “For all federal student loan debt, you can go to the National Student Loan Data System, which is a database maintained by the government.”

NSLDS doesn’t have private student loan information, though, so if you also have private loans, Thomas recommends pulling a copy of your credit report using one of the many credit reporting services available. Once you’re armed with the full picture, you’re better equipped to get a handle on the next steps.

Step 2 Outline Your Overall Goals

Having debt can be overwhelming, but that doesn’t mean you should put your life on hold just because you owe money from going to school. “Think about the big picture and your long-term goals, not just your monthly student loan payment, recommends Stephen Dash, founder, and CEO of Credible. When you’re creating your monthly budget, consider what you want to do in the next few years besides pay off your debt. “Do you want to go back to graduate school? Start a business? Buy a home? In the short term, your student loan payments may make those dreams more difficult to achieve, but you shouldn’t have to give up on them altogether,” says Dash.

Step 3 Understand Interest Rates

Just like any loan, student loans come with interest rates, and this is an area with complexities that Dash says a lot of people have a hard time understanding. “One of the most difficult things to grasp is the impact that the interest rate you’re paying and the time you take to pay off your loans has on your overall repayment costs,” he says. “Borrowers often lose sight of those factors if they are preoccupied with their monthly payment. It’s a good idea to use a student loan repayment calculator to compare different repayment strategies and plans.”

Credible has a calculator that can be used if you’re thinking about refinancing your loans at lower interest rates, and Dash says that the Department of Education’s repayment estimator is a good tool for evaluating government repayment plans. While refinancing for a lower interest rate is becoming more popular, Dash notes that it’s important to remember that if you refinance federal student loans with a private lender, you lose access to benefits like income-scaled repayment and the potential to qualify for loan forgiveness after 10, 20, or 25 years. Regardless of whether you decide to stick with your current interest rates or try to refinance, it’s important to map out how long it will take you to pay off your loans at your current rates.

Step 4 Be a Woman With a Plan

Now that you’re armed with the information you need, it’s time to create a plan and a budget. But which loans should you pay off first, and how aggressively should you be paying them down? “If you graduated with student loans from multiple sources, we recommend tackling the private ones first,” says Kelly Lannan, director of women and young investors in college at Fidelity Investments. “They typically have higher interest rates than government-issued loans.”

Also, even though it may seem daunting, Lannan urges you to not freak out about your student loan repayment. “With more than 40 million Americans struggling to take control of their student debt, it’s important to know that once you have a plan in place, you’ll likely be able to get it under control and lower the burden of the loan,” she says. While some people might be able to come up with a monthly budget that satisfies their loan payments all on their own, there are other resources available if you need them. “Consider reaching out to the financial counselor at the college you went to. Even if you graduated 10 years ago, they’re still there to help their alumni,” she says. “You can also look to trusted sources online to help you decide if a federal repayment program, private refinancing, or a combination of strategies is best for your situation.”

Step 5 Create and Stick to a Timeline

So how long is this thing going to take, exactly? Well, that depends. “Your timeline for paying your student loan debt depends on three things: your income, how much you owe, and the interest rate you are paying on that debt,” says Dash. If you can afford to make more than the minimum payment on your loans, you can pay them off faster. “As a general rule of thumb, the standard government repayment plan is 10 years. So if you’re able to pay off your loans faster, you’re doing well,” he says. “Some borrowers with above-average debt and below-average earnings may need more time. But if you have federal student loans, you should not have to make more than 20 or 25 years of payments before qualifying for loan forgiveness in an income-driven repayment plan.”

Step 6 Don’t Let Student Debt Take Over Your Life

If, after working out all the details, you suddenly feel like you need to start spending all of your money on repaying your student loans, don’t. “The biggest misconception about student loans is that they should be your top financial priority,” says Ryder Taff, CFA, CIPM, a portfolio manager at New Perspectives. “That is not true at all. If you had $5000 in cash and used that to pay your student loans early, you would still be broke and in a lot of trouble if an emergency came along. Set aside emergency funds, retirement funds, and even a vacation fund. Make the minimum payments, and make sure you are taking full advantage of the features of your loan. They do not have to consume your financial life.”

In other words, get all the information, make a plan, stick to it, and don’t spend any more time than you really need to worry about what you owe.

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