How to Lower Your Student Loan Payments
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By Kristen Kuchar

January 20, 2020

Student loan borrowers pay an average of almost $400 per month to repay their debt. Depending on how much you borrowed to pay for college, that number could be in the thousands for the 2.5 million borrowers with a six-figure debt. Whether you are struggling to make payments or simply want to free up money for other financial goals, these are ways you can lower your monthly student loan payment.

Income-Driven Repayment Plans

If you have federal loans, you can apply for one of four Income-Driven Repayment Plans. Your monthly minimum payment will be a percentage of your income (and also based on your family size). If your income is low enough, your monthly payment could even be $0. After 20 or 25 years of making payments (depending on the plan and when you borrowed), your loans are forgiven. (The loan forgiveness is taxable under current law.) Defaulted loans are not eligible for income-driven repayment plans.

Learn more about each plan:

Borrowers of Federal Parent PLUS loans are not eligible for income-driven repayment plans, except for ICR if they include the Parent PLUS loans in a Federal Direct Consolidation Loan.

Other Alternative Repayment Plans

 If you don’t qualify for an income-driven repayment plan, you can still consider alternatives to the standard repayment plan for your federal student loans, including:

  • Graduated Repayment Plan: A Graduated Repayment Plan starts out low and increases every two years. This is ideal for the typical graduate with federal student loans who anticipates their salary to increase over time.
  • Extended Repayment Plan: The Extended Repayment Plan lowers your monthly payment because it uses a longer repayment term, up to 30 years.

 Deferment or Forbearance

 Both a deferment and a forbearance can temporarily postpone payments for a period of time. Depending on your loan, it may still accrue interest during this time.

These are the various types of deferments:

  • Unemployment Deferment
  • Economic Hardship Deferment
  • Military Service and Post-Active Duty Student Deferment
  • Rehabilitation Training Program Deferment
  • Graduate Fellowship Deferment
  • In-School Deferment
  • Active Cancer Treatment Deferment
  • Parent PLUS Borrower Deferment

Some private loan lenders also offer a deferment under certain situations. For example: 

  • SoFi offers deferment options for borrowers undergoing rehabilitation for a disability or who are active duty in the military. SoFi also offers an option for temporary forbearance if you lose your job. 
  • LendKey offers an option for forbearance during an economic hardship, available for up to six months at a time, no more than 18 months total.
  • Earnest offers deferment options if you’re serving in the Peace Corps or on active duty in the U.S. Armed Forces. Earnest also offers forbearance if you lose your job, get an income reduction, take parental leave or you are experiencing high medical bills. Earnest also allows you to skip one payment every year, upon request.

If you have private loans, call your lender to see what options they offer. 


Refinancing a private student loan could potentially lower your interest rate, saving you money overall. This may also result in a lower monthly payment. It could make repayment easier by streamlining multiple student loans into one monthly payment. (Some lenders couple a lower interest rate with a shorter repayment term, in which case your monthly loan payment could increase.)

When you refinance your student loans, you are borrowing a new loan with a new interest rate. Shop around for the best rate. Consider asking a responsible cosigner for an increased chance at a better rate.

While you can refinance your federal student loans into a private student loan, keep in mind you’ll lose the federal perks that go along with it. These include the potential for student loan forgiveness, deferments and income-driven repayment options.

Get Repayment Assistance 

From your employer: Many employers are offering student loan repayment assistance to their employees. Find a job that offers this to lower your monthly payments. You could also talk to your current employer about the likelihood of this being offered in the future.

From a city or state: In hopes to bring college graduates to a particular area, there are cities and states that will help pay your loans when moving there.


For more inspiration, check out 70 ways to pay student loans faster. Sign up for our free student loan newsletter. And don’t forget to follow us on FacebookInstagram and Twitter.

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