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How to pay off student loan debt that’s higher than your salary

Picking the right repayment plan is key to managing such a high debt load.

When your student loan balance is higher than what you get paid in a year, you might need to rethink how you approach repayments. Instead of focusing on getting out of debt faster, it might make more sense to take steps to lower your monthly repayments or qualify for forgiveness.

4 steps to pay off a high student debt load

Follow these steps to stay on top of repayments and avoid paying more than necessary when your debt is higher than your salary.

Step 1: Crunch the numbers.

Add up your monthly expenses and subtract that from your monthly income. This is how much you can afford to pay each month on your student loans — though try to leave some wiggle room for unexpected costs. You can use this as a basis for choosing a repayment plan.

If you don’t have the patience or are bad with numbers, a budgeting app can crunch the numbers for you.

Step 2: Review your repayment and forgiveness options.

You might need to switch repayment plans if you’re struggling to pay back your loans each month. But even if you aren’t, consider reviewing your options to make sure yours is a good fit. Take note of the different plans and keep them in mind when you’re checking your eligibility for forgiveness programs — some might require you to be on a specific repayment plan.

Choosing a repayment plan

Got federal loans? You can quickly compare how much you’d pay each month on different repayment plans by using the repayment estimator tool on Sign in with your FSA ID and enter information about your income and taxes to get the most accurate estimate. You’ll see how much your loans would cost each month and in total on each repayment plan you’re eligible for.

Checking forgiveness programs

You can also use the repayment estimator tool to find out how much you’d receive with Public Service Loan Forgiveness (PSLF). But before you make any decisions, you might want to look into other forgiveness programs as well — especially if you have private loans. These are often available by profession and require a service commitment of some kind — usually a few years working in a low-income community. You can get started with our guide to student loan forgiveness programs.

Can I change my repayment plan with private loans?

Adjusting your repayment plan for private loans can be trickier — most only come with a standard plan in which you make fixed monthly repayments over the length of your loan term. Contact your servicer to explain your situation and ask for a modified repayment plan — some might be willing to work with you so that you avoid defaulting. Or else refinance your loans for a longer loan term with a cosigner who has a higher income and low debt-to-income ratio.

Step 3: Make a game plan for paying off all of your debt — not just your student loans.

Before you sign up for a repayment plan, make a list of all of your debts. Look at which has the highest interest rates and plan on paying off those first before you tackle lower-interest debt. If you have a lot of credit card debt, for example, you might want to consider signing up for a repayment plan with a lower monthly cost in order to focus on paying off your credit cards first.

Step 4: Create a budget and stick to it.

You’ve signed up for a repayment plan and have a game plan to tackle all of your debt at once. Now all you have to do is pay your bills on time and make sure you don’t go outside of your budget. If you don’t have the time or patience to keep track of your spending by hand, consider using a budgeting app that sends you alerts when you’re approaching your spending limit for different categories.

If you have extra funds — like a bonus or tax refund — consider putting it toward whichever debt you’re prioritizing. Contact the lender first to make sure there’s no prepayment penalty and that the extra money goes directly toward the loan balance.

What to avoid when you have a high debt load

Steering clear of a few things can help you make the most of paying off a high debt load:

Taking on more debt

Having a high debt load makes it difficult to qualify for competitive rates, so now is not the best time to finance a new car or buy a home. Your debt load can lower your credit score and also affects your debt-to-income (DTI) ratio, which lenders look at when evaluating your application. You generally can’t qualify for a loan with a DTI ratio above 43%.

Deferment and forbearance

In most cases, pausing repayments increases the cost of your student loans both in the short and long term, which is why deferment and forbearance are best saved for emergencies.

That’s because interest continues to add up, even while you aren’t making repayments. This gets added to your loan balance, meaning you’ll end up paying interest on interest. Your loan term also generally stays the same. So you’ll have a shorter amount of time to pay off a larger balance, giving you higher monthly repayments.

Refinancing federal loans

You likely won’t be able to qualify for a better deal on your student loans if your debt load is higher than your salary. But you might want to stay away from refinancing federal loans in particular because you’ll lose eligibility for repayment plans based on your income and have fewer options for forgiveness.

Compare student loans refinancing options

Name Product APR Min. Credit Score Loan amount Loan Term
Purefy Student Loan Refinancing (Variable Rate)
1.88% to 5.54%
$5,000 - $300,000
5 to 20 years
Refinance all types of student loans — including federal and parent PLUS loans.
Credible Student Loan Refinancing
1.80% to 7.74%
Good to excellent credit
Starting at $5,000
5 to 20 years
Get prequalified offers from top student loan refinancing providers in one place.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
2.25% to 6.59%
Starting at $5,000
5 to 20 years
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Splash Financial Student Loan Refinancing
1.88% to 6.15%
Starting at $7,500
5 to 25 years
Save on your student loans with this market-leading newcomer.
Education Loan Finance Student Loan Refinancing
2.39% to 6.01%
Starting at $15,000
5 to 20 years
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
1.88% to 5.64% APR with autopay
$5,000 - $500,000
5 to 20 years
Get a tailored interest rate and repayment plan with no hidden fees.
Supermoney student loan refinancing
Starting at 1.9%
No minimum credit score
$5,000 - $300,000
5 to 20 years
Compare options to combine both private and federal debts into one monthly payment.

Compare up to 4 providers

Bottom line

Student loans are more flexible than most other types of debt, especially federal loans. To get out of debt in the fastest way that fits your budget, consider all of your debts — not just your student loans — before committing to a repayment plan. You can learn more about how repayments work by checking out our guide to student loans.

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