How to Pay Off $200k+ in Student Loans

Grace Lemire
Grace Lemire

Grace Lemire is a freelance writer and editor with over five years of experience in the personal finance industry. She has been featured on a variety of publications, including NPR, CNN, FinanceBuzz, Dollar Geek, Pangea, and True Finance. Her work focuses on the intersection of personal finance and technology. In 2023, Grace was nominated for the Best Personal Finance Advice award in’s FinTok Awards.

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August 24, 2022

When paying for college, a few thousand here and there might not seem like much. But overtime, it adds up quickly. And, with more expensive programs and advanced degrees, it’s hard to dodge the colossal tuition bills.

If you’re staring at a student loan balance of over $200,000, you might be feeling overwhelmed, and rightfully so. It may be challenging to conceptualize how one could possibly attack such a mountain of student loan debt.

The good news is this: It’s entirely possible, and we’re here to help you break it down. Here’s how to pay off $200,000 in student loans.

Jump Ahead > Loan ForgivenessRefinancePick a Strong Debt Payoff Plan • Cut ExpensesNegotiate a Raise or Pick Up a Side HustleJobs with Debt Payoff Benefits

Look for Loan Forgiveness Options

Student loan forgiveness programs can wipe out all, or some, of your student loan debt. That, combined with the very specific criteria of some programs, makes it a necessary starting point.

Oftentimes, student loan borrowers are unaware of such programs and their requirements, only learning about them when they are further along in their debt payoff journey. For example, the Public Service Loan Forgiveness program requires recipients to have made 120 qualifying monthly payments on an income-driven repayment plan. It is not uncommon for borrowers to have made payments for years without recognizing that they don’t count toward forgiveness as they weren’t on the proper repayment plan.

Thus, it’s important to consider these programs as soon as possible in your debt payoff journey. Making yourself aware of the options available can help you begin the process of meeting the necessary criteria before making non-qualifying payments.

Consider Refinancing Your Student Loans

If you have high-interest loans, refinancing should be your next step. Refinancing, in a simple sense, is the process of swapping your current loan(s) for one with a better interest rate or terms. 

If affording your monthly payments is your main concern, refinancing to a longer repayment term will be helpful. By doing so, your monthly payments will decrease. Be aware, however, that a longer repayment period typically leads to paying more in interest over the life of the loan.

If you’d simply like to get out of debt faster and pay less over the life of the loan, refinancing to a lower interest rate and/or a shorter repayment period will be a great route. Knocking down your interest rate, even just a few percentage points, can save you thousands over the life of the loan. 

You can refinance all types of student loans, including both federal and private student loans, regardless of whether they were for medical school, law school, or a simple undergraduate degree. However, you’ll need a strong credit score and stable income to qualify.

If your financial situation isn’t up to par in those areas, consider adding a creditworthy cosigner to the loan. If adding a cosigner isn’t an option, consider working with a lender that has low credit score requirements.

Make Sure You’re Debt Payoff Plan is Strong

While throwing any and all cash on your student debt is a great start, having a more well-thought-out debt payoff strategy will likely generate better results. Here are a few ways to strengthen your approach:

Use the Avalanche Method

While there are a variety of debt payoff strategies, the Avalanche Method will save you the most money over the life of the loan. With this method, you will make minimum monthly payments on all loans. Then, make monthly surplus payments on the loan with the highest interest rate until it is paid off.

Once that loan is gone, take the amount you previously allocated toward it, and start directing it toward the next highest interest rate loan until that loan is gone, too. Continue this process until all loans are paid off.

Make Biweekly Payments

Student loan interest typically compounds daily. So, by the time you’ve made it to your monthly payment, interest has accrued for nearly 30 days.

To get ahead of the interest, and make more of your payment go toward the principal, take the amount you’d contribute each month and divide it into two payments. Then, make that half payment every other week, instead of once per month. While a small change, it can reduce how much you pay over time quite significantly, especially when done with high-balance loans.

Make Surplus Payments

If you happen to get a raise, a bonus at work, or a hefty tax refund, consider throwing it at your student debt. While tempting to spend that cash on more exciting purchases, putting it toward your debt may be more rewarding in the long run.

Cut Back Expenses Where You Can

Digging yourself out of $200,000 in student loan debt will take some discipline. If you don’t already utilize a budget to guide your spending, now is the time to make one.

A budget will allow you to track your income and expenses, giving you a better idea of where you can cut back. For example, if you happen to spend $200 per month on coffee, consider cutting that in half and directing the remainder to your debt.

Negotiate a Raise or Pick Up a Side Hustle

If cutting back on expenses isn’t possible, consider increasing your income through negotiating a raise or picking up a side hustle. While it may only lead to a few thousand dollars per year, it can make a serious dent in your debt.

For example, let’s say that your increased income leads to an additional $500 per month. On a $200,000 loan balance with a 4.5% interest rate and a 10-year repayment term, that $500 monthly surplus payment would save you over 2 years of repayment and $11,300 over the life of the loan.

Find a Job with Debt Payoff Benefits

Just as some employers provide healthcare benefits or a 401k match, some provide debt payoff benefits as well. While it may seem too good to be true — I mean, an employer paying off your debt is pretty sweet — it might be more common than you think. In fact, around 17% of employers offer student debt assistance, and another 31% plan to offer it in the future.

If you’re in the market for a new role, consider searching for one with debt payoff benefits. Companies like Aetna, Chegg, Fidelity Investments, Google, Hulu, and Lockheed Martin all offer competitive debt payoff benefits, some providing up to $6,000 per year.

FAQ About Paying Off a Lot of Student Debt

How long will it take me to pay off my student loans?

It depends on the amount of debt you have, your interest rate, your repayment period, and your debt payoff strategy. To find the exact timeline for your specific situation, use a debt payoff calculator.

How much student debt is too much?

There is no numerical threshold that is widely recognized as “too much” student debt.

For example, the average dental student graduates with nearly $300,000 in student loan debt. However, with dentist salaries often in the $150,000-$200,000 range, it may not be an unreasonable amount of debt for that industry.

That amount of debt, however, for an entry-level civil engineer with a starting salary of roughly $60,000 may be overwhelming. What is considered “too much” debt is entirely subjective.

Is it better to have savings or pay off student loans?

Before dipping into savings to pay off student loans, be sure to have a solid emergency fund worth 3 to 6 months of expenses.

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