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Six Tips for Paying Off Student Loans (And Pitfalls to Avoid)

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 (LA Johnson/NPR)

Paying off student loans can be a financial nightmare. The system is loaded with confusing payment plan options, bad information and pitfalls to avoid — and one wrong move can cost you thousands of dollars.

COVID-19 has added even more confusion. Federal student loan payments have been suspended temporarily. (At the moment they're on hold until the end of 2020.) There's a chance that another big stimulus bill could affect student loans in the coming months.

But even if your loans are on hold now, you'll likely need to start making payments eventually. And Life Kit is here to help.

If you know how to navigate the student loan system, you can find a payment plan that you can actually afford — and even save money. Here are a few steps to get on the right track.

1. Figure out what kind of student loans you have, and set up a repayment plan that works for you

If you've got federal student loans, which most people do, go to the National Student Loan Data System. You can look up your loans there. Then think about what sort of repayment plan works best for you. There are four broad categories: standard, graduated, extended or income-driven repayment.


Standard: Your loan-servicing company will divide up the total amount of money you owe over a 10-year period. If you pay that same amount for 10 years, you're done.

Graduated: Like the standard plan, this also lasts for 10 years — but you start out paying less, and payments get larger every two years. This option can be good for borrowers who know they'll make more the longer they work.

Extended: Pay a lower amount over a longer period of time.

Income-driven repayment (IDR): Pay what you can afford. In IDR plans, you might be paying your loans off for 20-25 years — but the payments will always be what you can afford. Some people won't owe anything. Then, after 20-25 years (depending on your loan type and your plan) anything you haven't paid is forgiven. If you're in this plan, you'll need to certify your income every year.

If you've got a private loan from a bank, you might have fewer options than those federal student loans. You'll need to call your bank and see what options they offer.

2. Beware of forbearance

If you're having trouble making payments or tight on cash, your loan servicer might suggest that you opt for forbearance, which puts your student loan payments temporarily on hold. But that doesn't necessarily mean that forbearance is the best option for you.

"Nine times out of 10, income-driven repayment is going to be a way better option," says Bonnie Latreille, a director at the nonprofit Student Borrower Protection Center. Latrielle says that forbearance might sound like a good idea — but it can leave you with higher payments and higher interest in the long run.

3. Do your own research

Your student loan servicer is your main point of contact about your student loans. But don't treat them as a guide. "Make sure you're going to them informed. Make sure you know what you want to do and what your options are," Latreille says.

Your loan servicer won't always suggest what's best for you — so you need to be your own advocate. If they push back? Ask for written confirmation that they've put you in a plan you want to be on.

4. Give yourself space and time to get organized

"Any kind of sustained project, like dealing with loans, takes real time and deserves our full attention when we're doing it," says Elizabeth Emens, a Columbia Law School professor and author of Life Admin: How I Learned to Do Less, Do Better, and Live More, a book about the invisible labor in all of our lives.

You'll need to make sure that your student loan servicer always has your most up-to-date address on file and research the right payment plan for you. Giving yourself the time to get these things done will pay off in the long run.

5. Tackle your loans head-on

There's only so much that you can work and only so cheaply that you can live. But if you've got time to work more, or cut costs in other areas of your life, it may be worth doing. If you can get those payments done now, you'll have more time later to spend how you want to.

6. Be VERY careful when it comes to loan financing or consolidation

Consolidation is a process that rolls all your federal loans into one single federal loan. Refinancing is a similar process that rolls your loans into one private loan. For some, these might be good options — but they can be risky. For example, if you refinance your loans, you lose out on all the federal repayment plans, like IDR. Consolidation might affect your status in an existing forgiveness plan.

So before you go either of those routes — do your research.

We'd love to hear from you. Leave us a voicemail at 202-216-9823, or email us at

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The audio for this episode was produced by Sylvie Douglis, and originally aired on June 10, 2019. That original audio can be found here.

Copyright 2020 NPR. To see more, visit

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