How to Lower Student Loan Payments

“This is almost as much as my rent.”

“I could go on vacation every month with this kind of money.”

These are probably just a couple of the thoughts that have run through your mind as you make your monthly student loan payment. If only there were some way to lower your student loan payments to a more manageable level.


The good news: there is. You don’t have to be stuck with sky-high payments.

Student loans are a great way to manage college education costs. However, if they aren’t repaid quickly they can spell financial ruin for borrowers. If you’re interested in lowering your student loan payments then consider the following information.


Look Into Refinancing

Yes, student loans can be refinanced. However, whether or not this is advantageous for you depends on your income level. Lowering your interest rates lowers your overall monthly payments, depending on the features of your loan. Your credit score also plays a factor in refinancing. If you have a particularly in-demand college degree, that could help you too as banks consider earning potential.

If you have private student loans, you’re not eligible for alternative payment plans such as IDR. If that’s the case, or if you have a mix of federal and private loans, another option to consider is refinancing your student loans.

With refinancing, you work with a private lender to take out a new loan for the amount of your current ones. The new loan will have different terms, including repayment term, interest rate, and monthly payment. You can opt for a longer repayment term to reduce your monthly bill, and you might qualify for a lower rate that decreases your monthly payment, too.

Not everyone will qualify for refinancing. To maximize your chances of getting approved for a loan, ask a friend or relative with good credit and a stable income to act as a cosigner on the loan. Also, keep in mind that refinancing your loans has some drawbacks, especially if you have federal loans.

If you decide that refinancing is for you, compare offers from multiple refinancing lenders to get the best rate.

This is a great option if you have multiple loans and want to reduce the interest level on all of them. You can also add a cosigner to your refinancing loan if you aren’t getting approved. Be sure to ask what the Annual Percentage Rate is on your loan before signing on the dotted line.

Research a Pay-As-You-Earn Repayment Plan

Also known just as a PAYE plan, Pay-As-You-Earn repayment plans help reduce your monthly payments, making it easier to pay. These repayment plans are linked to your monthly income, and typically are 10 percent of your total income. After 20 years on this plan, you can expect your loans to be forgiven. As your income grows, your monthly payments will increase.

Consider Public Service Loan Forgiveness

Can’t seem to make your loan payments for any reason? If so, then a Public Service Loan Forgiveness plan might be the right fit. Nonprofits, schools, and public service agencies all offer programs where you can work off your loan. You can also join the military. If you sign up for the Army or Navy, a fixed portion of your student loans may be forgiven. These programs are a two way street, so expect to offer your time and energy in exchange for debt forgiveness.

Search for Repayment Assistance

It might sound too good to be true, but there are hundreds of legitimate student loan repayment assistance programs. Depending on your occupation and location, your state could provide thousands to help you repay your student loans.

Choosing Student Loan Payment Plans

If you’re wondering how to lower student loan payments, there are a variety of options from which to choose. Unfortunately, there can be a lot of confusion around what options are available for student loan borrowers. By using this guide, you can find what you need to lower your payments and make them more manageable.

Before you choose a plan of action, understand what benefits you might give up and calculate how much extra interest you may pay over time. While lowering payments can feel like a quick win, it can also have long-term consequences. Choose wisely.


If you look hard enough, you can find solutions for student loan debt burdens. Don’t let it ruin your credit. Make your payments or use these methods to get you on the right track.