How Long Does It Take Most People to Pay off Student Debt?

Pay off student debt

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Students often avail of loans to pay for their educational expenses such as books, tuition boarding, and lodging. Having said that, one should borrow as conservatively as possible to make loan repayment easy.

The repayment of a typical student loan begins just before enrollment or after the student’s enrollment period drops to less than half. Though the standard repayment plan for federal student loans is 10 years, it usually takes longer for most borrowers to repay within this period.

However, some undergraduate programs may be able to repay student loans faster by making larger monthly payments.

Graduate programs, typically cost more than undergraduate programs, therefore graduate degree holders can take longer than undergraduates to pay off their student debt.

For example, holders of aerospace engineering degrees who pay 15% of their monthly income towards debt, would be able to repay their loan in about four years for men and nearly six and half years on a woman’s salary. 

Again, because there are so many different types of student loans, with varying rates of interest, it is difficult to set a fixed time period to repay the loan.

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The amount borrowed and the repayment plan selected by the student, as well as the use of deferments and forbearances also are factors to be considered.

Borrowers with multiple federal student loans can consolidate their loans and make repayments over 10-30 years. Additionally, the government offers other options like income-driven repayment which allow students to make smaller payments over extended periods.

Data Summary for Federal Student Loans

  • Student loans can take between 5-30 years to repay, or even longer
  • An average undergraduate degree holder will need six and a half years to repay the loan provided they set aside 10% of their monthly income towards loan repayment(this comes to about $290 per month to pay off the loan in 10 years or less)
  • An average post-graduate degree holder will need 6-11 years to pay off their master’s degree debt
  • Nearly one-third of all federal student loan borrowers opt for the ten-year repayment plan, while 5% of the borrowers are on the extended 25-year repayment plan 
  • Almost 50% of student loan borrowers are over 35 years of age
  • Student loan repayment debt differs by race as well as by gender. An average female college-going graduate will take much more time to repay her loan than the average male graduate. Also, black college graduates take longer to pay back their loans than the average white college graduate 

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Pay-off Time for Private Student Loans

The typical time taken to pay off a private student loan is between 5-20 years. The terms and interest rates of private lenders depend on the credit score of the borrower linked to income and other factors. While your interest rate and your payment may change from month to month, the repayment period will remain the same.

Some private lenders defer payments for certain individuals and offer a six-month grace period after graduation.