10 ways to lower your student loan payments

Your monthly student loan payments aren’t set in stone. You have options to lower them and make them more affordable.

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Lowering your student loan payments may be easier than you think. If you’re struggling to manage student loan debt, these 10 strategies may help. (iStock)

A whopping 44.5 million people have student loan debt in the U.S., with more than $1.5 trillion owed, according to U.S. Chamber of Commerce data. Those loan payments can be burdensome, making it harder to pay bills or achieve major life goals, like buying a house.

Fortunately, you have options for lowering your student loan payments. The 10 strategies below are a good place to start.

With Credible, you can compare student loan refinance rates from various lenders.

10 ways to lower your student loan payments

Your student loan payments aren’t set in stone. These 10 strategies may help you reduce your monthly payment amount and make your student loan debt more manageable. 

1. Apply for an income-driven repayment plan

Income-driven repayment plans base your monthly payment on how much discretionary income you have, and in some cases, they may even reduce your monthly payment to zero. These plans are only available to federal student loan borrowers.

You can choose from four types of IDR plans, lasting anywhere from 20 to 25 years. When the repayment period is up, any remaining loan balance will be forgiven — meaning you no longer need to repay it. To apply for an income-driven repayment plan, contact your loan servicer.

2. Sign up for an Extended Repayment Plan

If you have federal student loans, an Extended Repayment Plan allows you to lower your payments by spreading them out over a longer period of time (25 years versus the typical 10-year term most student loans come with).

To be eligible, you must have no overdue payments and a federal student loan balance of more than $30,000. Contact your loan servicer to transition to an Extended Repayment Plan.

3. Enroll in a Graduated Repayment Plan

A Graduated Repayment Plan is another option for federal loan borrowers. It allows you to make smaller monthly payments at first and bigger ones later on — when you’ll presumably make more money.

These are 10-year plans, and your payments will gradually increase, typically every two years. To be eligible, you simply need to have federal student loans or a federal Direct Consolidation Loan. To enroll in a Graduated Repayment Plan, contact your loan servicer.

4. Sign up for an Income-Sensitive Repayment Plan

Income-Sensitive Repayment Plans base your monthly payment on your annual income. Payments adjust every year and are made for up to 10 years. Federal Direct Loans aren’t eligible for this type of plan, but all other federal student loans are. You’ll need to contact your servicer to set one up.

5. Apply for repayment assistance

Repayment assistance programs can help you lower your payments or even pay your loans off completely. Various nonprofits and community organizations offer them, and in some cases, your employer might even offer one as a benefit. Depending on the type of program, federal or private student loans may be eligible for repayment assistance.

6. Consolidate your federal loans

If you have several federal loans, using a Direct Consolidation Loan could help reduce your costs. This type of loan lets you roll all your federal student loans into one, often spreading your payments over a longer period and reducing your monthly payment amount. But keep in mind that you might not receive a lower interest rate with a Direct Consolidation Loan — your new rate will be a weighted average of all your existing loans. 

To be eligible for a Direct Consolidation Loan, your loans can’t be in default and you’ll need to be out of school or at least below half-time enrollment. To apply for one, you can complete a form on the StudentAid.gov website or print a paper application and mail it in.

7. Sign up for automatic payments

Private lenders often offer interest rate discounts for borrowers who set up automatic payments from a bank account. Autopay discounts can help reduce both your monthly payment amount and your long-term interest costs. If you have private student loans, ask your servicer if these types of discounts are available for your loan.

8. Refinance your student loans

Refinancing your student loans is another way to lower your monthly payments. This essentially replaces all your existing loans with a single new one — ideally with a lower interest rate. You can also refinance into a new loan with a longer term, which lowers your payment as well. Just keep in mind that while a longer repayment term will likely lower your monthly payment, you’ll pay more in interest over the life of the loan.

And think carefully before deciding to refinance your federal student loans into a private loan. This will mean losing out on all the benefits federal loans come with, such as income-based repayment plans, extended repayment plans, and Public Service Loan Forgiveness.

Credible lets you compare student loan refinance rates without affecting your credit score.

9. Ask your employer for repayment help

As part of the CARES Act passed in 2020, employers can offer up to $5,250 annually to help workers pay down their student loan debt. While not all employers offer this benefit, many larger companies do. It’s worth asking your company’s HR department if your employer offers student loan repayment assistance. 

10. Seek help from your state

Some state and local agencies offer student loan repayment assistance (or even loan forgiveness), so check with your state’s education department to see what might be available. 

What to do if you’re having trouble making your student loan payments

If lowering your monthly student loan payment isn’t enough, and you’re still struggling to make your payments, either deferment or forbearance could provide temporary relief. You’ll apply for these with your loan servicer, and you may need to prove financial hardship to be eligible. 

As part of a COVID-19 emergency relief measure, federal student loan payments are currently paused and no interest is accruing until Jan. 31, 2022. If you still need help with your payments after Jan. 31, here’s some additional information on deferment and forbearance. 


With deferment, you can pause your student loan payments for a certain amount of time. In many cases, your loan will continue to accrue interest during this time (though it depends on the type of loan you have). Deferments can last up to three years.

To qualify for deferment based on economic hardship, you’ll need to be receiving a means-tested benefit (like welfare), work full-time but have earnings less than 150% of the poverty guideline for your family size, or be serving in the Peace Corps.


Forbearance lets you pause your student loan payments or make smaller payments for up to 12 months. As with deferment, interest may continue to accrue during forbearance. 

To be eligible, you’ll need to be unable to make your monthly payments due to financial difficulty, medical expenses, a change in employment, or another reason your loan servicer approves.

If you aren’t eligible for deferment or forbearance and think refinancing is the right move for you, Credible lets you easily compare student loan refinance rates from multiple lenders.