Can Borrowers Still Pay Off Their Student Loans in 10 Years?

Absolutely. Not only is paying your student loan debt off in 10 years possible, I’ll show you how to do it.

Putting Your Student Loan Debt in Perspective

First of all, let’s discuss student loan debt in general. The average amount of student loan debt in America is $27,000. That might seem huge. But in fact, that amount is pretty manageable — especially when you consider that, according to the National Association of Colleges and Employers, the average starting salary of 2013 graduates is $44,928.

Let’s look at a hypothetical. Let's say that your career field has a lower starting salary than the national average, and you’re only making $31,000 a year. If you were to make even payments for 10 years on $27,000 in federal student loans with the average interest rate of 6.8 percent, your payment would be about $310 per month. That's 1% of your annual income, and it's also the equivalent of a car payment — something that millions of Americans manage to budget for.

Remember, You Don’t Have to Pay Your Loans Off in 10 Years

If that $310 a month still feels impossibly expensive — or your student loans are much larger than the $27,000 average — don’t worry. The federal government offers several repayment options based on your income and student debt-to-income ratio. Whether you are unemployed, have a large salary but a large amount of debt to go with it, or otherwise have a difficult time paying your loans, these government programs should be able to help you out. See what you qualify for by visiting the Office of Federal Student Aid’s income-driven repayment plans page.

How to Pay Off Your Student Loan Debt in 10 Years

So, what to do if you don’t qualify for income-driven repayment, or you just want your student loans to be gone in 10 years? Follow these steps, and you’ll be more likely to have your loans paid off within 10 years — or possibly sooner.

Track Your Spending and Make a Budget

It’s difficult to know how much money you can put towards your student loans if you don’t know how much space you have in your budget. That’s why need to track what you spend — and then, set a monthly budget so you can keep your spending under control. You can use a spreadsheet or pencil and paper, but I recommend making it easy on yourself — use a budgeting site like Mint or You Need a Budget, which automatically track your spending for you.

When you’re making your budget, make sure you designate some money for fun every month, such as a couple of dinners out with friends or tickets to a concert. One sure-fire way to fail when budgeting is to not allow yourself funds for anything enjoyable — if you do that, you’re more likely to break your budget and over-splurge (and be generally miserable).

Find More Money

Whether you don’t have enough money free in your budget to make those $310 a month payments or you want to pay your loans off faster (because the longer you stretch those payments out, the more you’ll pay in interest), reducing your monthly expenses and making more money can help.

If you look up ways to save money, you’ll see a lot of examples telling you to do this or that — cut your cable, get a roommate, etc. But here’s the most important advice on cutting your expenses: Make a list of things that are truly important to you, and cut expenses elsewhere so you can afford those things. If you love watching sports, maybe you don’t want to cut your cable — but you won’t mind dining out less. Maybe having your own place without roommates matters to you, but you’re willing to take public transit or ride a bike instead of owning a car.

There are other ways to spend less too that don't require any lifestyle changes. Always make sure to turn off the lights when you leave the room, for example, so you're saving on electricity. Or if the price for your cable or internet jumps, call customer service and ask if there are any deals you can take advantage of – they'll almost always put you back on an introductory rate.

Also consider looking for ways to earn more — after all, there are limits to how much you can cut your expenses, but you can always make more money. Get some ideas for side jobs here.

Finally, check out of list of ways to pay off your student loans off faster — it has lots of ideas on how to reduce expenses, earn more money, and become debt-free.

Utilize Public Service Loan Forgiveness

There’s another way to get rid of your student loans within 10 years — utilize the Public Service Loan Forgiveness program. If you work in a qualified public service job and make on-time student loan payments, the federal government will forgive the remainder of your loans after 10 years. To learn more about the program and see if you qualify, check out our PSLF article (LINK TO THAT WHEN IT IS UP).

Are you planning to pay off your loans within 10 years?

This article is part of our New Graduate Help Center — a new Wise Bread section offering financial tips and life hacks to recent grads. This section is made possible by the support of Sallie Mae. Check out more great tips from this section:

Why You Shouldn't Panic About Your Federal Student Loans	3 Things You Must Know About Repaying Your Private Student Loans
What Recent Grads Must Know to Repay Federal Student Loans	15 Ways to Pay Back Student Loans Faster