How To Pay Off $80,000 in Student Loans: Strategies and Tips

Most student loan borrowers have a balance of less than $25,000, according to the Federal Reserve. However, large balances are not uncommon — especially among those with graduate or professional degrees.

Even if you owe $80,000 or more, you still have plenty of options for repaying your student loan lenders and moving forward without such a large debt burden.

Understanding $80K in student loan debt

When you have an $80,000 student loan balance, you probably have a large monthly payment, depending on what kind of loans you have, how much interest has accrued, and what payoff plan you've chosen.

A large monthly student loan payment makes it more difficult to budget to live within your means and to save for other things. Having a large amount of debt relative to your income can also make it more difficult to qualify for other types of credit after you graduate, such as a mortgage or auto loan.

Managing your debt involves making a plan to overcome these challenges. This could mean selecting a monthly payment plan that sets your payment as low as possible, or it could mean doing things like working to increase your income and avoiding other large financial obligations until you've made progress toward paying down your student loan debt.

You'll also need to weigh your priorities to determine if you want to pay off your student loans fast to save on interest, or if you want to keep monthly payments as low as possible, which would mean paying more over time.

Repayment options for $80K in student loan debt

If you have federal student loans, you are signed up for the Standard Repayment Plan by default. This plan requires you to pay off your loans in 10 years by making fixed monthly payments. This can be a major financial burden with a large balance, though.

While sticking with the standard plan makes sense for many borrowers, others may want to consider alternatives.

“Reaching out to your servicer is a great first step to see what options are valuable per your specific situation,” advises Hillary Saylor Schulze, director of student financial services counseling at Alvernia University.

Other federal student loan repayment plans you might be eligible for include:

Income-driven payments

Income-driven repayment plans can be a great option for those with an $80,000 student loan balance because they ensure your loans don't cost more than you can pay.

“Income-drive repayment plans adjust your payments based on your income,” explains Cameron Burskey, senior partner and managing director of retirement security at Cornerstone Financial Services.

These plans keep costs as low as possible by capping monthly payments at 5% to 20% of discretionary income. While you'll pay more interest over time, you'll pay less each month and may be able to have any remaining balance forgiven after 10 to 25 years of on-time payments, depending on the specific plan.

Graduated repayment

The Graduated Repayment Plan allows you to keep the 10-year payoff time from the Standard Repayment Plan, but your payment starts low and increases every two years.

If you expect your income to rise, this plan can provide more breathing room from the start — but since your loan payoff goes a little slower, interest costs can be a little higher over time.

Extended repayment

You can also choose the Extended Repayment Plan that stretches out your payoff time to as long as 25 years. The upside is lower monthly payments, but the downside is much higher interest costs and a much longer payoff time.

Private student loan payment plans

The payment plans mentioned above are for federal student loans only. If you have private student loans, you can't change the payoff terms you agreed to with your original lender when you took out your student loan.

However, you can refinance your private student loans if you want to change your loan terms. Refinancing involves taking out a new loan and using the money to pay off your existing student loan debt. If your new loan has a lower interest rate, this can reduce monthly payment amounts and lower the total payoff cost.

Your new loan can also change your repayment timeline. You can extend your payoff time to get the lowest rates possible. But if you extend the term much longer than your current loan, you may pay more over time even with a lower lower interest rate. If you shorten your payment time, your monthly payments will be higher but you'll be out of debt faster.

Strategies to pay off $80K in student loan debt

Choosing the right repayment plan is the first step in developing a strategy to pay off student loans, but it's not the only one.

“You'll likely want to create a budget and consider making extra payments,” advises Burskey. “Use your budget to track your income and expenses to identify areas where you can cut costs. Allocate additional funds toward your principal whenever possible. Use tax refunds, bonuses, or other unexpected funds to make lump-sum payments toward your loans.”

If you're making extra payments and have other debts aside from student loans, you'll have to decide where that extra money should go. Consider these two popular approaches to allocating additional payments:

• The debt snowball method focuses on scoring quick successes by repaying your smallest balances first. This approach should get you excited as you see your balances drop to $0. As you pay off each debt, you can redirect the money to the loan with the next-smallest balance.
• The debt avalanche method focuses on reducing interest as much as possible by paying off loans with the highest interest rates first. If you want to pay as little as possible on your loans, this is the way to go.

“It's important you try your best to stay motivated by celebrating milestones and rewarding yourself as you hit your repayment goals,” Burskey says.

Refinancing student debt during the payoff process

In some cases, refinancing student debt can help during the payoff process.

Refinancing works best for private student loans as you won't have to give up any federal borrower benefits when you move forward with a new lender. You can apply for a new loan at a lower rate than your current private debt to lower your payment and potentially your interest costs over time.

Current student loan refinancing rates

Refinancing federal student loans is also possible, but you would lose the chance at loan forgiveness as well as repayment flexibility since you can only refinance with a private lender. Income-driven repayment plans, options to change your repayment plan, and generous deferment and forbearance would no longer be available if you switch from federal to private loans by refinancing.

Budgeting tips to tackle $80K in student loan debt

As Burskey points out, making a budget is key when you're trying to repay $80,000 in student loan debt. You should look first at your current spending and try to find ways to redirect some of those funds to debt payoff.

You'll need to think carefully about how much extra you want to put toward your student debt, though. There are other important priorities as well. For example, you need an emergency fund so you don't end up in credit card debt if you face unexpected expenses, as credit card debt is costlier than student loan debt. You probably also don't want to pass up employer 401(k) matching funds as the free money this provides can offer a better return on investment over time than early loan payoff.

By listing your income and different expenses, including loan payments and contributions toward other goals, you can make a budget that works for you. You can also plan on allocating unexpected income such as bonuses or tax refunds toward student debt to become debt-free faster.

Increasing income through side hustles or by developing your work skills can also help you to become debt-free sooner by providing the funds you need for both student debt payoff and other financial priorities.

Alternative ways to manage or reduce student loan debt

With a large student loan balance, it's a good idea to explore all of your options for reducing debt. Additional solutions could include:

• Pursuing loan forgiveness through federal, state, or private programs: For example, the National Health Service Corps offers a loan repayment program for qualifying medical professionals in underserved areas while Public Service Loan Forgiveness is available for federal student loans if you work for any eligible not-for-profit or government employer.
• Turning to family for extra assistance: This is an option if your parents can offer some support. “I had a family redirect the money they were spending on baseball leagues and tutors,” says Danilo Umali, principal at Game Theory College Planners.
• Looking for an employer who offers loan repayment help: Some companies provide student loan repayment assistance as a workplace benefit. You can look for a job with one, or ask your current employer to consider offering a program.

By exploring all the different options available to you, you can pay off your $80,000 in student loan debt on a timeline that works for you, with monthly payments that you can afford.