Owing $70,000 in student loan debt can feel crippling, but there are strategies to simplify repayment. First, look your loans square in the eye to fully understand the debt you’re contending with.
From there, assess your options and determine which path is right for you, whether that’s adhering to a debt repayment strategy or completing a $70K student loan refinance.
- Review your student loans
- Create a repayment strategy
- Explore refinancing, consolidation
- Other ways to pay off $70K in education debt
Review your student loans
Not all student loan debt is the same. An important first step to pay off $70K in student loans is figuring out what type of education debt you have and their interest rates.
Broadly speaking, you either have federal student loans or private student loans (or a mix of both). Federal loans are offered by the federal government through the U.S. Department of Education; online lenders, banks, and credit unions offer private loans.
For private loans, your interest rate will vary depending on your credit profile and finances when you applied, and it can be fixed or variable. Federal student loans, on the other hand, have fixed interest rates that are standardized. Your credit doesn’t affect the rate you get, and everyone who qualifies in the same academic year receives the same rate.
To figure out what type of student loan you have and access other key information about your loan, including its interest rate, do the following:
- For federal student loans, log onto your StudentAid.gov account, where you’ll find information on your loan or grant amounts, outstanding balances, loan statuses, disbursements, and servicer information. Or, contact your student loan servicer directly.
- For private student loans, you’ll need to contact each of your lenders individually. If you’re not sure what private student loans you may have, request a free credit report from AnnualCreditReport.com.
Based on what you learn about your debt, start exploring potential repayment options. For federal student loans, there are a variety of repayment options available, such as income-driven repayment (IDR) or graduated repayment plans. Private student loans may or may not offer different repayment plans; ask your lender what’s available.
Create a repayment strategy
When you first enter repayment, it might feel overwhelming to tackle $70,000 in student loan debt. However, it’s possible to develop a repayment plan that fits your budget and lifestyle and helps you feel motivated to stay on track.
Debt snowball vs. debt avalanche methods
Two popular debt repayment strategies that you might consider are the debt snowball or debt avalanche methods. For both methods, start by organizing your student loans in order of highest to lowest interest rate, and mark down each loan’s minimum monthly payment.
With the debt snowball method, you’ll start by putting any extra money you have toward the loan with the smallest balance, making sure to continue making minimum payments on your other loans. Once your smallest loan balance is paid off in full, you’ll focus on the loan with the next smallest balance and repeat the process until you’re debt-free.
While this method won’t save you in interest, it can help you build momentum by paying off small loans quickly and earning easy wins.
The debt avalanche method, on the other hand, focuses on paying off the loan with the highest interest rate first. You’ll put any extra funds toward that loan while continuing to make minimum payments on your other debt. Once that highest-rate loan is paid off, move your focus to the loan with the next highest rate — repeat until your loans are gone.
The upside of this approach is that it can save you money on interest by getting the highest-interest debt off your back first.
Review your cash flow
Wondering where that “extra” money to put toward your student loans is coming from? That will generally require reducing your expenses or increasing your income — here are some tips to get started:
- Begin tracking your spending habits. You might be surprised to find there are obvious areas you can cut back, such as unused subscriptions or excessive spending. Budgeting apps like Mint or You Need a Budget can simplify this and make it easier to spot patterns in your purchases.
- Set a budget. Another way to keep your spending in check is to make a budget (or spending plan) — and then stick to it. By planning where your money will go ahead of time, you’ll already have allocated some extra cash to student loan payments.
- Lower housing costs. Housing is the largest monthly expense for many families, and it’s an effective spot to try to cut back. Consider sharing costs with a roommate or moving to a cheaper apartment or area. If you have a mortgage, you might look into refinancing.
- Start a side hustle. If you can’t comfortably cut your spending, try increasing your income instead. A side hustle, such as dog walking or rideshare gigs, can help you pull in some additional funds on your own schedule.
- Ask for a raise. If your performance at work is strong and it’s been a while since your last pay bump, ask your boss for a raise. Then, you can put that jump in your salary toward your student loan debt.
Explore refinancing and consolidation
When facing a high debt balance, changing the terms of your loan or simplifying payments can be a gamechanger. Refinancing or consolidation could help.
Private student loan refinancing
If you refinance $70K in student loans, you could combine all or some of your debt into a new loan through a private refinancing lender. Your approval and interest rate will depend on your credit profile, income, and other financial factors such as your debt-to-income ratio.
When comparing lenders — and you should make sure to shop around for the best deal — review the eligibility requirements as well as what terms and options the lender can offer. Many lenders also allow you to prequalify on their sites, so you can get a more accurate estimate of what you might qualify for.Â
Ideally, refinancing would allow you to secure a lower interest rate, lower monthly payments, and/or a longer loan repayment term. You’d also get the simplicity of a single monthly payment due to one lender, not a handful.
However, there are drawbacks to keep in mind before refinancing.
- When you refinance federal student loans, you’ll lose access to federal protections such as IDR, loan forgiveness programs, and more flexible deferment and forbearance. Additionally, if you refinance to a longer repayment term, you’ll typically pay more in interest over the life of the loan.
- When you refinance private loans, there are fewer negative side effects since the debt is already private. However, by refinancing, you similarly risk increasing the total cost of repayment, particularly if you end up with a higher rate or longer term. You also run the risk of forfeiting certain benefits, such as rate discounts, you might enjoy with your current private lender.
Federal student loan consolidation
Student loan consolidation, on the other hand, is only an option for federal student loans. This process allows you to combine all or some of your debt into a federal Direct Consolidation Loan. Not only can this streamline your monthly payments, but it can grant you access to additional repayment options.
However, unlike refinancing, there’s no chance to lower your interest rate with federal consolidation. Instead, your interest rate will be the weighted average of the rates on your existing loans, rounded up to the nearest one-eighth of one percent. Additionally, any unpaid interest on the loans you consolidated will get added to your principal balance — which means interest will begin accruing on that higher balance.
Still, you could lower your monthly payments by extending your loan term (though this will result in paying more interest in the long run). If you’re struggling with your payments and have fallen behind, you might also consider how student loan rehabilitation vs. consolidation could help restore your loans to good standing.
Other ways to pay off $70K in student loans
Beyond exploring debt payoff strategies, there are other ways to get help with student loans.
Employer-sponsored repayment programs
See if your employer offers student loan repayment assistance — or if you could find a job with an employer that does. With this employee benefit, an employer will either match your student loan payments or contribute a fixed amount each month.
Career-based repayment opportunities
Some careers offer special loan repayment assistance programs for workers. These programs are most common in healthcare, dental, legal, and teaching professions and typically require you to work a number of years in a high-need area or otherwise serve a vulnerable population. In exchange, you might receive tens of thousands of dollars to put toward your student loans.
Some programs have broader eligibility requirements. For example, the Tulsa Remote initiative offers up to $10,000 in cash for remote workers in any field to move to Tulsa, Oklahoma.
| Tip: Talk to your employer’s human resource department, your professional association, or colleagues in your network to learn about repayment assistance programs in your field. |
Federal forgiveness programs
Federal loan forgiveness can erase all or a portion of your debt. With Public Service Loan Forgiveness (PSLF), for instance, if you work full-time for a government or not-for-profit organization, you might qualify for forgiveness. Keep an eye on sometimes-strict eligibility requirements for these programs, though. For PSLF, for example, your remaining balance would be waived, but only after you make 120 qualifying payments on eligible federal loans.