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Should I repay my student loans? [Complete Guide]

By Andrew PaulsonCSLP, Lead Student Loan Consultant and co-founder of our partner site

Deciding how and when to repay student loans is not an easy decision for most. Many of you feel overwhelmed by your mortgage-sized student loans and wonder, “How did I get into this mess?

Student loans cause stress and burnout for doctors, dentists and other high-income professionals. Many, even with the best of intentions, make bad financial decisions about their student loans.

Here’s a guide to help you avoid making mistakes in repaying your student loans.

How long does it take to repay student loans?

The time it takes to repay your student loans depends on your type of loan and your choice of repayment plan. Federal and private loans have different payment options.

Repay Federal Student Loans

Some student borrowers will choose amortized loan options like the standard 10-year loan or the extended 25-year loan. Amortized options have a fixed monthly payment and a fixed payment date. The 10-year graduated and the extended 25-year graduated are similar, but the monthly payments start lower and increase every two years until their respective payment dates.

Income-contingent repayment (IDR) plans are also common among student borrowers. However, your payments are based on income rather than the amount of debt, and most are on track to get loan forgiveness through taxable forgiveness after 20 or 25 years or, through loan forgiveness of civil service (PSLF), after 10 years. Some borrowers will end up repaying their loans before receiving forgiveness in either avenue, and this is because they are making too large payments. You eliminate the benefit of loan forgiveness if you end up repaying your loans before your loan forgiveness date. You don’t want to end up paying them back into an IDR plan because the interest rates are probably 6-8%. Privately refinancing your loans would allow you to lower rates to 2-4% and could save you thousands in interest.

Repay private student loans

Borrowers will choose a repayment plan that fits their budget between five, seven, 10, 15 or 20 years. Some private lenders offer repayment terms longer than 20 years, but this is not common.

How long do you have to repay student loans?

Each student loan repayment or completion date varies depending on the loan type and repayment plan.

According to, the average student borrower takes 20 years to pay off their student loan debt. The highest paid doctors have an average of seven years to pay off their student loans. The WCI community generally follows the latter approach by living as a resident or pursuing PSLF.

When to start making student loan payments?

You should start repaying your student loan when you graduate from school, drop below half-time, leave school, complete the grace period, or your student loan goes into repayment .

Start making payments as soon as possible to minimize accrued interest and/or start crediting payments for loan forgiveness programs.

While in school, you can pay off your student loan or, if you can afford it, at least pay the interest.

Deferring student loan repayments after residency is a bad idea because

  1. Student loans continue to grow
  2. You will not receive credit for loan forgiveness
  3. You will not receive interest rate subsidies from any IDR plan
  4. Interest will be capitalized when you start repaying as a participant

What happens if you don’t repay your student loans?

The day you miss a payment, your student loans become delinquent. If you continue to miss payments for 270 days (nine months), your loans will be in default.

repay student loans

A default can cause your entire loan balance to fall due, hamper your ability to obtain new loans or scholarships, and damage your credit. The federal government has the ability to garnish wages, garnish tax refunds, sue, suspend professional licenses, and more.

Never let your loans become delinquent or, even worse, become delinquent. If you can’t afford to pay, do temporary forbearance (it won’t hurt your credit, but you can’t stay in forbearance indefinitely either). Remember that monthly Income Contingent Repayment (IDR) plan payments are quite affordable for most and a better alternative to forbearance, delinquency, and default.

If you lost your job and are on an IDR plan, fill out a certification form, and it will reduce your payments to zero dollars in the interim until you find another job.

Can you pay off your student loan sooner?

Yes, you can prepay your student loans. There is no prepayment penalty for prepaying a student loan. With federal loans, however, there is a prepayment status you should be aware of if you are pursuing a PSLF.

Those of you who can afford to pay off your loans earlier than expected can save a lot of money.


Imagine you have $400,000 in student loans with a 10-year term at 2.5%. Monthly payments of $3,771 over 10 years would equal $452,496.

sample student loan

If you can afford larger monthly payments, such as $5,196 per month, you’ll end up paying about $26,000 less in student loans.

Should you pay off your student loan sooner?

Most of the time, it’s a good idea to pay off your student loans as soon as possible, as discussed above in reducing the overall payment.

The only time you shouldn’t pay off your student loans sooner is if you opt for the PSLF or taxable loan exemption. In this case, you may not reach the loan forgiveness milestone for 10 years or 20-25 years.

Is there a better use for my money?

Many advocate minimum payment for your student loans or even forbearance and using all that money you would spend on your student loans in a retirement account, real estate, mutual funds, or even something more. exotic like cryptocurrency.

We recommend that you repay your debts and invest. See this post to learn more.

Which student loan to repay first?

Step 1: If the interest rates are equal between your federal and private student loans, pay off those private student loans first. They have less protection than your feds.

Step 2: Start with your highest interest rate loan.

Suppose you have two loans of $25,000 on a 10 year repayment. The interest rate on loan 1 is 8% and the interest rate on loan 2 is 3%.

sample student loan

Paying off Loan 1 in five years, the total payment is only $59,383, compared to paying off Loan 2 in five years at $63,351.

This saves $4,168.

Does paying off student loans help your credit score?

Yes, paying off your student loan can improve your credit score. Student loans are listed as installment loans and can go a long way in building or breaking your credit score.

Payments are reported to the three major credit bureaus: Equifax, Experian and TransUnion. On-time payments will positively contribute to your credit score. Late payments, delinquent loans, and ultimately defaulted loans hurt your credit score.

VSa I pay a student loan with a credit card?

There are certainly people who have paid off their student loans with a credit card. But this is generally a risky idea due to:

  • Credit card interest rates can far exceed student loan interest rates
  • Loss of federal student loan protections
  • Transaction fees

Federal Loan Services will not authorize credit card payments directly unless you are using a card service like Plastiq. Private loan servicers may allow you to do this, but may charge additional fees.

If you need help deciding on the optimal repayment plan for your student loans, meet!

As we all know, student loans can be stressful and can have a significant effect on your financial health and mental well-being for decades after you finish medical school. But I’m here to help you take control of your student loans.

Schedule a consultation with me at, and you’ll receive a personalized student loan plan that will save you hours of research and stress and potentially hundreds of thousands of dollars. Get started on the path to financial independence by letting me guide you through your best student loan options.

Have you started repaying your student loans? What was the process? What do you know now that you wish you knew back then about student loans? Comments below!

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