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How to Lower Student Loan Payments

When the time comes to repay debt, students may wonder how to lower student loan payments.  Lower payments can give you more time to save money or establish yourself financially. Fortunately, there are several strategies for lowering student loan rates. Continue reading to learn about the many ways you can reduce monthly payments!

Also see: Scholarships360’s free scholarship search tool

COVID-19 pandemic update

There is currently an automatic suspension on federal student loan payments due to the COVID-19 pandemic. This forbearance went into effect on March 30, 2020 and will continue until at least August 31, 2022. Students have the option to take advantage of this relief or continue making payments. This period of forbearance could be used to save up money for future payments.

Enroll in an income-driven repayment plan

The federal government offers four income-driven repayment plans. These programs are based on income and family size, so the monthly payments are more affordable. In some circumstances, payments can be as low as $0 per month. These plans can also be adjusted if your income decreases or your family size grows. 

Income-driven repayment plans are a good option to keep monthly payments low. However, the plans extend the payment period, meaning you’ll pay more in interest over time. Keep this in mind when deciding if an income-driven repayment plan is right for your needs.

See also: Best student loan repayment plans in 2021

Enroll in the graduated repayment plan

The graduated repayment plan is offered by the government on federal loans. This plan is ideal if you’re having trouble making monthly payments now, but expect your income to grow over time. Monthly payments start low and increase every two years. This increase will occur whether or not your income grows.

On the graduated plan, payments will never be less than the interest that accrued between payments and will never be three times more than previous payments. The repayment period remains at 10 years.

Related: PAYE vs REPAYE

Enroll in the extended repayment plan

The federal government offers an alternative to the standard 10-year repayment plan for federal loans. The extended plan allows students to increase their repayment period to up to 25 years. The longer repayment period lowers monthly payments. There is also the option to have fixed or graduated payments on this plan. 

To be eligible for the extended repayment plan, you must have at least $30,000 in debt. This is a good option if you’re struggling to stick to the 10-year plan, or if you’re hoping to lower your payments. Learn more about extended plans on the official government website. 

Enroll in autopay

Many student loan lenders offer a 0.25% discount on interest for enrolling in autopay. This allows the lender to automatically withdraw payments from your bank account. The discount may seem small, but it will save you money on interest over time. A reduced interest rate will lower monthly payments. 


Refinancing is trading your individual federal loans for a single private loan. This new loan often has a reduced interest rate, which will lower monthly payments. Refinancing also makes it easier to keep up with payments by only having one.

It’s important to note that refinancing may change your eligibility for relief or repayment programs offered by the government. For example, if you’re pursuing Public Service Loan Forgiveness, you will no longer be eligible if you refinance. 

Different lenders offer different rates, so be sure to evaluate all your options before choosing who to refinance with.

See also: How to pay off student loans

Apply for deferment or forbearance

A final option for lowering student loan payments is applying for deferment or forbearance. This also will prevent entering default if you’re struggling to make payments. Deferment and forbearance temporarily suspend or reduce payments. These options are only available in certain situations. 

See also: How to get your student loans deferred 

High monthly student loan payments can be stressful. It is possible to lower payments to make them more manageable. It’s also fairly simple to do so! When repaying your loans, stick to a budget or change your plan to reduce your payments.

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