Want to pay off your student loans? Design the perfect repayment plan for your needs, improve your financial position, and reach all your financial goals — with or without government relief.

This quick guide will help you figure out your best student loan repayment plan by answering just 5 questions.

1. Can your student loan be forgiven?

Student loans come in two flavors: federal student loans and private student loans.

Federal student loans are provided through the federal government. Your eligibility is determined by filling out a FAFSA every year: a Free Application for Federal Student Aid.

If you have a federal student loan, there’s a chance it may qualify for a student loan forgiveness program that could wipe your debt clean, but only if you and your loan can check all the right boxes.

If you think you might qualify, visit the official government website from the U.S. Department of Education to learn more.

Also, note that the Public Service Loan Forgiveness program made it easier to qualify for loan forgiveness as of October 6, 2021, but only for a limited time. Visit the official PSLF Waiver page to learn about those changes.

Private loans, on the other hand, are loans from private lenders like banks or other financial institutions. This kind of student loan debt isn’t funded by the government, so it doesn’t qualify for the government’s loan forgiveness programs.

2. Is your student loan currently paused?

As a result of the CARES Act, passed in March of 2020 to provide Americans with financial aid during the pandemic, federal student loans went into forbearance.

Borrowers stopped having to make student loan payments on federal loans, and those loans stopped accruing interest. 

On April 6, 2022, that deferment was extended through August 31, 2022, but you won’t benefit from an extension if you have a private student loan balance. Private loans weren’t frozen by the federal loan relief program because they aren’t federal loans.

3. Is your student loan your most expensive debt?

Just like student loans aren’t all the same, lines of credit aren’t the same either. Credit cards, for example, often come with high interest rates. They can cost you a lot in interest every month if you carry a high balance.

Federal student loans, whether subsidized or unsubsidized, tend to have fairly low interest rates. The rates for private student debt usually fall somewhere between federal student loans and most credit cards.

Why do interest rates matter? Whenever you borrow money, whether you’re taking out a student loan or buying something on a credit card that you’ll pay for later, you also have to pay interest on that loan above and beyond the amount you borrowed.

A lower interest rate means it’s costing you less to borrow that money.

If you’re carrying a balance on a credit card that has a higher interest rate than your student loan interest, you’ll want to pay down the credit card before you pay down your student loan.

That’s just as true of any other kind of loan, like a personal loan or a car loan.

Always make your minimum payments on all your loans, but if you have some extra cash you want to use to make additional payments, use it toward the loan that has the highest interest rate first.

4. Can you refinance your loan balance?

Student loan borrowers often graduate with a significant principal balance on their student loans and a long loan term. In other words, you owe a lot of money, but you also have a long time to pay it off.

That long repayment term keeps your monthly payments relatively low, but chipping away at your loan amount slowly, over years if not decades, can feel discouraging.

One way to get debt-free sooner is to look into student loan refinancing, but don’t refinance your loan just to get a shorter repayment term. There’s nothing stopping you from making extra payments and paying your loan down faster!

Instead, look into refinancing if you’re having trouble making payments, or, on the flip side, if your personal finances are looking up and you think you can get a better interest rate.

When you were a college student, your future ability to pay back your new loan was really just an estimate based on the fact that you were getting a higher education.

Once you’re working full-time, a student loan refinance can take your actual personal finances into account — including things like your income and credit score.

Ask your student loan servicer about your refinance or repayment options, especially if you have a great credit report and want to lower your interest rate.

5. What about loan consolidation?

Another way to lower your interest rate is through student loan consolidation, which can combine several federal student loans together into one payment.

Still, make sure you understand the terms of the consolidation before you agree to it. You don’t want to raise your interest rate or end up with an even longer repayment term.

If consolidation isn’t going to improve the terms of your loan, you’re better off sticking to a standard repayment plan:

  • Make all the minimum payments on every loan you’re carrying
  • Pay off the loan with the highest interest rate first by making extra payments when you can
  • Once that loan is paid off, use the freed-up cash to pay down the next loan faster
  • Keep repeating this until you’re left with only low-interest debt, then decide what you want to do next

Pay off all your debt faster with good financial tracking

The best way to make extra payments and pay your debt off faster is to track your monthly spending and look for places to save.

An app like Simplifi by Quicken makes it easy to see where your money is going, helping you stay on top of your spending in less than 5 minutes a week.

1. Save on subscriptions you don’t need

If you’re already using Simplifi, remember to check in on your bills & subscriptions list every few months to make sure you’re not paying for things you aren’t using. Most subscriptions are billed and paid automatically, making them easy to forget.

2. Decide what to pay down first

Use Simplifi to connect all your credit cards and loans so you can see them all in one place. Simplifi makes it easy to see how much you owe where, so you can decide where your extra savings will do the most good.

3. Track your debt-reduction goals

No matter which debt you decide to work on first, create a savings goal to track your extra debt payments. Celebrating your contributions along the way and seeing your progress add up can help you stay motivated.

4. Set aside the money for your monthly goal

It’s tempting to spend extra money instead of using it toward your long-term goals, and believe it or not, that’s okay — at least in moderation. Don’t sit out your whole life while you put every spare penny toward the future.

Strike a balance by deciding how much you want to use every month on extra payments to pay down your debt faster. Then earmark that amount in Simplifi by adding it to your spending plan so you won’t miss your target.

With those extra payments covered in your plan, you can even put them on autopay so they come straight out of your bank account every month.

Simplifi will keep up with the free cash that’s yours to spend so you can splurge without having to worry about it.

Life is full of opportunities — don’t let your student loans get in your way.

If you take control of your finances with a simple financial plan, you’ll have the flexibility you need to roll with surprises, grab new opportunities, and reach your financial goals with confidence.