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$200K in Student Loans: 7 Steps for Paying Off Student Loan Debt

$200K in Student Loans: 7 Steps for Paying Off Student Loan Debt
Melanie Lockert
Melanie LockertUpdated November 8, 2022
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You took out student loans to pursue your dream of going to college and getting a degree in the field of your choice. Maybe you’ve obtained a graduate degree–and now you have 200k student loan debt. Having six figures of student loan debt can feel insurmountable. In this guide, find out how to pay off $200,000 in student loans. 

When Student Debt Is in the Six Figures

If you borrowed $200,000, your student loan monthly payment will be very high if you stick to the Standard Repayment Plan. In that plan, you pay off loans over a 10-year period. Your monthly payments could be over $2,000 a month. For many people, that’s a good chunk of their take-home pay. According to, there are 43 million federal student loans borrowers. Out of that total, as of Q2 2022, 1 million federal student loan borrowers owe $200k student loan debt or more. If you’re in this boat, it can feel stressful. Below is how to make student loan repayment possible.

7 Steps for Paying Off $200K Student Debt

Figuring out how to pay off 200k in student loans can feel out of reach, but following these seven steps can help you create a plan to get started. 

Step 1: Find Out Exactly How Much You Owe

Although you may know your student loan balance is $200,000, the actual balance is likely different due to interest.. Additionally, if you took out different types of loans, you want to know how your total debt is divided up between private and federal student loans.

Federal Loans 

To review your federal loan balance, you can check with your loan servicer. You can also check out the National Student Loan Data System (NSLDS). Federal student loans come with a variety of repayment plans plus forgiveness options. 

Private Loans 

Private student loans don’t come from the U.S. Department of Education. Generally, they’re offered by online lenders and other private financial institutions. To find out how much you owe in private loans, log in to your account to see your balance. If you forgot who your lender is, check your monthly statement or log into

Step 2: Create a Budget 

Tackling $200k student loan debt isn’t an easy feat. To understand what you’re working with and how you can put more toward your monthly payments, create a budget. As part of this process:
  • Review take-home pay
  • Look at monthly, quarterly, and annual expenses
  • See what expenses you can get rid of or lower 
  • Allocate an amount for each budget category
  • Don’t forget to include monthly debt payments, plus savings and retirement
  • Monitor your spending to see if you’re on track with your budget 
A budget helps you understand how you’re spending your money. It can also show you how much you have left over so you can put the extra amount toward your loan balance. 

Step 3: Increase Income 

Unfortunately, there are no shortcuts to paying off $200,000 in student loans and one of the things you likely need to do aside from budgeting and managing expenses is to increase your income. Earning more can mean having more funds available to pay off student loan debt. Some options to increase income include:
  • Negotiating your current salary
  • Seeing if you can work over-time or on holidays for additional pay
  • Getting a side hustle like dog walking via Rover, freelancing using your existing skills, working catering for events, and more 
Negotiating your salary may feel scary but it’s the easier way to earn more and get paid for what you’re currently doing. If taking on a side hustle, evaluate your skills, and the time and energy you have available. 

Step 4: Prioritize High-Interest Student Loans 

Paying off a student loan is tough, especially because of the interest that accumulates. If you took out Grad PLUS loans for a graduate or professional degree, it’s likely you have a high interest rate. PLUS loans have the top rates compared to other federal loans. When you look at how much you owe and the various student loans you have, look at the interest rates. By focusing on repaying high-interest loans first, you can lessen the amount of interest that grows. This strategy is called the Debt Avalanche method. Pay all of your minimum monthly payments, and throw extra available funds toward the loan with the highest rate. Continue through this process until all your loans are paid off. 

Step 5: See if You Qualify for Any Kind of Student Loan Forgiveness

Feeling like 200k in student loans is simply too much? If they’re all or mostly federal loans, you can look into loan forgiveness options. 

Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness is designed for workers in the public sector. Federal loan borrowers who work for an employer like a nonprofit or federal government agency may qualify. You must make 120 payments and serve for 10 years. At the end of that timeframe, you can apply for PSLF and get all remaining loans wiped out, tax-free. 

Student Loan Forgiveness for Healthcare Professionals

Did you get 200k student loan debt from going to medical school? Healthcare professionals such as doctors, nurses, and more may be eligible for certain student loan forgiveness programs. States may offer loan repayment programs for healthcare professionals who are willing to work in a rural area and serve for a period of time. You can find options via the Health Resources & Services Administration. 

Student Loan Forgiveness for Teachers

Teachers may be able to score $5,000 or $17,500 in student loan repayment cancellation via the Teacher Loan Forgiveness Program. To qualify, you need to work at an eligible school and serve for five years on a full-time basis. 

Step 6:  Look Into Different Kinds of Repayment Plans

The $200k student loan monthly payment can feel like a huge burden. It might feel like you have no money left over for other expenses or you have to make tough financial decisions. In that case, it makes sense to look into different repayment plans. 

Income-Driven Repayment Plans

Federal loan borrowers trying to figure out how to pay off 200k in student loans can look into lowering payments through an income-driven repayment plan. Talk to your loan servicer to see which plan you may be eligible for. Generally, you pay 10 or 20 percent of your total discretionary income under Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). The best part is that after paying under IDR for 20 or 25 years, depending on the plan, the rest of your loans are discharged or forgiven. Be aware, that depending on the tax law at the time, this type of forgiveness may come with tax consequences. 

Student Loan Deferment

Currently, federal loan borrowers have not needed to make payments under the COVID forbearance, which is now extended until the end of 2022. But as repayments resume, you can look into student loan deferment as a temporary option. This way you can put monthly payments on hold for a period of time. However, this is more of a Band-Aid and not a long-term solution. Going on an Income Driven Repayment Plan (IDR) may be better for the long term. 

Step 7:  Consider Refinancing to a Lower Rate

Paying off $200k student loan debt is a lot and with the average student loan interest rate, it can grow quickly. To make matters worse, you’re stuck with your loan servicer and your interest rate. One way to change things up and obtain a lower rate is through student loan refinancing. Refinancing lets the borrower apply for a new loan that may have a better rate and different terms. 

Pros and Cons of Refinancing Private Student Loans

Private loan borrowers can enjoy student loan refinancing without as much risk as federal loan borrowers. Since private loans don’t offer forgiveness options, there’s less to lose. Pros: 
  • May save money on interest with a lower rate
  • Work with a new lender you may like better
  • You can also sign up for a different term that can change your monthly payment that fits your needs
  • Less risky as not losing out on forgiveness benefits 
  • You must qualify and generally have good credit to obtain a lower rate
  • May need to have a certain income to qualify 

Pros and Cons of Refinancing Federal Student Loans

Student loan refinancing is much riskier for federal loan borrowers. Federal loans have income-driven repayment plans plus certain programs for forgiveness. There’s also the COVID-19 forbearance and loan cancellation. Refinancing turns these federal loans into a new private loan. In other words, you’ll miss out on these important protections. Here are refinancing a student loan pros and cons.Pros:
  • Potentially lower interest rate
  • Pay less in interest over life the of the loan
  • Ditch loan servicer 
  • No longer qualify for forgiveness programs
  • Income-driven repayment isn’t available 
  • Refinancing lenders may not have as many student loan deferment and forbearance options 

The Takeaway

Having $200k student loan debt can feel heavy and greatly impact your financial life. Getting a hold on your numbers and maximizing your budget and boosting income can help. Of course, pursuing forgiveness through programs you’re eligible for can be a huge relief. If that’s not an option or route you’re considering, you can also lower the rate through refinancing. Taking these steps can help you map out how to pay off $200k in student loans. 

3 Student Loan Refi Tips

  1. Once the pandemic-related pause on federal student loan payments ends, going back to making payments may be hard on budgets. One solution is to refinance to a lower interest rate, longer loan term, or both, depending on your situation. (The tradeoff is that you’ll be forfeiting federal benefits such as repayment programs.)  Find and compare your student loan refinance options.
  2. Paying extra each month on your student loan can reduce the interest you pay and so lower your total loan cost over time. (The law prohibits prepayment penalties on federal or private student loans.)
  3. Depending on their income, qualified borrowers can deduct the interest they pay for student loans, both federal or private, up to $2,500 per year. The deduction phases out for modified adjusted gross incomes of $70,000 to $85,000 for single individuals and $140,000 to $170,000 for people married and filing jointly.

Frequently Asked Questions

Is $200,000 in student loans a lot?
Is there a maximum amount of student debt you can have?
Can you get $200,000 in student loans forgiven?
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Photo credit: iStock/FG Trade

About the Author

Melanie Lockert

Melanie Lockert

Melanie Lockert is the founder of the blog and author of the book, Dear Debt. Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Business Insider, VICE, Allure, and more.
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