5 Steps to Pay Off $400k in Student Loans - Credible News

If you have $400,000 in student loan debt, there are a few ways to potentially pay it off faster, including refinancing or signing up for an income-driven repayment plan.
Dori Zinn

Dori Zinn is a student loan authority and a contributor to Credible. Her work has appeared in Huffington Post, Bankate, Inc, Quartz, and more.

Read more” > Dori Zinn Edited by <a href="https://www.credible.com/blog/author/aharrison/" class="entry-meta__tooltip" data-tooltipjs="" data-tooltipjs-hover="true" data-tooltipjs-placement="top" data-tooltipjs-close-on-outside-click="true" data-tooltipjs-title="  Credible’s editing process includes rigorous fact-checking by experts to ensure that all content is accurate and up-to-date. This article has been reviewed, edited, and fact-checked by Ashley Harrison. As a Credible authority on personal finance, Ashley has covered topics that include student loans, personal loans, and more. Her work has appeared in Student Loan Hero and LendingTree.Read more” > Ashley Harrison Updated October 14, 2021
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Paying off $400,000 in student loans — such as from law or medical school — can be a major challenge.
For example, say you’re on a standard 10-year repayment plan with a 6.22% interest rate — the average student loan interest rate for graduate students. In this scenario, your monthly payments on a $400,000 loan would be $4,485, and you’d end up paying $138,217 in interest.
While it can be daunting to face such a large amount of debt, making a plan to tackle that debt is your first step to paying it off.
Here’s how to pay off $400,000 in student loans:

Refinancing your student loans is when you take out a new loan to pay off your old loans — leaving you with just one loan and one payment. Depending on your credit, you might qualify for a lower interest rate through refinancing, which could save you money on interest or even help you pay off your student loans faster.
Or you could opt to extend your repayment term to reduce your monthly payment and lessen the strain on your budget. Just keep in mind that choosing a longer repayment term means you’ll pay more in interest over time.
Here are Credible’s partner lenders that offer refinancing for $400,000 in student loans:
All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures | 6SoFi Disclosures
With Citizens, you can refinance $10,000 to $750,000 (depending on your degree and loan type) with repayment terms from five to 20 years.
If you already have an account with Citizens, you could get a 0.25% rate discount — plus another 0.25% off your rate if you sign up for autopay.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
CommonBond offers refinancing on loan amounts from $5,000 to $500,000 with terms from five to 20 years. Additionally, borrowers facing financial hardship can apply for up to 24 months of forbearance over the life of the loan.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Unlike many other lenders, ELFI doesn’t have a maximum loan amount — you just need a minimum of $15,000 to refinance. Repayment terms range from five to 20 years (five to 10 years for parent borrowers).
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
MEFA is another lender that has no maximum loan amount — you can refinance $10,000 up to the total amount of qualified education debt. Repayment terms range from seven to 15 years.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
With SoFi, you can refinance $5,000 up to the full balance of your qualified education loans — meaning you don’t have to worry about a maximum loan amount.
Additionally, SoFi borrowers have access to a variety of perks, such as unemployment protection, career coaching, and investing advice.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Learn More:
You’ll typically need good to excellent credit to qualify for refinancing — a good credit score is usually considered to be 700 or higher.
If you’re struggling to get approved, consider applying with a cosigner to improve your chances. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.
Check Out: When Student Loan Refi Is a Good Idea and When to Reconsider

If you have federal student loans, another option to manage a $400,000 balance could be signing up for one of the four income-driven repayment (IDR) plans.
Under one of these plans, your payments are based on your income, and you could have any remaining balance forgiven after 20 to 25 years, depending on the plan.
Here’s how IDR plans compare to a few other federal student loan repayment plan options:
If you’re wondering how long it’ll take to pay off your student loans, enter your current loan information into the calculator below to find out. Use the slider to see how increasing your payments can change the payoff date.
Enter loan information

If you increase your payments by $ monthly on your $ loan at %, you will pay $ a month and pay off your loan by Jan 2021.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Check Personalized Rates
Checking rates won’t affect your credit score.
Learn More:
There are several student loan forgiveness programs available for federal student loans. For example, if you work for a nonprofit or government organization, you might be eligible for Public Service Loan Forgiveness (PSLF) after making qualifying payments for 10 years.
Many loan forgiveness programs require that you work in a certain profession. Some occupations that might qualify for a forgiveness program include:
Check Out: How to Spot 6 Student Loan Forgiveness Scam Warning Signs

If you have multiple student loans, another option is to use either the debt avalanche or debt snowball method to decide which student loan to pay off first. Here’s how they work:
The debt avalanche method focuses on paying off the loan with the highest interest rate first. To use this method, follow these steps:
If you’re more motivated by small wins, you might want to use the debt snowball method instead.
With the debt snowball method, you’ll tackle your smallest loan first. To use this method, follow these steps:
However, if you have high-interest debt and want to save more money in interest, the debt avalanche method could be a better fit for you.
If you’re wondering how long it’ll take to pay off your student loans, enter your current loan information into the student loan repayment calculator below to find out. Use the slider to see how increasing your payments can change the payoff date.
Enter loan information

If you increase your payments by $ monthly on your $ loan at %, you will pay $ a month and pay off your loan by Jan 2021.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Check Personalized Rates
Checking rates won’t affect your credit score.
Here are a few other tips that might come in handy as you work toward paying off your student loans:
Learn More: Private Student Loan Repayment Options
Here are the answers to a few commonly asked questions about paying off student loan debt:
It’s difficult to have your student loans discharged through bankruptcy, but it’s not impossible. To potentially have your loans discharged, you must file for Chapter 7 or Chapter 13 bankruptcy, then file a separate action known as an adversary proceeding.
If the court determines that repaying your loans would cause an undue hardship, your loans might be:
How long it takes to pay off student loans depends on your repayment plan. For example, most federal student loans are automatically placed on the standard 10-year repayment plan, while private student loans can have terms ranging from five to 20 years depending on the lender.
If you want to change your repayment time, you could:
It’s usually a good idea to choose the shortest term you can afford to save as much as possible on interest.
If you have federal student loans, they could be forgiven after 20 or 25 years if you sign up for an IDR plan. There are also other federal forgiveness programs with varying times for forgiveness — for example, borrowers who qualify for PSLF will have their loans discharged after 10 years.
Private student loans don’t qualify for forgiveness after any length of time.
Learn More: Debt Relief Programs: Options to Reduce Debt
Generally, no. Federal student loans and many private loans are discharged upon the death of the primary borrower.
If a private lender doesn’t provide a death discharge, they’ll likely try to collect from any cosigners, then from the primary borrower’s estate. If your child cosigned your private loan, they could be responsible for it upon your death.
Keep Reading:
Dori Zinn is a student loan authority and a contributor to Credible. Her work has appeared in Huffington Post, Bankate, Inc, Quartz, and more.
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