• Student loan debt has exploded, with graduate degree holders owing up to $102,790
• Borrowers can explore options like refinancing, consolidating, or adding a cosigner to manage payments
• The 2025 One Big Beautiful Bill Act created “legacy” and “new” borrowers with different repayment options

The cost of getting an undergraduate degree and a graduate degree has exploded since the turn of the century. According to EducationData.org, the average graduate degree holder owes up to $102,790 in cumulative federal student loan debt, and for students in some professions who attend private schools, that number can be three or four times higher.

Paying off $150,000 in student loan debt can feel like a substantial undertaking, even for borrowers who are making above-average salaries. But it can be done and you have multiple options available.

Although not every option will be right for every borrower, you may discover that some options are ideal for your financial situation. You can even use different strategies together to maximize your progress and minimize your interest expenses. 

Consider refinancing your student loans

If you are on the Standard Repayment Plan, and you haven’t consolidated your loans (meaning you must pay them back in 10 years), your monthly payment will be approximately $1,700. You will end up paying $53,000 in interest, and your total lifetime cost will be $203,000.

If you consolidate your loans with a Direct Consolidation Loan, that lengthens your repayment term to 30 years, but in the example given above, it also increases your lifetime cost to $335,000. The advantage of federal loans is that you have access to repayment plans and loan forgiveness, whereas with private loans, you do not.

The upside of refinancing student loans is potentially finding a better term (whether that’s longer or shorter) and a lower interest rate. For the years between 2009 and 2022 when interest rates were at historic lows, refinancing with a private lender might get you a lower interest rate than your federal loans. But in the current rate environment, the likelihood of finding a lower rate is rare.  

Both private student loans and federal student loans can be refinanced into one private loan, which can simplify your payments. Another downside is that you may switch from a fixed interest rate to a variable interest rate (the lowest rates may have this feature), which means your interest rate could rise over time.

Consolidate your student loans

Similar to refinancing, you can potentially lower your interest rate by consolidating your student loans. Consolidation is a strategy that involves taking multiple loans from many lenders or servicers and replacing them with a single new loan under one servicer (ideally, one that has a better interest rate and terms). 

Another benefit is that you’ll only have to worry about making one monthly payment towards your total student loan balance. Federal student loans can be consolidated into Direct Consolidation Loans and Federal Consolidation Loans.

Federal and private student loans can also be consolidated into a single private loan. But it’s important to understand that any federal loans consolidated into a private loan will lose all federal benefits such as eligibility for forgiveness or repayment programs.

Add a cosigner

Borrowers with fair-to-poor credit scores may have trouble getting approved for a refinancing loan, but that doesn’t mean it’s impossible to secure. By adding a cosigner with a very good-to-excellent credit score, they could potentially receive a better interest rate and term. A cosigner provides a safety net for the lender if the borrower fails to repay their loan. 

Keep in mind that a cosigner is legally responsible for the loan until it’s fully repaid. Missed or late payments can significantly hurt the cosigner’s credit, so it’s important to give this option careful consideration before choosing it.

See if you’re eligible for an income-driven repayment plan

If you’re a federal student loan borrower, you may be eligible for an income-driven repayment plan. These plans are designed to reduce your monthly repayment to an amount that’s affordable based on your family size and income level.

But due to sweeping changes introduced by the One Big Beautiful Bill Act (OBBBA) in 2025, there are now two types of borrowers who have different options when it comes to income-driven repayment: “legacy borrowers” whose loans were all disbursed before July 1, 2026, and “new” borrowers who had any loan disbursed after July 1, 2026.

If you are a legacy borrower eligible for the older PAYE and ICR plans, you can apply for those plans until they sunset on July 1, 2028. If you are still on one of these plans by that deadline, your servicer will automatically switch you to IBR or the new RAP plan.

Consider student loan forgiveness

If you’re a federal student loan borrower, you may be eligible to have part or all your student loans forgiven, which means you won’t have to repay your balance. As noted above, both IBR and RAP offer loan forgiveness. 

Aside from this new program, the government also supports other forgiveness programs such as Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness (TLF). The One Big Beautiful Bill Act keeps Public Service Loan Forgiveness intact but alters the pathway for graduate borrowers.

To receive tax-free forgiveness, you must make 120 monthly payments while working full-time for a government or 501(c)(3) nonprofit employer. You must also use an approved income-driven repayment plan, which, as explained above, depends on when your loans were disbursed.

But beware of the “consolidation trap!” If you consolidate and choose the Standard Consolidation Repayment Plan (which stretches your payments out up to 30 years to lower the monthly bill), those payments do not count toward PSLF. You must actively choose an income-driven plan (like IBR or RAP) after consolidating to ensure the clock is ticking toward your 120 payments.

Pay more than the minimum every month

Paying more than the minimum each month has three benefits: you’ll lower your overall interest paid, you’ll finish paying off your loans earlier, and, if necessary, you can stop overpaying at any time and fall back into your minimum monthly payments without risking a missed or late payment because of financial strain.

For instance, if you owe $150,000 in student debt today at a 6.3% interest rate for a 10-year term, your minimum monthly payment will be $1,688. When the term ends in November 2036, you’ll have paid an overall interest payment of $52,580. Paying only $100 extra each month, you’ll save more than $4,400 in overall interest and you’ll shorten your term to end in 2035.

 Sign up for automatic payments

Setting up automatic payments could slightly decrease your overall repayment costs. Many federal and private loan servicers will give you a 0.25% discount if you sign up for automatic payments. In even better news, the U.S. Department of Education recently quadrupled the benefit to 1.00% on July 1, 2026.

The overall savings may be minimal — a $20,000 10-year loan with a 5% interest rate would minimize your debt by $293, or $1,172 under the new federal plan — but there’s another reason why this option is a responsible choice.

Autopay prevents you from missing a monthly payment. Because even a single late or missed payment could damage your credit and loan standing as well as your timeline for forgiveness. Setting up automatic payments is a financially responsible decision regardless of the potential savings. 

Make biweekly student loan payments

Paying your minimum monthly payment will keep your overall interest accrued from rising. Any additional payments you make during that same month can lower the amount of interest you accrue. 

Make biweekly payments if possible, even if the additional contributions are lower than the minimum monthly payment amount. These extra payments will lower your principal, which will then lower the interest you’ll accrue the following month.

Adjust your budget

Before you commit to options like refinancing or consolidation to lower your loan repayments, first take a look at your monthly budget. Viewing your monthly income and expenses on paper can help you identify areas where you can cut costs. 

Costs need not be significant to make a difference. Any amount of money that you can save to put towards your monthly loan repayment will help you pay them off quicker and ultimately lower the overall interest you pay.