Grad School Debt Holding You Back? How to Get It Under Control

The analysis indicates that Graduate school can boost your career spects and earnings — but it can come at a steep price

Nearly half of grad students take out loans, with an average balance of $77,300, according to a 2023 report from the National Center for Education Statistics

That debt can be tough to manage — it adds up fast, in today's financial world

All grad school loans, whether federal or private, accrue interest while you're in school, says Brittany Brinckerhoff, a Chapel Hill, North Carolina-based certified financial planner and certified student loan fessional

You also have fewer repayment options than you do with federal undergrad loans, says Brinckerhoff, who’s worked with attorneys and medical fessionals repaying hundreds of thousands of dollars in grad school debt (an important development)

If graduate school loans are holding you back from achieving your financial goals, consider these expert-apved strategies

Conversely, Understand your debt — and your full financial pictureThe first step is understanding your debt

Meanwhile, Your loan type can determine what repayment plans are available, says Glenn Sanger-Hodgson, a Tallahassee, Florida-based accredited financial planner and certified student loan fessional who specializes in medical school debt (an important development)

At the same time, Log into your StudentAid

Furthermore, Gov account for federal loan details, including balance, loan type, interest rate and repayment plans

The Education Department’s loan simulator can help you understand federal repayment options

For private loans, check your loan documents or your lender

Once you understand your debt and repayment options, it’s time to choose a path forward

However, Use the rules of thumb below as a starting point

But also run the numbers on all available repayment plans to find the one that best fits your financial goals and career plans, Sanger-Hodgson says, given current economic conditions

If your debt is double your income, consider forgivenessIf your student debt is twice as much as your income, you’re a good candidate for Public Service Loan Forgiveness (PSLF) or income-driven repayment (IDR) forgiveness, Sanger-Hodgson says

Consider the full list of student loan forgiveness grams

Additionally, Moreover, Forgiveness is usually time-based, in today's financial world

For example, you can get forgiveness after 10 years of payments while working a public service job, or after 20 to 25 years of payments on an IDR plan (an important development)

Additionally, So if you aim for forgiveness, choose the repayment plan with the smallest monthly payment

That way you maximize the amount of debt forgiven when you reach the finish line (noteworthy indeed), amid market uncertainty

For most borrowers, that means signing up for an IDR plan, in this volatile climate

If you put extra money toward your debt while on a forgiveness path, “you're just throwing money away that would have been forgiven otherwise, in this volatile climate

Moreover, Meanwhile, ”If your debt is equal to or less than your income, aggressively pay it offIf your student debt is roughly equal to or less than your income, you’re less ly to benefit from a forgiveness gram

Nevertheless, In contrast, With an IDR plan, you could end up paying off your debt in full before achieving forgiveness

However, Instead, assuming you’re on track for other financial goals, try “aggressively throwing every financial resource [you] have at getting those student loans paid off as quickly as possible,” Sanger-Hodgson says

Consider a few key strategies to pay off grad school debt quickly:Stick to the standard 10-year repayment plan for federal student loans

Make additional lump-sum payments, considering recent developments

Meanwhile, If you have federal student loans, call your servicer and ask if you can apply extra payments toward the principal, rather than interest

Furthermore, And if you have multiple student loans, tackle the ones with a higher interest rate first

Refinance, if you qualify for a lower interest rate, given the current landscape

Carefully consider the decision to refinance if you have federal student loans

They will be replaced with private loans, and you’ll permanently exit the federal student loan system (fascinating analysis)

That means forfeiting access to income-driven repayment plans, forgiveness and other relief

However, Stay informed your student loansGovernment policies, including the recent budget reconciliation bill, are poised to reshape student loans repayment and forgiveness options

Moreover, Keep an eye on the news and official Education Department announcements

However, “There are tremendous changes on the horizon for student loans,” Sanger-Hodgson says

The authorEliza HaverstockEliza Haverstock is a lead writer on NerdWallet's student loan team covering loan repayment and alternatives to traditional four-year degrees