Understand Your Options and Make a Plan
Student loans can feel overwhelming, especially when you hear constant news about repayment changes, forgiveness programs, and new government rules.
But for most people with federal student loans, the basic strategy doesn’t have to be complicated:
Understand your repayment options, see whether you qualify for forgiveness, choose a plan that works with your budget, and start paying down the debt.
There may not be a magic solution—and that’s okay. What matters is having a plan.
Start With Your Federal Student Loans
Before deciding what to do, log into your Federal Student Aid account and understand:
- How much you owe
- Your interest rates
- Your current monthly payment
- Which repayment plans are available to you
Federal repayment options are changing, and the plans available to you can depend on when you borrowed and the type of federal loans you have.
In general, think about your choices in three categories:
1. Standard Repayment
The traditional approach is straightforward: make scheduled payments designed to pay off the loan over a defined period.
For borrowers who can comfortably afford the payment, this may be the simplest approach—and paying the debt faster generally means paying less interest over time.
2. Tiered Standard Repayment
The new Tiered Standard Plan is another fixed-term approach. Payments are based on the amount borrowed and increase over the repayment period.
This can provide a lower payment initially, but remember an important principle:
A lower monthly payment doesn’t necessarily mean the loan costs less.
Taking longer to repay debt can mean paying more interest.
3. Repayment Assistance Plan (RAP)
The new Repayment Assistance Plan, or RAP, bases payments primarily on income rather than simply on how much you borrowed.
For someone whose student-loan debt is high compared with their income, an income-based approach may make the monthly payment more manageable.
The federal government provides a Repayment Calculator that can show which plans you’re eligible for and estimate your monthly and total payments.
Federal Student Aid Repayment Calculator
What About Student Loan Forgiveness?
There are specific federal forgiveness and discharge programs, but most borrowers shouldn’t build their financial plan around the assumption that their student loans will simply disappear.
One important exception is Public Service Loan Forgiveness (PSLF).
If you work full-time for an eligible government or nonprofit employer, you may qualify to have the remaining balance of eligible Direct Loans forgiven after the equivalent of 120 qualifying monthly payments while meeting the program requirements.
If you work in public service, it’s worth checking.
Learn About Public Service Loan Forgiveness (PSLF)
Coaching Moment: Sometimes You Simply Have to Pay the Debt
It’s natural to look for a better deal, a forgiveness program, or another way out of student debt.
And you absolutely should understand every legitimate option available to you.
But after you’ve done that, the answer for many borrowers may simply be:
Choose the best repayment plan for your situation and start paying down the debt.
Think of student loans as part of your overall financial plan—not as a separate financial crisis.
Your student-loan payment needs to coexist with your housing, groceries, transportation, emergency savings, other debts, and long-term goals.
That’s where having a budget becomes so important.
One Action Step
This week, log into your Federal Student Aid account and find out exactly what you owe and which repayment options are available to you.
Then ask yourself:
Which payment can I realistically afford—and which plan helps me accomplish my long-term financial goals?
Don’t choose a plan simply because it offers the lowest monthly payment. Look at the bigger picture, including how long you’ll be paying and how much you may ultimately pay.
Need Help Figuring It Out?
You don’t have to sort through all of these choices by yourself.
myWealthBeing offers free one-on-one financial coaching where we can sit down with you, review your student loans, look at your budget and cash flow, and help you understand how your repayment options fit into your overall financial plan.
We won’t make the decision for you.
We’ll help you understand your choices so you can make an informed decision that’s right for you.
Schedule a personalized appointment with myWealthBeing and let’s build a plan together. 💚