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Can You Afford Your New Student Loan Bill? Do This Before Choosing a Repayment Plan

G. Brian Davis

Sun, September 20, 2026 at 8:00 PM GMT+3 3 min read

At the end of September, the first wave of student loan borrowers will lose access to the Biden-era SAVE plan, and must choose a new payment plan. Fail to do so, and the government will automatically choose one for you.

Follow these steps as you switch to a new repayment plan.

Don't Guess — Check Your Exact Payment Options

By logging into your StudentAid.gov account, you can run the numbers for your own loan using the Repayment Calculator. It pulls your loan data and displays your payment plan choices with monthly payments, total repayment costs, interest and projected payoff dates

Bear in mind that not everyone has the same choices. Depending on the type of federal loan and when you borrowed it, you could see different options.

As of July 1, 2026, the new Tiered Standard plan and income-driven Repayment Assistance Plan (RAP) are available. Tiered Standard provides fixed terms of 10, 15, 20 or 25 years, depending on how much you owe. The RAP bases payments on your income and dependents.

Run the Numbers Through Your Real Budget

To calculate whether a monthly payment fits your budget, you need to actually calculate your budget. Unfortunately, most Americans don't have a detailed grasp of their exact spending in each category.

Sure, your budget includes regular recurring expenses like housing, car payments, insurance and subscriptions. But it also includes fluctuating expenses like gas, groceries, entertainment and meals out, travel and discretionary. Even harder for most people to calculate accurately, it includes irregular but inevitable expenses like car repairs, gifts and the like.

When in doubt, estimate much higher than you think the actual numbers are. You simply won't remember every single cost you incur every year, so give yourself some buffer for unexpected expenses.

Choose a Payment

If you can comfortably pay the Tiered Standard payment, do that. It creates a predictable monthly payment with a set payoff date.

If you absolutely can't make ends meet with the standard payment, look into the income-driven RAP. But don't choose this option simply because it lets you drive a better car or go out to dinner more often.

"It's better to delay many of life's milestones as long as possible while focusing on the paying off student loan debt," said Charles Hoff, Financial Literacy Counselor at DFCU Financial. "The exception is matching retirement contributions from your employer — find a way to take advantage of any free retirement money offered."

Hoff also said borrowers to pay off any credit card balances and then private student loans, before funneling extra money to pay off federal loans. Federal loans offer more flexibility, and usually lower interest rates.

Confirm the Payment Before Setting up Autopay

Don't assume the Repayment Calculator got your monthly payment exactly right to the penny. Confirm the monthly payment with your loan servicer before setting up autopay.

As for the payment date, aim to schedule it the day after each of your paydays. That might mean setting up biweekly payments instead of monthly. That can actually work in your favor: if you make a half-month's payment every two weeks, you'll make 26 half-month payments for a total of 13 monthly payments a year, paying down your balance faster but painlessly.

The Department of Education announced that some borrowers who enroll in autopay by September 30, 2026 can qualify for a one-percentage-point discount on their interest through June 30, 2028.

Cover All Your Bases

As a final thought, make sure you keep a solid cash cushion so that unexpected bills don't derail you. Aim for at least three months' living expenses in an emergency fund, which you can gradually build up to six months over time.

Editor's note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on MoneyLion.com.

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

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