two happy students walking and talking each other in university campus after classes

How to Prepare for Student Loan Repayment

If you’ve been asking yourself when student loan payments resume, we finally have the answer. Student loan payments are officially beginning (again) on October 1st. This will be a big financial change—especially if you’re one of the many Americans who haven’t had to make payments for a while, but that relief is coming to an end soon. With just two months to go, now is the time to prepare your budget. 

How to Prepare for Student Loan Repayment

If you’ve been stockpiling your normal student loan payment in a savings account, that’s great! But for most people, the payment pause has given them a welcome reprieve. So, in light of student loan repayment coming up, here are a few tips to help you prepare your finances: 

1. Budget

A budget will be your new best friend in preparing for student loan repayment. Depending on your student loan repayment plan, you may or may not have the margin to make those payments. Doing a budget now will help you determine what sacrifices you need to make to ensure that you can afford your new payment later.  

2. Save

From this moment, there are still two months to go until that extra payment kicks in. You still have eight weeks to save what you can to offset the changes in your monthly budget. Anything you can save now will help you make those payments. Trust us, your future self will thank you!

3. Add another stream of income

If the numbers just aren’t working, you might need to add another stream of income. Look for a side hustle, a part-time job, or pick up odd jobs on the weekends. 

4. Look at your repayment options.

When student loan servicers come knocking, we can often feel backed into a corner with payments. But it doesn’t have to be that way—there are other options! If you can’t afford your payment, you might want to consider student loan consolidation or even an income-driven repayment plan. Now is the time to start researching all your options. 

Student Loan Repayment Options

Depending on your exact situation, you may be expecting to pay your loans with standard repayment, graduated repayment, extended repayment, or income-driven repayment. The Department of Education is offering a one-time income-driven account adjustment . . . but more on that in a second. 

Here are a few options that might help you as you prepare for your student loan payment this Fall:

Student Loan Consolidation

Student loan consolidation is for those with federal student debt looking to roll multiple payments into one with one interest rate. A Direct Consolidation Loan will take the weighted average of your federal loans’ interest rates and round up to the nearest one-eighth of one percent.1  Consolidating your loans will potentially give you a lower monthly payment (but will likely increase the number of years you’re in debt).

Income-Driven Repayment Plans

Once you consolidate your loans, you’ll have access to relief programs like an income-driven repayment plan. These plans help you lower your monthly student payment by taking your income and family size into account. There are different income-driven repayment plans out there, but they’re all focused on helping you find an affordable payment so you can continue to provide for your family.   

Income-Driven Repayment Account Adjustment

Recently, over 804,000 student loan borrowers found out that their loans would be forgiven because of a one-time income-driven repayment account adjustment through the Department of Education.2 Review your Federal Student Aid account to see if you qualify. If your loans are forgiven under the adjustment, you’ll receive an email or a letter in the mail before the next adjustment takes place in September. 

The SAVE Plan

Thankfully, the Biden Administration launched a brand-new student loan repayment plan called the Saving on a Valuable Education (SAVE) plan which will partially begin later this summer. Additional benefits of the SAVE plan will roll out on July 1, 2024. 

This new income-driven repayment plan will calculate your student loan payment amount based on how much income you earn coupled with the size of your family. Most notably, the SAVE plan increases the income exemption plan from 150% to 225% of the poverty line.1 And if you’re currently on the Revised Pay As You Earn (REPAYE) plan, you’ll automatically be enrolled in the SAVE plan. 

Here’s what you can expect to roll out this summer2

  • If you make less than $32,800, your new monthly payment will be $0. 
  • If you make more than $32,800, you’ll save at least $1,000 per year on loan payments.
  • Interest accrued on both unsubsidized and unsubsidized loans will be eliminated after a scheduled payment is made under the new plan.
  • If you’re married and filing your taxes separately, your spousal income will be excluded (which means a lower payment for you).

Beginning next summer, here are a few more benefits you can expect3:

  • Payments from undergraduate loans cut in half. 
  • For those with both undergraduate and graduate loans, your payment will be based on a weighted average of your income and original loan balances.
  • If you’re more than 75 days late on a payment, you’ll automatically be added to the program. 

To learn more about all of the SAVE plan benefits coming next July, click here.  

Don’t let your student loan payments follow you around forever. Whether you qualify for an income-driven repayment plan or not, you can pay your loans off faster in order to reach your other life goals . . . like planning for retirement. A financial advisor at SageSpring Wealth Partners can help you make a plan to reach your financial goals. Contact a SageSpring advisor today!

Jeffrey Dobyns
Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Jeff Dobyns is President and Founder of SageSpring Wealth Partners. Passionate about serving his clients, he strives to truly get to know them, understand their goals, and provide them with financial confidence before developing and executing ongoing, strategic financial plans. 

In order to meet the highest standards of professionalism and ethics in the industry, Jeff is a CERTIFIED FINANCIAL PLANNER™ professional, a Chartered Life Underwriter, a Chartered Financial Consultant, and a participant of the Dave Ramsey SmartVestor referral service program.

Jeff has held executive positions with financial planning firms for more than two decades. He served as VP of Investments of Lykins Financial Group CPAs before founding SageSpring in 2002. Jeff has been recognized for his unwavering commitment to his clients, and as a leader among Raymond James financial advisors, earning membership in Raymond James Chairman’s Council every year since 2008.

Jeff devotes considerable time and resources to a number of causes. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. He is on the advisory board of The Signatry of Middle Tennessee, which works with families to increase their charitable giving to their favorite causes, as well as the advisory board for Halftime Institute of Nashville, an organization that coaches marketplace leaders to discern and engage in their life purpose. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. He is a past board member of Porter’s Call, a Nashville charity that provides free counseling for musicians and their families, and the Martha O’Bryan Center, which empowers those in poverty to transform their lives through work, education, employment, and fellowship.

Jeff and his wife, Amy, are grateful to be raising their four children, Gracyn, Hunter, and twins Tanner and Logan at Christ Presbyterian Academy. Jeff enjoys being outdoors with his family- boating, hiking, skiing, hunting and fishing.

Ramsey Solution’s relationship and agreement is between SageSpring Wealth Partners only. Raymond James Financial Services, Inc. is not affiliated with the solicitor arrangement between Ramsey Solutions and SageSpring Wealth Partners.

Membership is based on prior fiscal year production. Re-qualification is required annually.  The ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of an advisor’s future performance. No fee is paid in exchange for this award/rating.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.