How to Fit Your Student Loan Payments Back in Your Budget

After a multi-year pause during the pandemic, federal student loan payments resumed in October 2023. For many borrowers, this meant reintroducing a significant monthly expense. Even a few years later, those payments may still be putting pressure on your budget. Here are some practical steps you can take to regain control.  

Evaluate your financial picture

Start with a simple monthly cash flow snapshot (use your take-home pay, not gross income):

Household Income ______

Less: Current Expenses______

Less: Monthly Student Loan Repayment ______

Remaining Income______

Note: You can find your student loan servicer and how much you owe by visiting https://studentaid.gov/  

When listing out your current expenses, be as detailed as possible. That streaming platform that you never watch anything on and forgot to cancel your membership for? That goes into your budget too (or cancel it!)

Take a look at the remaining income you have. Consider putting this towards your high interest student loan debt, credit card debt, funding your emergency fund, or increasing your contributions to your employer sponsored retirement plan.  

If the remaining income feels tight, consider taking a deeper dive into your monthly budget to see what, if anything, can be cut down or cut out. Cut Down or Cut Out Expenses Let’s start by reviewing the last 2 – 3 months of spending. Pull up your credit card statements, bank transactions, and even your Amazon account. Identify:

• Fixed expenses (rent, utilities, insurance, etc.)
• Variable expenses (groceries, dining out, entertainment, etc.)
• Automatic subscriptions you may have forgotten about  

It’s never an easy conversation with your partner, let alone yourself, to eliminate the conveniences that we are accustomed to. We know this is hard but try and think of these changes as temporary sacrifices that strengthen your long-term financial health.  

Know Your Options 

If your federal student loan payments are still too high compared to your income, you may want to repay your loans under an income-driven repayment option. Most federal student loans are eligible for at least one income driven repayment plan. An income-driven repayment plan or IDR sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. You can find the application at https://studentaid.gov/idr/  

Rebuilding your budget may take a few adjustments, but small, consistent steps can create long-term stability. If you’d like help reviewing your retirement contributions or overall financial strategy, your plan’s dedicated retirement planning specialist is available to you at no additional cost.  

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