5 Tips to Manage Your Student Loan Debt Without Wrecking Your Budget
With federal student loan payments resuming earlier this year after a 43-month pandemic-related pause, millions of Americans are once again facing the challenge of managing this significant expense. This restart added a substantial line item back into household budgets, as collections on defaulted federal loans have resumed. With nearly one in four borrowers already behind on payments, according to a May report from the Federal Reserve Bank of New York, it is more important than ever for individuals to reassess their financial strategies to handle this debt.
Simplicity is key when it comes to managing personal finances, and that includes paying off your debt. Whether you are a recent graduate just finishing your grace period or a borrower struggling to get back on track, developing a clear plan is key to managing your debt. From the basics of building a monthly budget to exploring specific income-driven repayment plans, there are several strategies that can help you manage your monthly payments.
1. Review your budget. Review your budget to identify any areas where you may need to adjust your spending habits to accommodate your payment plan. Once your list of essential expenses is made, you’ll want to list out all non-essential spending and expenses – and be honest with yourself – eating is essential, eating out at a restaurant is not. If you find that your new payment will cause a strain on your monthly budget, you’ll want to take a hard look at what non-essential expenses you may need to cut.
2. In a grace period? Start preparing now. If you’re a recent graduate in a grace period, start putting the total monthly payment into a savings account to get used to the monthly expense. Not only could you possibly earn a small amount of interest on it, but you’ll be able to transfer that “payment” more easily to your actual payment when it starts up. This approach is one way to reduce the “shock” to your budget when you prepare for a new monthly payment.
3. Set a payoff goal. There are loan-simulator tools available at StudentAid.gov that can help you find a payment plan that best fits your needs. The key is to pay attention to the long-term costs that come with each plan. Much like any type of debt, the longer your repayment period, the more you’ll pay in interest. Going with the lowest-monthly payment option may seem more doable depending on your budget, but it’s important to calculate the cost over the life of the loan before making a decision. This is when forgoing non-essential spending in order to pay a little extra money a month will benefit you in the long run.
4. Pay extra on the loan. If you get extra income through a second job, a bonus or tax returns, consider putting that toward repaying your loan. While it might be tempting to spend it on a dream vacation, consider how paying extra will help you in the long run. The same can be said for any other debt you may have.
5. Set up automatic payments. To avoid late fees and for peace of mind, set up automatic bill payments to ensure your repayment stays on track. You can set those up through your loan servicer or your bank. And if you were already putting aside that “payment” in another account in anticipation of your payment plan to begin, you could use that account to set up automatic payments. Don’t get too caught up in the “set it and forget it” rule, though, because you may want to reevaluate your ability to repay your loan as your financial situation improves.
Student Loan Borrowers Struggling with Payments
If you’re a student loan borrower who has been struggling to make your monthly payments, it’s important to take a closer look at your budget and research repayment options.
- If you have federal student loans, explore repayment plans at StudentAid.gov, including income-driven repayment plans.
- If you have a private loan, talk with a lender about refinancing or consolidation options.
- Build a monthly budget that prioritizes your student loan payment along with other essentials.
- Be honest with yourself about what is essential vs what are “wants.”
- Research loan forgiveness programs that are available for qualified borrowers.
Kevin Cerveny is the consumer lending sales manager for Arvest Bank - Greater Kansas City and can be reached at kcerveny@arvest.com.
With more than $27 billion in assets, Arvest is a full-service bank that delivers financial solutions to individuals and businesses of all sizes. Since entering the Kansas City market in 2009, Arvest has grown to a top 20 bank and the sixth largest mortgage lender in the metro. The bank has 20 locations in the metro area. Arvest is an Equal Housing Lender and Member FDIC.
This story was originally published November 25, 2025 at 12:31 PM.