Set My Repayment Goals

What’s the best student loan repayment plan?

It’s easy to get lost in the maze of student loan repayment options. Finding the right plan requires you to determine your priorities, needs, and goals. Completing the three short exercises on this page will set you up for success.

Exercise 1:

Identify Your Priorities and Needs

Exercise 2:

Find Your Maximum Affordable Payment

Exercise 3:

Create a Goal

Quick Tip: Make a Cheat Sheet

We suggest recording your answers for each exercise. Having your responses on-hand will give you a quick reference when evaluating repayment plans or explaining your situation to loan counselors and support representatives.

Exercise 1: Identify Your Priorities and Needs

Answer the following questions to decide what’s most important to you in a repayment plan. Each one pertains to different aspects of various programs.

These questions help prioritize your wants and needs:

  • Do you need to temporarily pause your payments or lower your monthly payments to an affordable amount?
  • Is your top priority lower monthly payments or long-term savings?
  • Do you want to tie your monthly payments to the size of your income or do you prefer fixed payments that never change?

If you answer yes to these questions, you may qualify for special programs:

  • Are you a teacher?
  • Are you employed full-time by a local, state, tribal or federal government?
  • Are you employed by a non-profit foundation or company (often referred to as a 501(c)(3))?
  • Are you on active-duty military service?
  • Are you currently unemployed?
  • Are you currently enrolled in school at least half-time?
  • Are you undergoing treatment for cancer?
  • Are you totally and permanently disabled?
  • Are you enrolled in a vocational, drug abuse, mental health, or alcohol abuse program?
  • Are you in a graduate fellowship program?
  • Are you a parent who took out a Direct PLUS Loan to pay for your child’s education?

Exercise 2: Find Your Maximum Affordable Payment

Find your “maximum affordable payment” (MAP) range by following the steps below. This is the upper limit of what you can afford to pay on a student loan each month.

  1. Estimate your gross monthly salary (before taxes and benefits are deducted).
  2. Multiply your gross monthly salary by 8% to find the low end of your MAP.
  3. Multiply your gross monthly salary by 10% to find the high end of your MAP.
  4. Record the high and low end of your MAP. If your budget won’t allow for a payment within this range, write down what you think you can afford.

Exercise 3: Create a Goal

Use your answers from Exercise 1 and Exercise 2 to write a goal for your loan repayment. You’ll use this statement to identify which category of repayment plans to investigate.

Start your statement with “I want…” and write a statement similar to the ones below:

  • “I want a long-term solution that will lower my monthly payments.”
  • “I want a short-term solution that temporarily pauses my payments.”
  • “I want to pay my loans off as quickly and cheaply as possible.”
  • “I want loan forgiveness or the lowest monthly payment possible.”

Armed with a list of your needs, your MAP range, and a goal statement, you’re ready to research and select a repayment plan that fits your needs.