How much of your monthly budget will a federal student loan payment take?
Summary
That depends less on what you owe than on the plan you choose. On a $30,000 balance, the Education Department puts the 10-year Standard payment at $341 a month and the Tiered Standard payment at $262, while the Repayment Assistance Plan (RAP) ignores the balance and bills a single borrower earning $45,000 about $150. The lower payments stretch repayment out, and a longer schedule usually costs more in total.
Three payments on the same $30,000
- 10-year Standard Plan (loans from before July 1, 2026): $341 a month, $40,920 over 120 payments
- Tiered Standard Plan: a $30,000 balance falls in the 15-year tier, so $262 a month, $47,160 over 180 payments
- RAP: 4% of a $45,000 AGI is $1,800 a year, or $150 a month, recalculated every year as income changes
Measured against $3,750 a month, which is that $45,000 AGI divided by 12, those are 9.1%, 7.0%, and 4.0% of pay. The Tiered Standard Plan saves $79 a month and costs $6,240 more by the end. StudentAid.gov warns that lower payments or a longer term will likely mean more interest paid, sometimes significantly more.
What RAP takes at other incomes
RAP bills a percentage of AGI divided by 12, minus $50 for each dependent, with a $10 floor.
| AGI | Rate | No dependents | Two dependents |
|---|---|---|---|
| $35,000 | 3% | $87.50 | $10.00 |
| $45,000 | 4% | $150.00 | $50.00 |
| $60,000 | 5% | $250.00 | $150.00 |
| $80,000 | 7% | $466.67 | $366.67 |
Because the payment follows income and not the balance, a borrower with a large balance and a modest income can owe less each month than someone with half the debt. On RAP, a full, on-time payment also brings a waiver of any interest the payment does not cover, and a government match if principal falls by less than $50, so the balance does not grow.
What a missed payment costs, day by day
The day after a missed due date, a federal loan is delinquent. A RAP borrower also loses that month's interest waiver and principal match. Once it reaches 90 days, the credit bureaus hear about it. At 270 days, a Direct or FFEL loan is in default, and the whole balance plus interest becomes due at once. Tax refunds and federal benefits can be withheld, wages can be garnished, and the borrower loses access to deferment, forbearance, and the choice of repayment plan.
Delinquency ends when you pay the past-due amount or make another arrangement, such as a new repayment plan, a deferment, or a forbearance. If your income drops while you are on an income-driven plan, you can recertify early instead of waiting for the annual date.
Paying extra in a good month
There is no prepayment penalty on federal student loans, and paying more than the amount due cuts the interest you pay over the life of the loan. Without instructions, a servicer such as Edfinancial sends the extra to your highest-rate loan and pushes that loan's due date forward. On RAP, part of the extra can replace interest the government would have waived. Auto pay earns a lower interest rate as well as keeping payments on time.
Sources
- U.S. Department of Education, ed.gov/about/news/press-release/fact-sheet-trump-administration-simplifying-st…
- Federal Student Aid, studentaid.gov/announcements-events/big-updates/definitions
- Federal Student Aid, studentaid.gov/manage-loans/repayment/plans/income-driven
- Federal Student Aid, studentaid.gov/manage-loans/default
- Federal Student Aid, studentaid.gov/manage-loans/repayment/repaying-101
- Federal Student Aid, studentaid.gov/help-center/answers/article/can-i-pay-more-than-required-monthl…
- Edfinancial, edfinancial.studentaid.gov/how-payments-are-applied
Written by Kaz (pen name). Figures are copied from the sources' published pages on the dates shown. We have not used these products. Corrections: contact form.