What do I need to know about student loan debt in 2026?
Cash flow
Federal student loans now have multiple repayment options (SAVE replaced REPAYE, Standard, Graduated, Income-Based). The right choice depends on income trajectory, family size, forgiveness eligibility (PSLF), and tax filing status. Refinancing federal loans to private removes federal protections, often a one-way decision.
The repayment plan landscape
Standard 10-year: lowest total interest. Graduated: lower payments early, higher later. Income-Driven (IDR): payments based on discretionary income, forgiveness after 20-25 years. PSLF: 10 years of qualifying payments while working at a 501(c)(3) or government, remainder forgiven tax-free.
The PSLF strategy
If you work in qualifying public service, prioritizing PSLF often outperforms aggressive payoff. Pay the minimum on an IDR plan, certify employment annually, and direct excess cash to retirement and other goals. Recent rule changes have dramatically increased approval rates.
Refinancing: when it makes sense and when it doesn't
Private refinancing: best when you have stable high income, federal protections aren't needed, and you can lock a meaningfully lower rate. Avoid refinancing federal loans if you might use IDR, PSLF, or need forbearance, those protections are permanently lost.
What people often get wrong
- Refinancing federal loans before knowing if you'd qualify for PSLF
- Aggressively paying off federal loans while ignoring 401(k) match
- Filing taxes married-jointly when married-separately would lower IDR payments
What to think about next
- Check your loan servicer and current plan at studentaid.gov.
- If in public service, file an Employer Certification Form to confirm PSLF qualifying employment.
- Compare current IDR payment vs Standard, decide based on goals.
When to consider working with a CFP®
Working with a CFP® can help when these decisions feel intertwined, taxes, investments, cash flow, and life goals tend to move together, and a planning relationship can offer structure, prioritization, and accountability over time.
Frequently Asked Questions
What's the deal with SAVE?
SAVE was a more generous IDR plan that's been challenged in court. Borrowers in SAVE are largely in administrative forbearance as the legal process plays out. Watch studentaid.gov for updates and don't refinance based on temporary uncertainty.
Talk to a CFP® who works with high earners.
Connect with a CFP® to help you navigate this decision and build a comprehensive financial strategy.
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