Student loan planning

Sometimes, and it is a calculation rather than a rule of thumb. Filing separately can take a spouse’s income out of the payment under RAP and IBR, and it also gives up credits, the student loan interest deduction and direct Roth IRA contributions for most couples. We run the comparison both ways every year, because the answer moves as your income and your balance move.

It depends on the tax at the end. Public Service Loan Forgiveness remains tax free, so with a qualifying employer it usually is. Forgiveness at the end of an income-driven plan became taxable again in 2026, so that path is judged as a taxable event decades out, funded along the way, against simply paying the loan off.

We plan the strategy and tell you exactly what to elect and when. The servicer administers the plan and you remain the account holder. We do not prepare or file the tax return that documents your income for recertification.

The SAVE plan was blocked by a federal court in March 2026, and servicers spent the summer moving borrowers off it with 90-day notices. On July 1, 2026 the Repayment Assistance Plan launched.

Under current rules RAP sets the payment between one and ten percent of adjusted gross income, reduces it by fifty dollars a month per dependent child, carries a ten-dollar minimum, and forgives whatever remains after 360 qualifying payments. It also adds a principal match when a payment is too small to reduce the balance, which is what keeps a low payment from growing the loan.

Borrowers whose loans were all disbursed before July 1, 2026 keep access to IBR alongside RAP. PAYE and ICR are scheduled to end on July 1, 2028. Anyone with a loan first disbursed on or after July 1, 2026 has RAP as the only income-driven option.

Public Service Loan Forgiveness is unchanged at 120 qualifying payments, RAP counts as a qualifying plan, and the rule that would have narrowed which employers qualify was vacated in court on June 30, 2026.

The change that matters most for planning is the tax. The exclusion that made income-driven forgiveness tax free expired at the end of 2025. Forgiveness after 360 payments is now ordinary income in the year it happens. PSLF forgiveness stays tax free. A thirty-year plan that ends in a taxable event has to be evaluated as one, and funded as one, from the first year rather than the last.

Every income-driven payment is a function of adjusted gross income, so every decision that moves AGI moves the payment. Pre-tax retirement deferrals, an HSA and a deductible IRA contribution lower it. A Roth conversion, a capital gain, a large bonus or a vesting grant raise it, and the year they land in matters because the payment is recalculated at recertification.

For a borrower on track for PSLF, a dollar of AGI reduction lowers a payment on a balance that will be forgiven without tax, which can reverse the usual answer on Roth versus traditional contributions.

Filing status is the largest single lever. Under RAP and IBR, a married borrower who files separately is assessed on their own income and their own balance alone. What that costs on the return is specific: most credits, the student loan interest deduction, which is not allowed for separate filers, and direct Roth IRA contributions for most couples who live together.

The right answer is a computation that compares two returns and two payment schedules over the years the loan will run, and it is one we are already set up to do because the tax projection is already part of the plan.

The remaining work is keeping the count honest. Employment certifications on a schedule, the payment count checked rather than assumed, forbearance months reviewed for buyback, and consolidation decisions made with the forgiveness clock in view. None of it is difficult. It is simply the kind of work that gets skipped when nobody owns it.

• Repayment plan comparison: RAP, IBR, standard and tiered standard, priced off your own income
• Filing status analysis with both filing outcomes and both payment schedules modeled
• PSLF eligibility, employment certification cadence and payment-count tracking
• Adjusted gross income planning around each annual recertification
• Forgiveness tax projection and a funded reserve for it
• Federal versus private refinance analysis, including the protections given up
• Parent PLUS and consolidation decisions
• Retirement contribution strategy coordinated with the loan payment
• Review of forbearance months and buyback eligibility
• Private loan payoff sequencing against investing and cash reserves
• Employer repayment benefit coordination
• Loan strategy through residency, fellowship and early-career transitions