Student loans have funded the education of millions, but understanding repayment is crucial for avoiding a decades-long debt burden. This calculator helps you plan payments, compare repayment strategies, and find the fastest path to becoming debt-free.
How This Calculator Works
This calculator analyzes your student loan repayment:
- Loan Balance: Total amount owed across all loans
- Interest Rate: Your average (or weighted) interest rate
- Loan Term: Standard repayment period (usually 10 years)
- Monthly Payment: Required payment under your plan
- Total Interest: What you'll pay beyond principal
- Early Payoff: Impact of extra payments
The Formula Explained
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
Where:
- P = Principal (loan balance)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of months
Total Interest = (Monthly Payment × n) - Principal
Step-by-Step Example
$35,000 Student Loan at 5.5% Interest
| Repayment Strategy | Monthly | Term | Total Interest |
| Standard 10-Year | $380 | 120 months | $10,615 |
| 15-Year Extended | $286 | 180 months | $16,392 |
| Aggressive $500/mo | $500 | 83 months | $6,389 |
| Aggressive $600/mo | $600 | 67 months | $5,067 |
Paying $120 extra monthly saves $4,226 and 3 years!
Frequently Asked Questions
What's the difference between subsidized and unsubsidized loans?
Subsidized loans (for undergrads with financial need): The government pays interest while you're in school and during grace/deferment periods. Unsubsidized loans (for all students): Interest accrues from day one. Subsidized loans are better—if eligible, maximize them before taking unsubsidized.
What repayment plans are available for federal loans?
Standard: 10 years, fixed payments. Graduated: Starts low, increases every 2 years. Extended: Up to 25 years for large balances (lower payments, more interest). Income-Driven (IDR): Payments based on income—SAVE, PAYE, IBR, ICR. IDR plans cap payments and offer forgiveness after 20-25 years.
What is income-driven repayment (IDR)?
IDR plans cap monthly payments at 5-15% of discretionary income. After 20-25 years of payments, remaining balance is forgiven (potentially taxable). Best for: public sector workers (PSLF), low earners, very high balances. Downside: longer repayment, more total interest, potential tax bomb.
What is Public Service Loan Forgiveness (PSLF)?
PSLF forgives remaining federal loan balance after 120 qualifying payments while working for government or nonprofits. The forgiveness is tax-free. You must be on an income-driven plan. PSLF makes sense if significant balance remains after 10 years of income-driven payments.
Should I consolidate or refinance my student loans?
Federal consolidation combines federal loans into one—simplifies payments but doesn't lower rates. Refinancing (private lender) can lower rates if you have good credit/income but loses federal protections (IDR, forgiveness, deferment). Never refinance if pursuing PSLF or needing safety nets.
Is the student loan interest tax deductible?
You can deduct up to $2,500 annually in student loan interest if income qualifies (phases out at higher incomes). This is an "above-the-line" deduction—you don't need to itemize. At 22% tax bracket, the $2,500 deduction saves ~$550 in taxes.
Should I pay off student loans or invest?
Compare after-tax returns. If loans are at 5% and investments average 7% after taxes, investing wins mathematically. However, debt payoff is guaranteed returns with no risk. Consider: (1) Get employer 401(k) match first, (2) Build emergency fund, (3) Pay high-interest debt (> 7%), (4) Balance remaining debt vs. investing.
What happens if I can't make payments?
Options before missing payments: (1) Deferment/forbearance—temporary pause (interest may accrue), (2) Income-driven repayment—payments as low as $0 based on income, (3) Contact servicer—they may have hardship options. Defaulting (270+ days late) has severe consequences: wage garnishment, credit damage, loss of protections.
Key Points to Remember
- Know your loans: Federal vs private, rates, balances, servicers
- Autopay discount: Most servicers offer 0.25% rate reduction
- Extra payments matter: Small additions save thousands over time
- Never default: Contact servicer before missing payments
- Forgiveness programs exist: PSLF, IDR forgiveness for qualifying borrowers