Student Loan Calculator
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Federal Student Loans
Direct Subsidized and Direct Unsubsidized Loans
Direct Subsidized Loans are need-based and dependent on Expected Family Contribution (EFC). Because they are subsidized, there are 6-month grace periods after completing studies before mandatory interest payments begin. Direct Unsubsidized Loans are not need-based and interest begins accruing immediately after approval.
Direct PLUS Loans
These are typically for graduate or professional students or parents of dependent undergraduate students. Borrowers should have favorable credit histories. The maximum possible loan amount is the difference between the cost of attendance and any other financial aid received.
Direct Consolidation Loans
Borrowers of multiple federal student loans can consolidate them into a single Direct Consolidation Loan. Reasons include having one simple monthly payment, lower monthly payments but longer time period, and access to additional income-driven repayment plans.
Private Student Loans
Private student loans mostly originate from banks and loan companies. Applicants must go through full underwriting including credit history and debt-to-income ratios. Almost all private student loans are not subsidized, and interest rates are higher than federal loans but still relatively low in the world of private loans. Unlike federal loans, private loans rarely offer income-driven repayment or forgiveness options.
Student Loan Repayment Options
It is not uncommon for new graduates to struggle to repay their student loans. For federal student loans, there are alternative solutions such as income-based repayment plans that cap monthly payments based on available income. Extended graduated repayment plans allow borrowers to extend loans for up to 25 years. Refinancing with a private lender at a lower rate can also reduce monthly payments, but may forfeit federal protections.
Strategies to Pay Off Student Loans Faster
- Make extra payments — Even an extra $50 per month can save hundreds in interest and shorten the loan term by years.
- Pay biweekly — Making half-payments every two weeks results in 26 payments per year (the equivalent of 13 monthly payments), accelerating payoff.
- Apply windfalls — Use tax refunds, bonuses, or gifts to make lump-sum principal payments.
- Refinance — If you have good credit and stable income, refinancing to a lower rate can save thousands over the life of the loan.
- Enroll in auto-debit — Many lenders offer a 0.25% interest rate reduction for automatic monthly payments.
Authoritative References
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Frequently Asked Questions
What is the grace period for student loans?
The grace period is the time between graduation and when repayment must begin. For federal student loans, the grace period is typically 6 months. During this time, interest may or may not accrue depending on the loan type (subsidized vs unsubsidized).
What is the difference between subsidized and unsubsidized loans?
Subsidized loans are need-based and the government pays interest while you are in school at least half-time, during the grace period, and during deferment. Unsubsidized loans accrue interest from the time they are disbursed, and you are responsible for paying all of the interest that accrues.
Can I prepay my student loans without penalty?
Yes. All educational loans in the U.S., including federal and private student loans, allow for penalty-free prepayment. Paying extra toward the principal reduces the total interest paid and can shorten the loan term significantly.
What are income-driven repayment plans?
Income-driven repayment plans cap your monthly payment at a percentage of your discretionary income and may forgive the remaining balance after 20-25 years of payments. Options include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE) plan.
Should I consolidate my federal student loans?
Consolidation combines multiple federal loans into one with a fixed interest rate based on the weighted average of the original loans. It simplifies payments but may eliminate certain benefits like interest rate discounts, principal rebates, or loan cancellation benefits for certain professions.
What happens if I default on my student loans?
Defaulting on federal student loans has serious consequences: damage to credit score, wage garnishment, loss of eligibility for federal aid, potential loss of professional licenses, and collection fees. Federal loans typically enter default after 270 days of non-payment.
Can student loans be discharged in bankruptcy?
Student loans are rarely dischargeable in bankruptcy. You must prove "undue hardship" under the Brunner test, which requires showing that you cannot maintain a minimal standard of living, that your financial situation is unlikely to improve, and that you have made good-faith efforts to repay.
How does student loan interest capitalize?
Capitalization occurs when unpaid interest is added to the principal balance, increasing the total loan amount. This typically happens after the grace period, deferment, forbearance, or when you leave school. Capitalization causes you to pay interest on top of interest, increasing the total cost.
What is Public Service Loan Forgiveness (PSLF)?
PSLF forgives the remaining balance on Direct Loans after 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer, such as government agencies or non-profit organizations. Payments must be made under an income-driven repayment plan.
Should I choose a variable or fixed interest rate for private loans?
Fixed rates remain the same for the life of the loan, providing predictable payments. Variable rates can change based on market conditions, starting lower but carrying the risk of future increases. If you plan to repay quickly, variable may save money; for longer terms, fixed is safer.
How does this student loan calculator work?
This calculator offers three modes: Simple calculates the monthly payment needed to pay off a given loan balance within a set term. Repayment compares your current payment against an accelerated payoff with extra payments. Projection estimates your total loan burden and payment based on future education borrowing.
What is the difference between the Simple and Repayment calculators?
The Simple calculator computes the standard monthly payment given a loan balance, term, and interest rate. The Repayment calculator starts with your current payment and models how extra monthly, yearly, or one-time payments can accelerate payoff and reduce total interest.
How does the Projection calculator work?
The Projection calculator helps current students estimate their future loan burden. Enter your expected annual borrowing, years until graduation, current balance, loan term, grace period, and interest rate. It shows your balance at graduation, after grace, and your monthly payment.
What is the difference between federal and private student loans?
Federal loans are funded by the government with fixed rates, income-driven repayment options, forgiveness programs, and generous deferment/forbearance. Private loans come from banks with variable or fixed rates, require credit checks, and offer fewer consumer protections.
How do I qualify for federal student loans?
Federal student loans require completing the Free Application for Federal Student Aid (FAFSA). Eligibility depends on financial need (for subsidized loans), enrollment status (at least half-time), U.S. citizenship or eligible non-citizen status, and maintaining satisfactory academic progress.
What is the current interest rate for federal student loans?
Federal student loan rates are set annually by Congress and are fixed for the life of the loan. For 2025-2026, undergraduate Direct Loans are approximately 6.53%, graduate Direct Loans are about 8.08%, and Direct PLUS Loans are around 9.08%. Rates reset each July.
What is the student loan interest deduction?
The student loan interest deduction allows you to deduct up to $2,500 of interest paid on qualified student loans from your taxable income. It is an above-the-line deduction (no need to itemize) and is phased out for higher-income earners.
What is forbearance and when should I use it?
Forbearance allows you to temporarily pause or reduce student loan payments due to financial hardship or medical expenses. Interest continues to accrue during forbearance, which may be capitalized. It should be used only as a last resort after exploring deferment and income-driven options.
What is the difference between deferment and forbearance?
Deferment allows you to pause payments, and for subsidized loans, the government pays the interest. Forbearance also pauses payments but interest always accrues on all loan types. Deferment is generally preferable but has more restrictive eligibility requirements.
How does refinancing student loans work?
Refinancing involves taking out a new private loan to pay off existing student loans, ideally at a lower interest rate. This can reduce monthly payments or total interest. However, refinancing federal loans into private loans forfeits federal protections like income-driven plans and forgiveness.
What is loan rehabilitation?
Loan rehabilitation is a program to get defaulted federal loans back into good standing. You agree to make 9 on-time monthly payments within 20 days of the due date over 10 consecutive months. After rehabilitation, the default is removed from your credit report.
How does the military affect student loans?
Active duty service members may qualify for deferment, interest rate caps (6% under the SCRA), and loan repayment programs. The military may also offer student loan repayment as an enlistment incentive. Veterans may qualify for additional forgiveness programs.
What is teacher loan forgiveness?
Teacher Loan Forgiveness forgives up to $17,500 of Direct Subsidized/Unsubsidized Loans for teachers who work full-time for five consecutive years in a low-income school. It requires teaching in specific subject areas like math, science, or special education.
How does the SAVE plan work?
The Saving on a Valuable Education (SAVE) plan calculates payments based on 5-10% of discretionary income and forgives remaining balances after 20-25 years. It also provides an interest subsidy: if your payment does not cover accruing interest, the government pays the remaining interest.
What is the difference between Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE)?
PAYE caps payments at 10% of discretionary income and forgives after 20 years, but requires partial financial hardship. REPAYE (now replaced by SAVE) capped payments at 10% of income and did not require financial hardship. Both have been superseded by the SAVE plan in most cases.
How do I calculate the total cost of my student loans?
The total cost includes the principal plus all interest paid over the life of the loan. This calculator shows the total interest and total payments for each scenario. Making extra payments reduces both the total interest and the repayment period.
What is the best strategy for paying off student loans?
The best strategy depends on your interest rates and financial situation. Generally: pay at least the minimum on all loans, target extra payments to the highest-interest loan first (avalanche method), and consider income-driven plans if your income is low relative to debt.
How does student loan interest work while in school?
For subsidized loans, the government pays the interest while you are in school at least half-time. For unsubsidized loans, interest accrues from the disbursement date. If you do not pay this interest, it capitalizes (gets added to principal) after graduation or when you leave school.
Can I deduct student loan interest if someone else pays my loans?
If someone else pays your student loans, the IRS generally considers it a gift, and you cannot deduct the interest. The person making the payments also cannot deduct it because they are not legally liable for the debt. Only the borrower can claim the student loan interest deduction.
What happens to student loans if I die?
Federal student loans are discharged upon the borrower's death. Parent PLUS loans are discharged if either the parent or the student dies. Private lenders also typically discharge loans upon death, but policies vary. Most require a certified death certificate to process the discharge.
How does student loan forgiveness work after 20-25 years?
Under income-driven repayment plans, any remaining balance after 20-25 years of qualifying payments is forgiven. However, under current tax law (through 2025), forgiven amounts are not considered taxable income. After 2025, forgiven amounts may be taxed as ordinary income.
What is the difference between the "simple-calculator" tab showing payment vs term?
In the Simple tab, if you enter the loan balance, term, and interest rate, the calculator shows the required monthly payment. If you also enter a monthly payment amount, it calculates whether that payment fully amortizes the loan within the term or shows the remaining balance.
What is student loan deferment?
Deferment allows you to temporarily postpone student loan payments for specific reasons such as returning to school, military service, unemployment, or economic hardship. For subsidized loans, the government pays the interest during deferment. For unsubsidized loans, interest accrues and may capitalize.
How do student loans affect my credit score?
Student loans can help build credit history through on-time payments (positive factor). However, missed payments, default, or high debt-to-income ratios can damage your credit. Making consistent payments is one of the best ways to build and maintain a strong credit profile.
What is the difference between in-school and out-of-school student loan interest?
While you are in school at least half-time, subsidized loans do not accrue interest (government pays it), and unsubsidized loans accrue interest that you can choose to pay or let capitalize. After leaving school, all loans accrue interest, and you enter repayment after the grace period.