Student Loan Calculator

Student loan monthly payments are calculated using the standard amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan balance at repayment start, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. Each payment covers that month's interest first, with the remainder applied to the principal.

A grace period is a window of time after you graduate, leave school, or drop below half-time enrollment before your first payment is due. Most federal student loans include a 6-month grace period. During this time, unsubsidized loans and private loans continue to accrue interest. If that interest is not paid during the grace period, it is added (capitalized) to your principal balance — meaning you end up paying interest on your interest for the life of the loan.

Subsidized loans are need-based and the federal government pays the interest while you are enrolled at least half-time, during the grace period, and during deferment. Unsubsidized loans are available to all eligible students regardless of financial need, but interest accrues from the moment the loan is disbursed — including during school, the grace period, and any deferment. This makes unsubsidized loans more expensive over time if interest is not paid as it accrues.

Federal student loan interest rates are set by Congress each year and are fixed for the life of the loan for that disbursement year. For the 2024–2025 academic year, rates are approximately 6.53% for Direct Subsidized and Unsubsidized loans (undergraduate), 8.08% for Direct Unsubsidized loans (graduate), and 9.08% for Direct PLUS loans. Private loan rates vary by lender and your creditworthiness, ranging from roughly 4% to 16%.

Federal student loans offer several repayment plans: Standard Repayment (fixed payments over 10 years), Graduated Repayment (payments start lower and increase every two years), Extended Repayment (up to 25 years), and income-driven plans such as SAVE, IBR, PAYE, and ICR which cap payments at a percentage of your discretionary income. This calculator models the Standard Repayment plan. Income-driven plans will result in lower monthly payments but more total interest paid.

There is no prepayment penalty on federal or most private student loans, so paying extra toward principal whenever possible reduces your total interest cost significantly. Even an extra $50–$100 per month can save thousands of dollars and years of repayment. However, if your loan interest rate is low (under 5%), it may be more beneficial to invest the extra money rather than aggressively prepaying, depending on your financial situation.

Refinancing replaces one or more existing student loans with a new private loan at a (hopefully) lower interest rate. It can reduce your monthly payment and total interest paid. However, refinancing federal loans into a private loan means losing access to federal protections like income-driven repayment plans, Public Service Loan Forgiveness (PSLF), and federal deferment or forbearance options. Refinancing makes the most sense if you have stable income, good credit, and do not plan to use federal repayment benefits.

PSLF is a federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments (10 years) while working full-time for a qualifying government or non-profit employer. Payments must be made under an income-driven repayment plan. Only federal Direct Loans qualify — private loans and FFEL loans do not, though FFEL loans can be consolidated into a Direct Consolidation Loan to become eligible. PSLF can be an extremely valuable benefit for those in public service careers.