Student Loan Calculator

How the standard repayment plan works

The standard federal student loan plan spreads the balance over 10 years in 120 equal payments, using the same formula as any other loan: M = P × [ r(1 + r)ⁿ ] ÷ [ (1 + r)ⁿ - 1 ]. P is the amount borrowed, r is the annual rate divided by 12, and n is 120.

A $30,000 balance at 6.5% gives a monthly rate of 0.005417 and 120 payments. Plug those in and the payment is $340.64 a month. Multiply by 120 and the total is $40,877, which means $10,877 of interest on top of the $30,000 borrowed.

Interest on federal student loans accrues daily on the outstanding balance, and the rate is fixed for the life of the loan. That makes the arithmetic stable: the payment on a given balance at a given rate never changes unless you change the plan or make extra payments.

One thing the formula does not capture is what happens during school. On an unsubsidized loan, interest builds from the day the money is disbursed, so a $30,000 loan can be $33,000 by the time repayment starts. Capitalized interest is added to the principal, and the formula then runs on the larger number.

The same loan at five different terms

Term length is the only lever most borrowers control, and it moves the two numbers in opposite directions.

Going from 10 years to 25 years cuts the payment from $340.64 to $202.56, a saving of $138.08 a month. It also raises the interest from $10,877 to $30,769, an increase of $19,891. You pay nearly three times the interest to free up $138 a month.

The 5-year row is the other extreme. The payment is $586.98, which is 72% higher than the 10-year payment, and it cuts the interest to $5,219. For a borrower with steady income, the shorter term is the cheapest path by a wide margin.

Worked examples at different balances

These four cases cover a modest balance, a graduate balance and two rate levels. The calculator reproduces each one.

The last row is the one that surprises people. An $80,000 balance at 7.5% over 20 years costs $644.47 a month and $74,674 in interest. The interest alone is close to the original balance. Compare it with the first row, where a $20,000 loan at 5% over 5 years costs $377.42 a month and just $2,645 in interest.

Rate and term compound each other. Moving the $30,000 balance from 5% to 7% adds about $3,600 of interest over 10 years, and moving it from 10 years to 20 years adds roughly $13,000. Both changes are usually outside the borrower's control at the moment of borrowing, which is why refinancing and extra payments get so much attention.

Extra payments and what they save

Extra money goes straight at the principal, so it shortens the loan and cuts the interest. The saving is larger than most people expect because the interest is charged on the balance, and a lower balance means less interest next month.

An extra $100 a month on a 10-year loan clears it in 86 months instead of 120, which is 34 months earlier, and saves $3,347 of interest. The same $100 spread over 120 months is $12,000 of payments, so the saving is not free money, but $3,347 of it is interest you never pay.

There is one condition on federal loans. Under the standard plan there is no penalty for extra payments, and any amount above the required payment goes to the loan with the highest rate once you specify that in your servicer account. Without that instruction, a servicer may spread the extra across all your loans, which is less efficient.

Federal versus private student loans

The rate you enter is the rate that matters, but where the loan comes from changes what you can do with it.

The practical point is that a private loan at 5% is not automatically better than a federal loan at 6.5%. The federal loan carries protections that cost nothing until you need them, and income-driven repayment can cut a payment to a fraction of the standard figure when income drops. Run both rates through the calculator to see the monthly gap, then decide whether the flexibility is worth it.

Refinancing moves a loan from the left column to the right, and it is a one-way door. A refinanced federal loan cannot be moved back, so compare the rate saving over the full term against the value of the protections you give up before you sign.

What this calculator does not model

This is a fixed-rate amortization calculator. It answers the question most borrowers ask, which is what a given balance at a given rate costs per month and in total. It does not model the federal repayment plans that many borrowers use.

Income-driven repayment. Plans like SAVE, PAYE and IBR set the payment as a percentage of discretionary income rather than from the balance. A borrower with a $30,000 balance and a low income can pay $0 a month under these plans.

Forgiveness. The balance left after 20 or 25 years of qualifying payments under an income-driven plan is forgiven, and Public Service Loan Forgiveness clears the balance after 120 qualifying payments for eligible employers.

Subsidized interest and deferment. On subsidized loans the government pays the interest during school and grace periods. During deferment or forbearance the interest keeps running on unsubsidized loans and is added to the balance.

Consolidation and refinancing. Combining loans produces a weighted average rate, and private refinancing can lower the rate at the cost of federal protections like forgiveness and income-driven repayment.

For the plan details, the Federal Student Aid loan pages list the current repayment plans and rates, the Consumer Financial Protection Bureau's student loan tools cover repayment and complaints, and the Department of Education publishes the regulations behind the plans. This page is an estimate for planning and not financial, tax or legal advice.