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Student Loan Calculator - Understanding Your Payments, Interest and Repayment Options

Most borrowers focus on the monthly payment number and stop there. But the monthly payment is only one piece of the picture. The number that really matters is total cost - what you actually pay back over the life of the loan compared to what you borrowed. On a standard 10-year federal loan at today's rates, a $35,000 balance typically costs around $12,000–$15,000 in interest on top of the principal. This calculator shows you the full picture upfront so you can make repayment decisions with clear numbers, not guesswork.

The Four Federal Repayment Plans - Which Is Right for You

Federal vs Private Student Loans - Key Differences

The loan type matters enormously when choosing a repayment strategy. Federal and private loans have fundamentally different rules:

• Interest rates: Federal rates are fixed by Congress and apply equally to all borrowers (6.53% undergrad, 8.08% grad, 9.08% PLUS for 2025). Private rates vary from 4–16% based on your credit score and the lender.
• Repayment flexibility: Federal loans offer income-driven repayment, deferment, forbearance, and forgiveness programs. Private loans offer none of these as a legal right - hardship options depend entirely on the lender.
• Refinancing: You can refinance federal loans into private loans to get a lower rate, but you permanently lose all federal protections. Never refinance federal loans if you plan to use IBR, PSLF, or if your income could drop unexpectedly.
• Subsidised vs Unsubsidised: On Direct Subsidized loans, the government pays the interest while you are enrolled at least half-time and during the 6-month grace period. On Unsubsidised loans, interest accrues from the day the loan is disbursed - including while you are still in school.

How Extra Payments Work - And Why They Matter More Than You Think

Every extra dollar you pay beyond the minimum goes directly to principal - not to future interest. This creates a compounding benefit: a smaller principal means less interest accrues each month, which means an even larger portion of your regular payment goes to principal next month, and so on. The earlier in the loan term you make extra payments, the greater the multiplier effect.

• $50/month extra on a $35,000 loan at 6.54%: saves ~$1,000 in interest, cuts ~12 months off repayment
• $100/month extra: saves ~$1,800, cuts ~22 months
• $200/month extra: saves ~$3,200, cuts ~38 months
• $500/month extra: saves ~$5,800, cuts ~60 months - pays off in 5 years instead of 10

One important note: confirm with your servicer that extra payments are applied to principal and not held as a credit toward future payments. Most servicers default to crediting forward - you may need to specify "apply to principal" explicitly.

Public Service Loan Forgiveness (PSLF) - Who Qualifies

PSLF forgives the remaining federal loan balance after 10 years (120 qualifying monthly payments) of full-time employment with a qualifying employer. Unlike standard IDR forgiveness, PSLF forgiveness is completely tax-free.

• Qualifying employers: Federal, state, local and tribal government agencies; 501(c)(3) nonprofit organisations; and certain other public service organisations
• Qualifying loans: Only Direct Loans qualify. FFEL and Perkins loans must be consolidated into a Direct Consolidation Loan first
• Qualifying repayment plans: Must be on an income-driven repayment plan (SAVE, IBR, PAYE, ICR)
• Strategy implication: If you qualify for PSLF, minimising your monthly payments via IBR is actually the optimal strategy - lower payments mean more is forgiven tax-free after 10 years
• Submit an Employment Certification Form annually at studentaid.gov, not just at the 10-year mark

What Happens to Interest While You Are Still in School

This is one of the most misunderstood aspects of student loans. On Direct Unsubsidized loans and PLUS loans, interest starts accruing from the day the loan is disbursed - even while you are still in school and not making payments. By the time a typical 4-year student graduates, the loan balance may be significantly higher than the original amount borrowed due to capitalised interest.

• $10,000 unsubsidized loan at 6.53% - after 4 years in school: ~$2,800 in accrued interest
• If not paid during school, this interest capitalises at repayment start, increasing the principal to ~$12,800
• You then pay interest on $12,800, not $10,000 - a significant difference over 10 years
• Best practice: Pay the monthly interest on unsubsidized loans while still in school, even if you cannot pay down the principal. This prevents capitalisation and saves considerably over the life of the loan