Student Loan Calculator 2026

Understanding different **student loan types** and their characteristics helps you make informed borrowing decisions and choose the right repayment strategy. ### Federal Student Loans **1. Direct Subsidized Loans** **Characteristics:** - **Eligibility:** Undergraduate students with financial need - **Interest Rate:** Fixed (set annually by Congress) - **2026 Rate:** ~5.50% (varies by year) - **Interest Subsidy:** Government pays interest while in school, during grace period, and deferment - **Maximum:** $23,000 total (undergraduate) - **Repayment:** Starts 6 months after graduation/leaving school **Best For:** Undergraduate students with demonstrated financial need **2. Direct Unsubsidized Loans** **Characteristics:** - **Eligibility:** All students (undergraduate and graduate), no financial need required - **Interest Rate:** Fixed, typically same as subsidized - **2026 Rate:** ~5.50% (undergraduate), ~7.05% (graduate) - **Interest:** Accrues immediately (even while in school) - **Maximum:** $31,000 (undergraduate dependent), $57,500 (undergraduate independent), $138,500 (graduate) - **Repayment:** Starts 6 months after graduation/leaving school **Best For:** Students who don't qualify for subsidized loans or need additional funding **3. Direct PLUS Loans** **Characteristics:** - **Types:** Parent PLUS (for parents), Grad PLUS (for graduate students) - **Interest Rate:** Fixed, higher than other federal loans - **2026 Rate:** ~8.05% - **Credit Check:** Required (adverse credit history may disqualify) - **Maximum:** Cost of attendance minus other financial aid - **Repayment:** Starts immediately or can defer while in school **Best For:** Parents of dependent students or graduate students needing additional funding **4. Federal Perkins Loans (Discontinued)** - No longer available (ended 2017) - Existing loans still in repayment - Had lowest rates (5%) but limited availability ### Private Student Loans **Characteristics:** - **Lenders:** Banks, credit unions, online lenders - **Interest Rates:** Variable or fixed, credit-based - **Rates:** 4-12%+ (depends on credit) - **Terms:** 5-20 years typically - **Benefits:** May offer lower rates for excellent credit, flexible terms - **Drawbacks:** No income-driven plans, fewer protections, variable rates can increase **When to Consider:** - Exhausted federal loan options - Have excellent credit (or cosigner) - Need additional funding - Can get significantly lower rate than federal **When to Avoid:** - Haven't maxed out federal loans - Have poor credit (high rates) - Need repayment flexibility - Want federal protections ### Interest Rates and How They Work **Fixed vs. Variable Rates:** **Fixed Rates:** - Rate stays same for entire loan term - Federal loans are always fixed - Predictable payments - Rate set at loan origination **Variable Rates:** - Rate can change over time - Common with private loans - Tied to market index (LIBOR, Prime Rate) - Can increase or decrease **Interest Calculation:** **Simple Interest (Most Student Loans):** - Interest calculated on remaining principal balance - **Monthly Interest = Remaining Balance × (Annual Rate ÷ 12)** - As you pay down principal, interest decreases **Compound Interest (Some Private Loans):** - Interest calculated on principal + accrued interest - Less common for student loans - Can increase total cost significantly **Interest Capitalization:** **When Interest Capitalizes:** - End of grace period - End of deferment/forbearance - When leaving income-driven plan - When consolidating **Impact:** - Unpaid interest added to principal - Future interest calculated on higher balance - Can significantly increase total cost - Example: $30,000 loan with $5,000 accrued interest capitalizes to $35,000 ### Loan Limits and Borrowing Wisely **Federal Loan Limits (2026):** **Dependent Undergraduate:** - Year 1: $5,500 (max $3,500 subsidized) - Year 2: $6,500 (max $4,500 subsidized) - Year 3+: $7,500 (max $5,500 subsidized) - **Total:** $31,000 (max $23,000 subsidized) **Independent Undergraduate:** - Year 1: $9,500 (max $3,500 subsidized) - Year 2: $10,500 (max $4,500 subsidized) - Year 3+: $12,500 (max $5,500 subsidized) - **Total:** $57,500 (max $23,000 subsidized) **Graduate/Professional:** - Per year: $20,500 (all unsubsidized) - **Total:** $138,500 (includes undergraduate) **Borrowing Wisely:** **1. Only Borrow What You Need** - Don't borrow maximum just because it's available - Consider future earning potential - Rule of thumb: Total loans ≤ first year salary **2. Exhaust Federal Loans First** - Lower rates typically - More repayment options - Better protections **3. Consider Total Cost** - Not just monthly payment - Total interest over loan term - Impact on future financial goals **4. Plan for Repayment** - Estimate future income - Calculate expected payments - Consider career path and earning potential

Choosing the right **student loan repayment plan** is crucial for managing your debt effectively. Different plans offer different payment amounts, terms, and benefits. ### Standard Repayment Plan **Characteristics:** - **Term:** 10 years (120 payments) - **Payment:** Fixed monthly amount - **Total Interest:** Lowest of all plans - **Payoff:** Fastest option - **Eligibility:** All federal loans **Payment Calculation:** - Uses standard amortization - Payments stay same for entire term - More principal paid over time (less interest) **Best For:** - Can afford standard payments - Want to pay off quickly - Want to minimize total interest - Have stable, sufficient income **Example:** - $30,000 at 5% = $318/month - Total interest: $8,184 - Payoff: 10 years ### Graduated Repayment Plan **Characteristics:** - **Term:** 10 years (can extend to 30 for consolidation) - **Payment:** Starts low, increases every 2 years - **Total Interest:** More than standard (longer time at higher balance) - **Payoff:** 10 years (same as standard) - **Eligibility:** All federal loans **Payment Structure:** - Payments increase by ~10-15% every 2 years - Designed for expected income growth - Early payments mostly interest **Best For:** - Expect income to increase - Need lower payments initially - Can handle increasing payments later - Want 10-year payoff **Example:** - $30,000 at 5% - Year 1-2: $200/month - Year 3-4: $230/month - Year 5-6: $265/month - Year 7-8: $305/month - Year 9-10: $350/month - Total interest: ~$9,500 (more than standard) ### Extended Repayment Plan **Characteristics:** - **Term:** 25 years (300 payments) - **Payment:** Fixed or graduated - **Total Interest:** Highest (longest term) - **Payoff:** 25 years - **Eligibility:** Loans totaling $30,000+ (or consolidated loans) **Payment Calculation:** - Lower monthly payments (spread over 25 years) - Much more total interest - Can choose fixed or graduated within extended plan **Best For:** - Need lowest possible monthly payment - Have large loan balance - Can't afford standard payments - Don't qualify for income-driven plans **Example:** - $50,000 at 5% = $292/month (vs. $530 standard) - Total interest: $37,600 (vs. $13,600 standard) - Payoff: 25 years (vs. 10 years) ### Income-Driven Repayment Plans **Overview:** - Payments based on income and family size - 10-20% of discretionary income - 20-25 year terms - Potential forgiveness - Must recertify income annually **1. REPAYE (Revised Pay As You Earn)** **Characteristics:** - **Payment:** 10% of discretionary income - **Term:** 20 years (undergraduate), 25 years (graduate) - **Eligibility:** All federal loans (Direct Loans) - **Married:** Always includes spouse's income - **Interest Subsidy:** Government pays 50% of unpaid interest for first 3 years **Best For:** Recent graduates, low income, want lowest payments **2. PAYE (Pay As You Earn)** **Characteristics:** - **Payment:** 10% of discretionary income - **Term:** 20 years - **Eligibility:** Must be new borrower (after Oct 2007), have financial need - **Married:** Can file separately to exclude spouse income - **Payment Cap:** Never more than standard 10-year payment **Best For:** New borrowers with financial need, want payment cap **3. IBR (Income-Based Repayment)** **Characteristics:** - **Payment:** 10% (new borrowers) or 15% (older loans) of discretionary income - **Term:** 20 years (new), 25 years (old) - **Eligibility:** Must demonstrate financial hardship - **Payment Cap:** Never more than standard 10-year payment **Best For:** Borrowers with older loans, financial hardship **4. ICR (Income-Contingent Repayment)** **Characteristics:** - **Payment:** 20% of discretionary income OR income-based formula (whichever is less) - **Term:** 25 years - **Eligibility:** All Direct Loans (including Parent PLUS) - **Most Expensive:** Highest payment percentage **Best For:** Parent PLUS loans (only IDR option), need any IDR option ### Comparing Repayment Plans **Payment Comparison (Example: $50,000 at 5%, $40,000 income, family of 1):** | Plan | Monthly Payment | Total Interest | Payoff Time | |------|----------------|----------------|-------------| | Standard | $530 | $13,600 | 10 years | | Graduated | $300-$600 | $15,000 | 10 years | | Extended | $292 | $37,600 | 25 years | | REPAYE | $208 | $12,500* | 20 years* | | PAYE | $208 | $12,500* | 20 years* | *Assumes forgiveness after 20 years, remaining balance forgiven (may be taxable) **Choosing the Right Plan:** **Choose Standard If:** - Can afford payments - Want to pay off quickly - Want to minimize interest **Choose Income-Driven If:** - Can't afford standard payments - Have low income relative to debt - Pursuing forgiveness - Need payment flexibility **Choose Extended If:** - Need lower payments - Don't qualify for IDR - Have large balance - Can handle longer term

Developing a **student loan repayment strategy** helps you pay off debt faster, save on interest, and achieve financial freedom sooner. ### Strategies to Pay Off Loans Faster **1. Make Extra Payments** **How It Works:** - Pay more than minimum monthly payment - Extra goes directly to principal - Reduces remaining balance faster - Saves significant interest over time **Example:** - $30,000 at 5% for 10 years - Standard payment: $318/month - Pay $400/month (extra $82) - Payoff: 7.5 years (vs. 10 years) - Interest saved: $2,500 **Best Practices:** - Pay extra consistently - Apply to highest-rate loan first (if multiple) - Continue even small amounts ($25-50/month helps) - Use windfalls (tax refunds, bonuses) **2. Pay Biweekly Instead of Monthly** **How It Works:** - Make half-payment every 2 weeks - Results in 13 full payments per year (vs. 12) - One extra payment per year - Shaves ~1 year off 10-year loan **Example:** - $318/month standard payment - Pay $159 every 2 weeks - = $4,134/year (vs. $3,816) - Payoff: ~9 years (vs. 10 years) **3. Refinance to Lower Rate** **How It Works:** - Replace existing loans with new loan at lower rate - Reduces monthly payment or shortens term - Saves on total interest **Example:** - $50,000 at 6% for 10 years = $555/month, $16,600 interest - Refinance to 4% for 10 years = $506/month, $10,700 interest - **Savings: $5,900 in interest** **Considerations:** - Lose federal benefits (if refinancing federal loans) - Need good credit (typically 650+) - May need cosigner - Variable rates can increase **4. Use Debt Avalanche Method** **How It Works:** - List all loans by interest rate (highest first) - Pay minimums on all loans - Put extra payments toward highest-rate loan - Once paid off, move to next highest **Example:** - Loan 1: $10,000 at 7% (pay extra here first) - Loan 2: $15,000 at 5% - Loan 3: $20,000 at 4% - Saves most interest overall **5. Use Debt Snowball Method** **How It Works:** - List all loans by balance (smallest first) - Pay minimums on all loans - Put extra payments toward smallest loan - Psychological wins keep you motivated **Best For:** Need motivation, want quick wins ### Strategies to Reduce Total Cost **1. Pay Interest During School** **For Unsubsidized Loans:** - Interest accrues while in school - Paying interest prevents capitalization - Reduces total loan cost - Even $25-50/month helps **Example:** - $20,000 unsubsidized at 5% - Interest during 4 years: ~$4,000 - Pay $50/month = $2,400 paid - Remaining interest: $1,600 (vs. $4,000 capitalized) - **Savings: $2,400** **2. Avoid Capitalization** **When Interest Capitalizes:** - End of grace period - End of deferment/forbearance - Leaving income-driven plan - Consolidating **How to Avoid:** - Pay interest before it capitalizes - Make interest-only payments during deferment - Avoid unnecessary deferments - Plan carefully before consolidating **3. Take Advantage of Auto-Pay Discount** **How It Works:** - Many servicers offer 0.25% rate reduction - For automatic payments - Small but adds up over time **Example:** - $30,000 at 5% - With 0.25% discount: 4.75% - Savings: ~$400 over 10 years **4. Claim Student Loan Interest Deduction** **Tax Benefit:** - Deduct up to $2,500 in student loan interest - Reduces taxable income - Saves on taxes (depends on tax bracket) **Requirements:** - Must be paying interest on qualified loans - Income limits apply (phases out at higher incomes) - File Form 1040 (not 1040EZ) ### Balancing Student Loans with Other Goals **1. Emergency Fund First** **Priority:** - Build $1,000 emergency fund first - Then 3-6 months expenses - Before aggressive loan payoff - Protects against unexpected expenses **Why:** - Prevents going into more debt - Provides financial security - Allows you to pay loans consistently **2. High-Interest Debt First** **Priority Order:** 1. Credit card debt (15-25%+) 2. Personal loans (8-15%+) 3. Student loans (3-7%) 4. Mortgage (3-5%) **Logic:** Paying off high-interest debt saves more money **3. Retirement Savings** **Balance:** - Contribute to 401(k) to get employer match (free money) - Then pay extra on student loans - Then max out retirement accounts **Example:** - 401(k) match: 100% return (immediate) - Student loan: 5% interest saved - **Match is better return** **4. Other Financial Goals** **Consider:** - Down payment for house - Starting a business - Career advancement (education, certifications) - Life events (wedding, children) **Strategy:** Balance loan payoff with other important goals ### When to Consider Loan Forgiveness **Public Service Loan Forgiveness (PSLF):** **Requirements:** - Work for government or 501(c)(3) nonprofit - Make 120 qualifying payments (10 years) - Have Direct Loans (or consolidate to Direct) - Be on qualifying repayment plan **Best For:** - Planning to work in public service anyway - Have large loan balance - Can make 10 years of payments - Want tax-free forgiveness **Income-Driven Forgiveness:** **How It Works:** - Remaining balance forgiven after 20-25 years - Must be on income-driven plan - Forgiven amount may be taxable **Best For:** - Low income relative to debt - Can't afford standard payments - Don't qualify for PSLF - Accept paying more total interest for lower payments **Considerations:** - Forgiven amount = taxable income (except PSLF) - May pay more total interest over 20-25 years - Income may increase, making payments higher later

Understanding **student loan refinancing** and **consolidation** helps you decide if these options make sense for your situation. ### Federal Loan Consolidation **What It Is:** - Combines multiple federal loans into one Direct Consolidation Loan - Single monthly payment - Weighted average interest rate (rounded up to nearest 1/8%) - Maintains federal benefits **How It Works:** - Apply through StudentLoans.gov - Choose which loans to consolidate - New loan created with new servicer - Old loans paid off - New repayment term: up to 30 years **Benefits:** - **Simplified management:** One payment instead of multiple - **Extended term:** Can extend to 30 years (lowers payments) - **Access to plans:** May qualify for repayment plans not available before - **Fixed rate:** Rate stays same for entire term **Drawbacks:** - **Slightly higher rate:** Weighted average rounded up - **More interest:** Longer term = more total interest - **Resets forgiveness clock:** If pursuing PSLF, resets to 0 payments - **Can't undo:** Permanent decision **When to Consolidate:** - Have multiple federal loans with different servicers - Want single monthly payment - Need to extend term (lower payments) - Want access to certain repayment plans - Have FFEL or Perkins loans (must consolidate to access some benefits) **When Not to Consolidate:** - Close to PSLF forgiveness (resets payment count) - Already have low rate - Would lose benefits - Don't need extended term ### Private Loan Refinancing **What It Is:** - Replace existing loans (federal or private) with new private loan - New interest rate (may be lower) - New terms and servicer - Lose federal benefits (if refinancing federal loans) **How It Works:** - Apply with private lender (banks, credit unions, online lenders) - Lender pays off old loans - New loan created with new rate/terms - Make payments to new lender **Benefits:** - **Lower rate:** If credit improved or market rates dropped - **Single payment:** If consolidating multiple loans - **Shorter term:** Can choose 5-10 year term (pay off faster) - **Better service:** Some lenders offer better customer service **Drawbacks:** - **Lose federal benefits:** Income-driven plans, forgiveness, deferment options - **Credit check required:** Need good credit (typically 650+) - **Variable rates:** May increase over time - **Cosigner may be needed:** If credit isn't strong enough - **Can't undo:** Permanent decision **When to Refinance:** - Have excellent credit (or improved significantly) - Can get significantly lower rate (1%+ difference) - Don't need federal benefits - Want to pay off faster - Have stable income - Private loans with high rates **When Not to Refinance:** - Need income-driven repayment plans - Pursuing PSLF or other forgiveness - Have variable income - Credit isn't strong enough - Rate difference is minimal (<1%) - Want federal protections ### Refinancing Process **1. Check Your Credit** **What Lenders Look For:** - Credit score (typically 650+) - Credit history - Debt-to-income ratio - Employment and income stability **Improve Credit First:** - Pay down other debt - Make all payments on time - Keep credit utilization low - Check credit report for errors **2. Shop Around** **Compare Lenders:** - Interest rates (fixed and variable) - Terms available - Fees (origination, prepayment) - Customer service - Reputation and reviews **Get Pre-Qualified:** - Soft credit check (doesn't affect score) - See estimated rates - Compare offers - No obligation **3. Apply** **What You'll Need:** - Personal information - Employment and income details - Loan information (balances, rates, servicers) - Cosigner information (if needed) **Application Process:** - Submit application - Hard credit check - Lender reviews application - Approval or denial - If approved, review terms - Accept and sign **4. Loan Payoff** **After Approval:** - Lender pays off old loans - Old loans closed - New loan activated - Start making payments to new lender - Takes 2-4 weeks typically ### Refinancing Considerations **Federal vs. Private Refinancing:** **Federal Consolidation:** - Maintains federal benefits - Slightly higher rate (rounded up) - Can extend term - No credit check - Free to consolidate **Private Refinancing:** - May get lower rate - Lose federal benefits - More flexible terms - Credit check required - May have fees **Rate Types:** **Fixed Rate:** - Stays same for entire term - Predictable payments - Higher initial rate typically - Best for: Want certainty, rates are low **Variable Rate:** - Can change over time - Lower initial rate typically - Can increase significantly - Best for: Plan to pay off quickly, comfortable with risk **Term Options:** **Shorter Term (5-7 years):** - Higher monthly payments - Less total interest - Pay off faster - Best for: Can afford higher payments, want to save on interest **Longer Term (15-20 years):** - Lower monthly payments - More total interest - Pay off slower - Best for: Need lower payments, want flexibility ### Alternatives to Refinancing **1. Income-Driven Repayment** **Instead of Refinancing:** - Lower payments based on income - Keep federal benefits - Potential forgiveness - No credit check **Best For:** Can't afford standard payments, need federal benefits **2. Extended Repayment** **Instead of Refinancing:** - Extend term to 25 years - Lower monthly payments - Keep federal benefits - No credit check **Best For:** Need lower payments, don't want to refinance **3. Make Extra Payments** **Instead of Refinancing:** - Pay extra on existing loans - Reduces total interest - Pay off faster - Keep all benefits **Best For:** Can afford extra payments, want to keep benefits **4. Employer Student Loan Assistance** **New Benefit:** - Some employers contribute to student loans - Up to $5,250/year tax-free (through 2026) - Free money toward loans - Check if your employer offers **Best For:** Employer offers benefit, want free money toward loans

Successfully **managing student loan debt** requires planning, discipline, and knowing your options. These strategies help you stay on track and avoid default. ### Creating a Repayment Plan **1. Know Your Loans** **Gather Information:** - List all loans (federal and private) - Note balances, interest rates, servicers - Check repayment start dates - Understand terms and conditions **Use National Student Loan Data System (NSLDS):** - Federal loan database - Shows all federal loans - Current balances and servicers - Repayment status **2. Calculate Your Payments** **Use Our Calculator:** - Enter each loan's details - Calculate monthly payments - Total all payments - Compare to your income **Budget Analysis:** - Monthly income - Essential expenses - Loan payments - Discretionary income - Can you afford payments? **3. Choose Repayment Plan** **Evaluate Options:** - Standard (if affordable) - Income-driven (if need lower payments) - Extended (if need longer term) - Compare total cost of each **Consider:** - Current income - Expected income growth - Other financial goals - Long-term plans **4. Set Up Auto-Pay** **Benefits:** - Never miss a payment - Often get 0.25% rate discount - Simplifies management - Reduces stress **How to Set Up:** - Log into loan servicer account - Enroll in automatic payments - Choose payment date - Ensure sufficient funds ### Avoiding Default **What Is Default?** **Federal Loans:** - Default = 270 days (9 months) of missed payments - Serious consequences - Can be rehabilitated or consolidated **Private Loans:** - Default = Varies by lender (typically 90-120 days) - Consequences vary - May be harder to resolve **Default Consequences:** **1. Credit Damage** - Default reported to credit bureaus - Stays on credit report 7+ years - Lowers credit score significantly - Makes future borrowing difficult **2. Collections** - Loans sent to collections agency - Aggressive collection efforts - Harassment (illegal but happens) - Stress and anxiety **3. Wage Garnishment** - Up to 15% of disposable income - Taken directly from paycheck - No court order needed (federal loans) - Continues until paid off or resolved **4. Tax Refund Offset** - Federal tax refunds seized - Applied to loan balance - No notice required - Continues until resolved **5. Loss of Benefits** - Can't defer or get forbearance - Lose eligibility for new federal aid - Can't change repayment plans - Lose access to forgiveness programs **Preventing Default:** **1. Contact Your Servicer Immediately** **If You Can't Pay:** - Don't ignore the problem - Call servicer before missing payments - Explain your situation - Ask about options **Options Available:** - Switch to income-driven plan - Request deferment - Request forbearance - Explore other options **2. Switch to Income-Driven Plan** **If Payments Too High:** - Payments based on income - Can be as low as $0 - Prevents default - Maintains good standing **3. Request Deferment** **Eligible Situations:** - Enrolled in school (at least half-time) - Unemployment (up to 3 years) - Economic hardship - Active military duty - Cancer treatment **Benefits:** - Payments paused - Interest may not accrue (subsidized loans) - Maintains good standing **4. Request Forbearance** **Eligible Situations:** - Financial hardship - Medical expenses - Change in employment - Other reasons (servicer discretion) **Types:** - **General Forbearance:** Up to 12 months at a time, 36 months total - **Mandatory Forbearance:** Specific situations (medical, teaching, etc.) **Note:** Interest continues to accrue (increases balance) ### Getting Out of Default **1. Loan Rehabilitation** **How It Works:** - Make 9 on-time payments (within 20 days of due date) - Payment amount determined by servicer (often income-based) - After 9 payments, loan removed from default - Default removed from credit report **Benefits:** - Removes default status - Restores benefits - Improves credit - Can consolidate after rehabilitation **2. Loan Consolidation** **How It Works:** - Consolidate defaulted loan into new Direct Consolidation Loan - Immediately removes default status - Must agree to repayment plan or make 3 payments first - Can choose new repayment plan **Benefits:** - Faster than rehabilitation - Removes default immediately - Can choose repayment plan - Restores benefits **3. Pay in Full** **If Possible:** - Pay entire defaulted balance - Immediately removes default - Restores all benefits - Best option if financially possible ### Long-Term Success Strategies **1. Stay Organized** **Track Your Loans:** - Keep records of all loans - Monitor balances and payments - Check servicer accounts regularly - Update contact information **2. Make Payments on Time** **Always:** - Pay at least minimum on time - Set up auto-pay if possible - Budget for loan payments - Treat as priority expense **3. Communicate with Servicer** **When Needed:** - Update contact information - Report changes in income - Ask questions - Request help when needed **4. Review Annually** **Check:** - Current balances - Payment amounts - Repayment plan still appropriate? - Opportunities to save (refinance, extra payments) **5. Plan for the Future** **Consider:** - Career goals and income potential - Other financial goals - Life changes (marriage, children, etc.) - How loans fit into overall financial plan ### Resources and Help **Federal Resources:** - **StudentLoans.gov:** Official federal loan website - **NSLDS:** National Student Loan Data System - **Federal Student Aid:** Information and resources - **Loan servicers:** Contact for account-specific help **Nonprofit Help:** - **National Foundation for Credit Counseling:** Free counseling - **American Student Assistance:** Resources and tools - **Student Loan Borrower Assistance:** Information and advocacy **When to Seek Help:** - Can't make payments - Confused about options - In default or at risk - Need help understanding benefits - Considering major decisions (refinance, consolidation)