US Student Loan Payment Calculator (IDR + Standard)

US Student Loan Repayment Guide

What's the difference between Standard and IDR Plans?

Standard Repayment: 10 years, fixed payment, lowest total interest. Best when income comfortably covers payment. Income-Driven Repayment (IDR): payment capped at 10-15% of discretionary income, forgiveness after 20-25 years (taxable forgiveness as of 2024). REPAYE/SAVE replaced by new SAVE rules — exact program subject to ongoing legal challenges in 2025. PAYE: 10% of discretionary income, 20-year forgiveness. IBR: 10-15% of discretionary income, 20-25 year forgiveness. Public Service Loan Forgiveness (PSLF): forgives the remaining balance after 120 qualifying monthly payments while working full-time for a qualifying government or non-profit employer.

What should I know about PSLF — Free Money for Public Sector?

Public Service Loan Forgiveness is the single best deal in US student loans. Requirements: 120 qualifying payments (10 years) on an IDR plan; employed full-time by qualifying employer (federal/state/local government, 501(c)(3) nonprofit, AmeriCorps, Peace Corps, full-time military). Strategy: minimize payments on IDR (lower income years count); maximize forgiveness amount. A teacher earning $50,000 with $80,000 in loans on SAVE plan might pay $200-300/month for 10 years = $30,000 paid; remaining balance forgiven tax-free after 10 years of qualifying payments in public service.

When to Refinance to Private?

Refinancing federal loans to private is PERMANENT — you lose access to IDR, PSLF, forbearance, and federal forgiveness programs. Only refinance if: you're certain you won't need IDR or PSLF; you can secure a meaningfully lower rate (often 2%+ lower); high income comfortably handles payments. Best for: high-earning professionals (doctors after residency, engineers, lawyers in private practice) with high loan balances who won't pursue PSLF. SoFi, Earnest, Laurel Road, and Splash are among the major refinance lenders, though refinancing federal loans to private permanently forfeits access to federal protections like income-driven repayment and forgiveness programmes.

What's the difference between The 'Avalanche' and 'Snowball' Method?

If you have multiple loans: Avalanche = pay minimums on all loans, throw extra at HIGHEST interest rate loan first. Mathematically optimal. Snowball = pay minimums on all loans, throw extra at SMALLEST balance loan first. Psychologically motivating (quick wins). For $45,000 across 5 loans, avalanche typically saves $500-2,000 vs snowball over the payoff period. Avalanche wins financially; snowball wins for those needing motivation to stick with the plan. Whichever you choose, the key behaviour is consistency — sticking with a payoff plan matters more than which specific method is mathematically optimal.

What's the key thing to understand about Standard vs Income-Driven Repayment?

Federal student loans typically default to a Standard Repayment Plan, which pays off the loan over a fixed period (commonly 10 years) with equal monthly payments — this results in the least interest paid overall but the highest monthly payment. Income-driven repayment (IDR) plans instead calculate the monthly payment as a percentage of discretionary income (income above a poverty-line-based threshold), which can dramatically lower monthly payments for borrowers with lower income relative to their debt, extend the repayment term (often 20–25 years), and forgive any remaining balance at the end of the term — though forgiven amounts under IDR plans have historically been treated as taxable income in the year forgiven, which borrowers need to plan for. IDR plans suit borrowers whose income is low relative to their loan balance, such as those in lower-paying public service careers, while Standard Repayment suits borrowers who can comfortably afford higher payments and want to minimize total interest and be debt-free sooner. Because IDR plan names, formulas, and availability have changed with legislation and legal challenges in recent years, checking the current options directly on the Federal Student Aid website before choosing a plan is essential rather than relying on older information.

What should I know about Student Loan Refinancing?

Refinancing replaces one or more existing student loans with a new private loan, ideally at a lower interest rate, which can reduce total interest paid or lower the monthly payment by extending the term. It's generally only available through private lenders, and the trade-off is significant: refinancing federal loans into a private loan permanently forfeits access to federal protections, including income-driven repayment plans, deferment and forbearance options, and federal forgiveness programs such as Public Service Loan Forgiveness. For this reason, refinancing federal loans tends to make sense mainly for borrowers with stable, high income who are confident they won't need federal flexibility — for example, someone with a well-paying job and no interest in public service careers who simply wants a lower rate than their federal loan's original rate. Refinancing purely private loans (which never had federal protections to lose) is a more straightforward decision, usually worthwhile whenever a meaningfully lower rate is available and the borrower's credit profile has improved since the original loan was taken out. Approval and rate depend heavily on credit score and income, so it's worth checking rate estimates from multiple lenders, which usually involves only a soft credit check, before committing to a hard application.

Repayment Plan Comparison at a Glance

Exception details and exact percentages vary by plan and are subject to periodic legal and regulatory changes, so the figures above should be treated as the general shape of each plan rather than a fixed current rule.

Worked Example: Standard 10-Year Loan Amortisation

A $35,000 federal student loan at a 6.5% annual interest rate is repaid on the Standard 10-year plan. Monthly interest rate: r = 0.065 / 12 ≈ 0.005417. Number of payments: n = 120. The standard loan payment formula is Payment = P × r / (1 − (1 + r)^−n). First find (1 + r)^n: (1.005417)^120 ≈ 1.912. So (1 + r)^−n ≈ 1/1.912 ≈ 0.5230. Now: Payment = 35,000 × 0.005417 / (1 − 0.5230) = 189.60 / 0.4770 ≈ $397.50 per month. Over 120 months that's a total of 397.50 × 120 ≈ $47,700 repaid, of which $47,700 − $35,000 = $12,700 is interest — meaning roughly 36% on top of the original balance is paid in interest over the full standard term, which is exactly the trade-off an income-driven or extended plan is weighed against when a borrower is deciding whether a lower monthly payment is worth a longer payoff and more total interest.

Worked Example: Estimating an Income-Driven Repayment Amount

IDR plans typically base the payment on 'discretionary income' — income above a multiple of the federal poverty guideline for the borrower's family size, which the government publishes and updates annually. Using a commonly applied 150%-of-poverty-line definition and an illustrative one-person 2024 federal poverty guideline of around $15,060: 150% of that is 1.5 × $15,060 ≈ $22,590. A borrower with an adjusted gross income of $45,000 has discretionary income of $45,000 − $22,590 = $22,410. At a typical IDR rate of 10% of discretionary income per year: $22,410 × 0.10 = $2,241 per year, or $2,241 ÷ 12 ≈ $186.75 per month — substantially less than the roughly $397 standard 10-year payment calculated earlier for a similarly sized loan, which is exactly the trade-off IDR plans are designed to offer in exchange for a longer repayment period and, usually, more total interest paid over the life of the loan.

Grace Periods and Capitalised Interest

Most federal student loans come with a grace period — commonly six months after leaving school or dropping below half-time enrolment — before the first payment is due, giving a borrower time to find work before repayment starts. Interest, however, typically keeps accruing on unsubsidised loans throughout school and during that grace period, even though no payment is required. If that accrued interest isn't paid off before repayment begins, it can capitalise — meaning it gets added to the principal balance, so future interest is then calculated on the new, larger amount rather than the original loan size. The same capitalisation risk applies during deferment or forbearance periods later in repayment: pausing payments can be the right short-term move during financial hardship, but any interest that built up during the pause is often added to the balance once payments resume, which is why paying even just the accruing interest during a pause (where affordable) can meaningfully reduce the total cost compared to letting it capitalise.