Why your balance is bigger than what you borrowed
On an unsubsidised loan, interest starts the day the money is disbursed — not the day you graduate. Through however long you remain enrolled, plus the grace period after it, that interest builds up unpaid. When repayment begins it is capitalised: added to the principal, so from then on you are paying interest on the interest.
That is the single mechanic behind the most common complaint about student debt — that the balance went up despite years of payments. The first figure above is therefore the balance on the day repayment starts, and beneath it the calculator prices what capitalisation costs you across the whole term. Paying just the accruing interest while you are still in school avoids all of it, which is usually the highest-return payment available to a student.
Subsidised loans are different: the government covers the interest while you are enrolled, so nothing capitalises. The unsubsidised share field is what separates the two, and it matters more than most people expect.
How to use this calculator
- Amount borrowed across all loans, or your current balance if you are already repaying.
- Rate. Federal rates are fixed per loan and set each academic year, so a four-year degree usually means several rates. Use the balance-weighted average, or run the largest loan separately.
- Unsubsidised share. Set it to zero if you have finished school, since the accrual has already happened and is in your balance.
- Months enrolled and the grace period, which together set how much accrues before your first payment.
- Term, then read the table: it prices ten to thirty years side by side so you can see exactly what buying a lower payment costs.
- Extra payment, if you can make one, to see how many payments it removes.
What income-driven plans do, and why they are not modelled here
Federal borrowers can repay as a share of discretionary income rather than as a fixed amount, with a balance written off after a set number of years. Those plans are the reason federal loans are not comparable to private debt, and for many borrowers they are the right choice.
This calculator does not compute them, deliberately. Their formulas are set by statute, the available plans were restructured in 2026, and the payment depends on your income, family size and loan type in ways that change with each rule revision. A number produced from a stale formula would look authoritative and be wrong, and people make ten-year decisions on these figures. Use the official Loan Simulator at studentaid.gov for an income-driven estimate; it is maintained by the Department of Education and reflects the current rules.
What this page does instead is answer the fixed-payment question accurately — what a given balance costs on a given term — which is also the comparison you need if you are weighing a private refinance.
Before you refinance federal loans
A private lender may offer a lower rate than your federal loans. Taking it converts federal debt into private debt permanently, and you give up the entire federal side of the ledger: income-driven repayment, the deferment and forbearance provisions, any forgiveness programme including Public Service Loan Forgiveness, and the discharge that applies on death or total disability.
For a borrower with a stable high income, no interest in public-sector work and no need for a payment safety net, that trade can be worth a meaningful rate cut. For anyone whose income might fall, whose career might lead into public service, or who would struggle with a fixed payment during a bad year, it usually is not — the protections you are selling are worth more than the rate you are buying.
Refinancing private loans into other private loans carries none of that risk. If that is your situation, the loan calculator compares offers on APR, which counts the fees as well as the rate.
Paying it down faster
- Pay the interest while enrolled. Even partially. It is the only payment that prevents capitalisation rather than merely reducing a balance.
- Target the highest rate first when you have several loans, and say so in writing to your servicer — extra money is otherwise commonly spread across loans or treated as an advance payment, neither of which is what you wanted. The debt snowball calculator orders multiple balances.
- Keep the standard term and pay extra rather than choosing a longer term for safety. A longer term locks in a higher total cost; extra payments on a short term are voluntary.
- Check for an autopay discount, usually a quarter of a point on federal loans, which costs nothing.
- Do not chase the balance at the expense of a retirement match. An employer match is an immediate return that no loan rate beats — the 401(k) calculator quantifies it.
What this calculator assumes
- A fixed rate for the whole term, which is true of federal loans and of some private ones.
- Interest accrued monthly on the unsubsidised share while enrolled and through the grace period, then capitalised once at repayment. Servicers accrue daily, so a statement will differ slightly.
- One capitalisation event. In practice capitalisation can also follow a deferment, a forbearance or leaving certain plans, each of which repeats the effect.
- No income-driven repayment, no forgiveness and no interest subsidy beyond the enrolled period for subsidised loans.
- Every payment made on time, with no deferment or forbearance.
- No tax treatment. The student loan interest deduction can reduce the after-tax cost for some filers and is not modelled.
These are planning estimates. Your servicer’s figures govern, and your promissory note is the authority on rates and fees.
Student loan questions people ask
Should I pay interest while I am still in school?
If you can, yes. It is the only way to stop unpaid interest being added to your principal at repayment, after which you pay interest on it for the whole term. The result above prices exactly what that capitalisation costs, and it is usually far more than students expect.
What is the difference between subsidised and unsubsidised loans?
On a subsidised federal loan the government pays the interest while you are enrolled at least half time and during the grace period, so nothing accrues. On an unsubsidised loan the interest is yours from the day of disbursement. Both usually carry the same rate, so the difference is entirely in who pays during school.
Is a longer repayment term a good idea?
It lowers the payment and raises the total cost substantially, which the table above quantifies. If the standard payment is genuinely unaffordable, a federal income-driven plan is usually a better route than a longer fixed term, because it adjusts with your income and can end in forgiveness.
Will paying extra shorten my loan or lower my payment?
It shortens the loan; the required payment stays the same. Tell your servicer to apply extra money to principal on a specific loan, otherwise it may be treated as paying next month early, which achieves much less.
Can I have student loans forgiven?
Federal loans have forgiveness routes, most notably Public Service Loan Forgiveness for people working for government or qualifying non-profits, and the write-off at the end of an income-driven plan. Eligibility rules are specific and have changed, so check studentaid.gov rather than any calculator, including this one. Private loans have no equivalent.