Compare Student Loan Repayment Plans
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How It Works
The standard plan uses the amortization formula: payment = balance x r / (1 - (1+r)^-n), with r the monthly rate. Total interest is the sum of payments minus principal. For extra payments we simulate month by month, adding your extra amount to the standard payment and stopping when the balance hits zero, then measure the interest saved. The income-driven plan here is simplified to 10% of annual income divided by 12, capped at the standard payment; if that payment is below the interest, the balance grows and any remainder after 25 years is shown as forgiven. The chart plots the remaining balance for each plan over time so you can see how fast each reaches zero.
What Should You Do?
If you can afford it, extra payments are almost always the cheapest path because every extra dollar reduces the balance that later accrues interest. Even small amounts matter. Choose income-driven repayment when your standard payment is unaffordable; it protects cash flow but often costs more in total interest and may leave a taxable forgiven balance. Whatever plan you pick, avoid missing payments, since delinquency triggers fees and credit damage. Re-run this simulator whenever your income or rate changes, such as after refinancing.
Frequently Asked Questions
Is the income-driven math realistic?
It is simplified to 10% of income for illustration. Real IDR plans use discretionary income and have several variants with different formulas and forgiveness terms.
Why does extra payment save so much?
Extra principal reduces the balance immediately, so future interest is computed on a smaller amount. The savings compound across the remaining life of the loan.
Is forgiven debt really free?
Forgiven balances can be treated as taxable income in some plans, creating a tax bill. The simulator shows the raw forgiven amount, not the tax consequence.
Should I refinance to a lower rate?
Refinancing can cut interest, but it moves federal loans out of income-driven and forgiveness protections. Weigh the rate savings against lost flexibility.
What if my rate is 0%?
The tool handles a zero rate by splitting principal evenly; total interest is then zero and payoff time is simply the balance divided by the monthly payment.