Calculate Your Student Loan Payoff
| Year | Principal Paid | Interest Paid | Remaining Balance |
|---|
Understanding Student Loan Repayment
The average student loan debt for a bachelor's degree graduate in the US is around $30,000-$35,000. Understanding your repayment options is critical to minimizing total cost and becoming debt-free as quickly as possible.
How Student Loan Interest Works
- Daily interest accrual: Interest accrues daily on your outstanding balance. Daily rate = annual rate / 365.
- Capitalization: Unpaid interest (from forbearance, deferment, or income-driven plans) gets added to your principal, causing you to pay interest on interest.
- Amortization: Early payments are mostly interest. Over time, more goes to principal. Extra payments accelerate this shift dramatically.
Federal Student Loan Interest Rates (2026-27)
| Loan Type | Rate | Borrower |
|---|---|---|
| Direct Subsidized | 6.52% | Undergraduate |
| Direct Unsubsidized | 6.52% | Undergraduate |
| Direct Unsubsidized | 8.07% | Graduate/Professional |
| Direct PLUS | 9.07% | Graduate/Parents |
Rates effective for loans first disbursed July 1, 2026 – June 30, 2027, set from the May 2026 10-year Treasury note auction plus a statutory add-on. Private loan rates vary from 4-15% based on credit score and lender.
Federal Repayment Plans
| Plan | Term | Payment | Forgiveness |
|---|---|---|---|
| Standard | 10 years | Fixed | None |
| Tiered Standard | 10-25 years (by amount borrowed) | Fixed; default for loans first disbursed on or after July 1, 2026 | None |
| Graduated | 10 years | Starts low, increases every 2 years | None |
| Extended | 25 years | Fixed or graduated | None |
| RAP | Up to 30 years | 1-10% of adjusted gross income, minus $50 per dependent | After up to 30 years |
| PAYE | 20 years | 10% of discretionary income | After 20 years |
| IBR | 20-25 years | 10-15% of discretionary income | After 20-25 years |
| ICR | 25 years | 20% of discretionary income | After 25 years |
| SAVE Plan (Ended) | — | Stopped by court order (March 10, 2026) | — |
Status (September 2026): A federal court order on March 10, 2026 stopped the SAVE Plan, so borrowers whose loans were in SAVE forbearance must choose another plan. Loans first disbursed on or after July 1, 2026 go on the Tiered Standard Plan unless you pick another plan such as RAP, and receiving one ends your eligibility for IBR, ICR and PAYE. The One Big Beautiful Bill Act eliminates ICR and PAYE by July 1, 2028.
The Power of Extra Payments
Even small extra payments make a massive difference. On a $35,000 loan at 6.5% over 10 years:
| Extra/Month | Payoff Time | Total Interest | Interest Saved |
|---|---|---|---|
| $0 | 10 years | $12,634 | — |
| $50 | 8.2 years | $10,092 | $2,542 |
| $100 | 7.0 years | $8,260 | $4,374 |
| $200 | 5.5 years | $6,109 | $6,525 |
| $500 | 3.2 years | $3,461 | $9,173 |
Key rule: When making extra payments, tell your loan servicer to apply the extra amount to principal only, not advance your due date.
Student Loan Forgiveness Programs
- Public Service Loan Forgiveness (PSLF): Federal loans forgiven after 120 qualifying payments while working for government or nonprofit. Tax-free forgiveness.
- Income-Driven Repayment Forgiveness: Remaining balance forgiven after 20-25 years of payments (up to 30 years on RAP). Currently taxable as income (may change).
- Teacher Loan Forgiveness: Up to $17,500 forgiven for teachers serving 5+ years in low-income schools.
- State-Specific Programs: Many states offer loan repayment assistance for healthcare workers, lawyers, and public servants.
Related Calculators
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