Student Loan Repayment Planner Calculator

Purpose and model boundary

Use this to price a student loan on the repayment term you choose, and to put the ten, twenty and twenty-five year terms beside it from the same balance and rate, so the cost of a longer plan is a number rather than a feeling. It also prices what happens before repayment starts: the interest that builds up during school, a grace period or a deferment, and what it costs once it is added to the balance and begins earning interest of its own.

Income-driven repayment is not modelled. Those plans set the payment from what you earn and can forgive a remaining balance, which is a different calculation from the fixed plans priced here.

Inputs and units

Governing relationships

Interest before repayment is accrued simply on the balance, at the annual rate over twelve for each month of the deferral. It does not compound over that window.

What happens to that accrued interest is the choice you make. Where it is added to the balance, repayment starts from the balance plus it, and from that day it earns interest like the rest of the loan. Where it is not, it is paid off instead: money you handed over, but never principal.

The monthly payment is the level amount that clears the balance repayment actually starts from, at the monthly rate, over the number of months in the term. Each month is then charged one twelfth of the annual rate on the balance at the start of it, the payment is applied, and any extra goes entirely to the balance.

The ten, twenty and twenty-five year figures are the same calculation run three more times at those terms, on the same starting balance and the same rate, which is what makes them comparable with the term you chose.

Calculation sequence

This is the order in which the reported figures depend on one another, each step traceable to what the calculator says a figure is built from. It is not a claim about the order in which the workbook evaluates its own cells.

1. Accrue interest over the months before repayment starts, at the rate over twelve on the balance, with no compounding across that window.
2. Add that interest to the balance, or set it aside as interest paid, according to the choice you made.
3. Take the balance repayment starts from, which is what every figure below is computed against rather than what you originally borrowed.
4. Work out the level payment that clears it over the term you chose.
5. Unroll the plan month by month with any extra payment added, to get the months it really takes and the interest charged along the way.
6. Add every payment together to get what leaves your account over the whole plan.
7. Run the same calculation at ten, twenty and twenty-five years to get the payment and the interest each of the published fixed terms would produce.
8. Rerun the interest across a grid of terms and rates, so the trade between a smaller payment and a larger total is visible rather than asserted.

Outputs and interpretation

Model Status reads OK, or explains why the inputs are not valid or why a figure deserves a second look. It is shown alongside the results rather than in place of them.

The calculator also returns a grid that reruns the interest across a range of terms and rates at once. Its axes, corner and body arrive as separate values and are the grid's parts rather than results to read on their own; the page assembles them into the table.

Every figure above is returned by the model. The page arranges and formats them; it computes none of them.

Validation and status logic

These are the states the delivery's own recorded runs exercise, so the table records what this calculator has been observed to return rather than every branch it could take. A figure that moves with the inputs is shown as ….

Assumptions and limitations

• Interest is charged once a month during repayment, at the annual rate divided by twelve on the balance at the start of the month. A servicer accruing daily will differ slightly, usually by less than a dollar a month on an ordinary balance.
• Interest before repayment is accrued simply rather than compounded over that window, which matches how student loan interest is usually described.
• Income-driven repayment, graduated and extended plans, forgiveness of any kind and interest subsidies are all outside the model.
• Origination fees, late fees and servicer fees are not modelled.
• Several loans added together and priced at one blended rate is an approximation. Loans at genuinely different rates pay off at different speeds and the blend hides that.
• A private loan on a variable rate will not behave like this, because the rate here is held fixed for the whole plan.

Restrictions and non-computing states

This calculator enforces the numeric limits recorded above before the plan is unrolled, so a value outside them is refused rather than answered.

A choice has to be made about the interest that builds up before repayment, because the two answers differ and neither is a safe default to assume on your behalf.

A balance of nothing is answered rather than refused, with every figure reading nothing, because nothing about those inputs is contradictory; the status line says so rather than letting a page of zeros look like an answer.

The plan is unrolled for a limited number of months. A term that runs past that window is followed only as far as it reaches, and the status line says every figure stops there.

Errors and warnings

NOT VALID means the inputs do not describe a loan this calculator can answer, and the figures beside it should not be relied on. CHECK is not an error: the arithmetic is sound and the figures stand, but something about the plan is worth knowing first, such as how much a deferral has added to what you owe. The status is shown with the results rather than in place of them, so a flagged answer is still a readable one.

A value the page itself refuses, because it falls outside the limits above, is rejected before the calculation is requested and no figures are returned at all. That is different again from a transport or service failure, where the page reports that the result could not be fetched rather than showing a stale or partial one.

The statutory source for federal student loan repayment, including the fixed plans priced here and the income-driven plans this calculator deliberately does not model, is the US Department of Education's Loan Simulator.

The interest rates that apply to a federal loan are fixed at the rate of the year the money was paid out; the current figures are published by the Department in its announcement of Direct Loan interest rates.

On how interest accrues before repayment, and on what happens to it when repayment begins, see Bankrate on how to calculate student loan interest and NerdWallet's account of the same calculation. Both describe a daily accrual where this model charges once a month, a difference of a few dollars a year on an ordinary balance, and both state that the interest does not compound over that window.

These sources provide background; they do not supply the calculator's assumptions or certify its result. This calculator is informational and is not financial, investment, or tax advice. Income-driven repayment and forgiveness of any kind are outside it, and for a federal loan the official simulator is the place to price those.