Student loan payoff strategy calculator

Federal student loan repayment: comparing your options

Federal student loans offer multiple repayment paths, and the best choice depends on your income, family size, career sector, and loan balance. The difference in lifetime cost between plans can be $50,000 to $200,000+ for a borrower with high debt and modest income. This calculator compares Standard, IBR, and SAVE plans side-by-side so you can see the actual numbers.

Standard 10-year repayment

The default plan amortizes your loan over 120 months at a fixed payment. The formula is identical to any loan amortization:

P = L × r(1+r)^n / [(1+r)^n - 1]

Where L is the loan balance, r is the monthly interest rate (annual rate ÷ 12), and n is 120 months. Standard repayment minimizes total interest paid and is the best choice for borrowers who can afford the payment and don't qualify for forgiveness.

Income-Based Repayment (IBR)

IBR ties your payment to income rather than balance. The key formula: payment = 10% (or 15% for older borrowers) × (AGI - 150% of poverty line). In 2024, the federal poverty guideline for a single person is $14,580, so 150% = $21,870. A single borrower earning $55,000 pays 10% of ($55,000 - $21,870) = $3,313/year or $276/month — regardless of loan balance. After 20 years of qualifying payments, the remaining balance is forgiven.

SAVE plan (formerly REPAYE)

SAVE is the newest and most generous income-driven plan for most borrowers. It uses 225% of the poverty line as the income exclusion (vs. 150% for IBR), and caps payments at just 5% of discretionary income for undergraduate loans. On a $55,000 income, the poverty exclusion is $32,805 (225% × $14,580), leaving only $22,195 as discretionary — and 5% of that is $1,110/year or $93/month. SAVE also prevents negative amortization (interest can't exceed your payment) which protects borrowers from growing balances.

Public Service Loan Forgiveness

PSLF forgives the entire remaining balance after 120 qualifying payments (10 years) for employees of government and nonprofit organizations. Unlike IDR forgiveness, PSLF forgiveness is permanently tax-free. For a borrower with $100,000 in debt earning $65,000 at a nonprofit, the expected forgiven balance can be $80,000–$120,000 — making PSLF one of the most valuable financial benefits available to public service workers.

Private loans: fewer options, act fast

Private student loans don't qualify for any federal income-driven plans or forgiveness programs. For private loans, refinancing is often the primary lever — consolidating multiple private loans into a single loan at a lower rate can save thousands in interest. Be cautious about refinancing federal loans into private loans: you permanently lose access to IDR plans and forgiveness when you refinance federal loans.