Frequently Asked Questions

A student loan is a type of financial aid designed to help students pay for post-secondary education expenses, including tuition, books, supplies, and living expenses. These loans typically have lower interest rates compared to other types of personal loans and offer flexible repayment options.

There are two main types:

• Federal student loans: Issued by the government with standardized terms and various repayment options.
• Private student loans: Issued by private lenders like banks, credit unions, or online lenders with terms that vary by lender.

The U.S. Department of Education offers several types of federal student loans through the William D. Ford Federal Direct Loan (Direct Loan) Program:

• Direct Subsidized Loans: For undergraduate students with financial need. The government pays the interest while you're in school.
• Direct Unsubsidized Loans: For undergraduate and graduate students, regardless of financial need. Interest accrues while you're in school.
• Direct PLUS Loans: For graduate students and parents of dependent undergraduate students. Requires credit check.
• Direct Consolidation Loans: Allows you to combine multiple federal student loans into a single loan with a fixed interest rate.

Student loan interest is the fee charged by lenders for borrowing money, calculated as a percentage of the principal (the amount you borrowed). Here's how it works:

• Fixed vs. Variable Rates: Fixed rates remain the same throughout the loan term, while variable rates can change based on market conditions.
• Accrual: Interest accrues (builds up) daily based on the outstanding principal balance.
• Capitalization: Unpaid interest may be added to your principal balance (capitalized) under certain circumstances, like after a deferment period, making your loan cost more over time.

You can use our Student Loan Interest Calculator to see how interest affects your specific loan situation.

Federal student loans offer several repayment plans to accommodate different financial situations:

• Standard Repayment Plan: Fixed payments over 10 years.
• Graduated Repayment Plan: Payments start low and increase every two years over 10 years.
• Extended Repayment Plan: Lower fixed or graduated payments over up to 25 years.
• Income-Driven Repayment Plans:
  • Income-Based Repayment (IBR): Payments based on family size and income.
  • Pay As You Earn (PAYE): Similar to IBR but with different eligibility requirements.
  • Revised Pay As You Earn (REPAYE): Available to all Direct Loan borrowers.
  • Income-Contingent Repayment (ICR): Only income-driven option for Parent PLUS loans.

Explore our Repayment Plans Guide for detailed information on each plan.

Income-driven repayment (IDR) plans set your monthly federal student loan payment at an amount that is intended to be affordable based on your income and family size. Here's how they work:

• Your payment amount is calculated as a percentage of your discretionary income (usually 10-20%).
• You must recertify your income and family size annually.
• Any remaining loan balance is forgiven after 20-25 years of qualifying payments.
• Forgiven amounts may be considered taxable income (though this is currently waived through 2025).

Use our Income-Based Repayment Calculator to estimate your payments under different IDR plans.

Several programs offer student loan forgiveness under specific conditions:

• Public Service Loan Forgiveness (PSLF): Forgives remaining balance after 120 qualifying payments while working full-time for a qualifying employer (government or non-profit).
• Teacher Loan Forgiveness: Up to $17,500 forgiven after five consecutive years teaching in low-income schools.
• Income-Driven Repayment Forgiveness: Forgives remaining balance after 20-25 years of payments under an IDR plan.
• Perkins Loan Cancellation: Up to 100% cancellation for certain teachers, nurses, and other public service professionals.
• Disability Discharge: Complete discharge for borrowers with total and permanent disability.

Each program has specific eligibility requirements and application procedures. Visit our Loan Forgiveness section for more details.

Refinancing means replacing your current student loans with a new loan, typically with a different interest rate and terms. Whether refinancing makes sense depends on your specific situation:

Potential benefits:

• Lower interest rate, potentially saving thousands over the loan term
• Simplified payments by combining multiple loans
• Customized repayment term
• Option to remove a cosigner

Important considerations:

• Refinancing federal loans with a private lender means losing access to income-driven repayment, loan forgiveness, and federal forbearance/deferment options
• Typically requires good credit (650+ score) and stable income
• May extend repayment period, increasing total interest paid

Use our Student Loan Refinance Calculator to see if refinancing could save you money.

Accelerating your student loan payoff can save you significant money on interest. Here are effective strategies:

• Make extra payments: Even small additional amounts directed to principal can shorten your repayment period dramatically.
• Refinance to a lower rate: If you qualify, a lower interest rate means more of your payment goes toward principal.
• Use the debt avalanche method: Focus extra payments on the highest-interest loans first while maintaining minimum payments on others.
• Set up biweekly payments: This results in making one extra payment per year.
• Apply windfalls: Use tax refunds, bonuses, or gifts to make lump-sum payments.
• Utilize employer repayment benefits: Some employers offer student loan repayment assistance as a benefit.

Always make sure any extra payments are applied to principal, not just advancing the due date.

Our calculators provide reliable estimates based on the information you input and current loan parameters. However, please note:

• Results are estimates and may not reflect exact amounts due to rounding, timing of payments, or program changes.
• Income-driven repayment calculations assume steady income growth and family size.
• Interest rates for refinancing options are estimates; actual rates will vary based on your credit score, income, and lender criteria.
• All calculators assume standard amortization schedules without prepayments unless specified.

For the most accurate projections, we recommend:

• Inputting precise loan details from your servicer's website
• Updating calculations whenever your circumstances change
• Using the results as a comparative tool rather than absolute values

Yes, your data security is our priority:

• All calculations are performed directly in your browser.
• We do not store or save any financial information you enter into our calculators.
• No personal identifiable information is required to use our calculators.
• We do not share any data with third parties or lenders.
• Our website uses secure HTTPS connections to encrypt data transmission.

You can use our calculators with confidence knowing your financial information remains private.

We offer several specialized calculators to help with different aspects of student loan management:

• Income-Based Repayment Calculator: If you're considering income-driven repayment plans and want to compare monthly payments based on your income and family size.
• Student Loan Refinance Calculator: If you have established credit and want to see if refinancing could lower your interest rate and monthly payments.
• Student Loan Interest Calculator: To understand how interest accrues on your loans and the impact of making extra payments.
• Loan Repayment Calculator: For comparing different standard repayment terms and strategies.
• Student Debt Projection Calculator: For students still in school who want to estimate their total debt and future payments.

If you're unsure where to start, our Income-Based Repayment Calculator is often a good first step as it helps identify which federal repayment programs might be best for your situation.

Student loan policies are subject to change as federal administrations and legislative priorities shift. Recent significant changes include:

• SAVE Plan Implementation: The Saving on a Valuable Education (SAVE) plan replaced REPAYE, offering more generous terms for many borrowers.
• Interest Accrual Changes: New policies preventing interest capitalization in certain circumstances.
• Public Service Loan Forgiveness Updates: Simplified application process and expanded eligibility for certain periods of deferment/forbearance.
• Fresh Start Initiative: Allowing defaulted borrowers to return to good standing.

For the most current information on policy changes:

• Check StudentAid.gov for official announcements
• Contact your loan servicer directly
• Sign up for our newsletter for updates on policy changes

Our calculators are regularly updated to reflect the latest program rules and interest rates.

Federal student loan policies implemented during the COVID-19 pandemic have largely returned to normal operation. Key updates include:

• Payment Pause End: The COVID-era payment pause and 0% interest period has ended. Regular payments and interest accrual have resumed.
• On-ramp Period: A 12-month "on-ramp" period after the pause ended helps borrowers transition back to repayment by preventing negative credit reporting.
• IDR Account Adjustment: One-time adjustment giving borrowers credit toward forgiveness for certain past periods.
• New SAVE Plan: Implemented as a more affordable income-driven repayment option.

If you're struggling to resume payments, consider:

• Applying for an income-driven repayment plan
• Exploring deferment or forbearance options
• Contacting your servicer to discuss your specific situation