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    Higher education has never been more confusing or expensive. Our goal is to help you navigate the very big decisions related to higher ed with objective information and expert advice. Each piece of content on the site is original, based on extensive research, and reviewed by multiple editors, including a subject matter expert. This ensures that all of our content is up-to-date, useful, accurate, and thorough.

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    Student Loan Calculator

    By Gabriel Jimenez-Ekman

    Gabriel Jimenez-Ekman is a content editor and writer at Scholarships360. He has managed communications and written content for a diverse array of organizations, including a farmer’s market, a concert venue, a student farm, an environmental NGO, and a PR agency. Gabriel graduated from Kenyon College with a degree in sociology.

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    Edited by Maria Geiger

    Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.

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    Updated: February 27th, 2024
    Student Loan Calculator

    Whether you are deciding which type of loan to take out, how much you’re willing to borrow, or figuring out how much you’ll have to repay now that you’re in debt, a student loan calculator can be a very handy tool. Using our simple student loan calculator, we can answer your questions about student loans and help steer you in the direction of other resources.

    Calculator tool

    Enter the details of the loan you’ve taken out or the one you’re considering taking out here for details:

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    Understanding student loan terminology

    We get it – student loan terminology can be a bit tricky. To ensure that you feel confident about the data you’re entering into our calculator, we’ve included a glossary of some basic student loan terminology here. If you have questions about a term that isn’t mentioned, check out our full article on student loan definitions.

    Interest rate

    Interest rates are the chief determinant of how much additional money you’ll end up paying back. If your interest rate is 5%, you’ll end up being charged an additional 5% of your outstanding balance during every year of your repayment.

    Student loans typically use the simple interest model, which means that you will only ever be charged interest on your principal balance. In other words, you’ll never accumulate more interest based on the interest you owe. However, some private lenders use compound interest. Beware that under compound interest, you could end up owing interest on your outstanding interest.

    Federal loans offer the same interest rates to all borrowers. However, private loan interest rates vary based on the borrower’s credit score. The higher your score, the lower your interest rate will be.

    Also see: Navigating different types of student loans

    Loan amount

    The loan amount is the total sum of money that you borrow from a lender. It does not refer to the amount you’ll pay back, but rather the amount that you borrowed initially. It becomes your principal balance.

    Related: Federal student loans: everything you need to know

    Loan term

    The loan term is the period over which you will repay your loan. The typical federal loan term is 10 years, but borrowers can adjust this by changing their repayment plans. Private loans also usually tend to be 10 years but there are exceptions.

    If you end up earning a high salary after graduation or come into money, many loan servicers will allow you to pay back your loan early, which will result in less interest paid overall. But if this seems like a possibility for you in the future, make sure to check with your potential servicer about penalties or benefits before signing a deal.

    Also see: Paying back student loans early

    Private loans

    Private loans are loans offered by private corporations like banks, credit unions, or a state-based organization. These corporations offer loans with the incentive to make money; as a result, their terms are generally less favorable to lenders.

    Federal loans

    Public loans are issued by the government and usually executed through private corporations. They are not designed with the intent of making money, and usually have lower interest rates and more favorable repayment terms for lenders.

    Fixed vs. variable rates

    All federal student loans and some private student loans have fixed interest rates. With a fixed interest rate, your initial interest rate will be the same as the rate at the end of your repayment. It will not change at all over the course of the loan. 

    On the other hand, a variable interest rate fluctuates based on the market and select indexes. So, it will not remain constant throughout the span of your loan. These are less predictable and generally less favorable for borrowers. Only some private loans use variable loans.

    If students take out loans with a fixed interest rate and find that rates drop significantly, they can also look into refinancing their loans to secure a lower rate.

    Yearly limits for federal loans

    Federal loans are typically the best deal for students, but they also have an annual lending limit. Here is the maximum amount you can take out per year in federal loans. Keep in mind this number changes year-by-year, but the changes are typically incremental.

    Undergraduate students

    • Direct Subsidized Stafford Loans – $5,500 per year (including a maximum of $3,500 in subsidized loans) 
    • Direct Unsubsidized Loans – $9,500 per year (including a maximum $3,500 in subsidized loans) 

    Graduate students

    • Direct Unsubsidized Loans – $20,500 per year
    • Direct PLUS Loans: You can borrow an amount as high as the school’s reported cost of attendance, minus any other financial aid you’ve earned or received

    Parents of students pursuing undergraduate degrees

    • Parent PLUS loans: You can borrow an amount as high as the school’s reported cost of attendance, minus any other financial aid your child earned or received

    Additional student loan resources

    If you’re shopping around for student loans, it’s usually a good idea to look towards federal loans first. They typically have lower interest rates and more flexible repayment terms; you’ll be able to apply for income-driven repayment plans, defer your loans if you go to grad school, and apply for public service loan forgiveness. But many students end up taking out private loans in conjunction with their federal loans 

    It’s important to keep a discerning eye when it comes to private loans, as some have more favorable terms than others. Private student loan marketplaces are a great way to compare options side-by-side and find the best one for you.

    Also see: Navigating different types of student loans

    Frequently asked questions about the student loan calculator

    Do student loans have compound or simple interest?

    All federal student loans have simple interest, which means that they will not accumulate interest on the interest owed. Many private loans also have simple interest, but some have compound interest. 

    Be sure to check what type of interest your private loan has before signing anything. This can make a big difference down the line, especially if you have problems paying your loan back.

    What is student loan default?

    Student loan default is what happens when a borrower fails to make their student loan payments over a period of time. It typically results in severe financial penalties as well as damage to your credit score. Federal loans usually put more tools at students’ disposal to avoid default than private loans, such as income-driven repayment plans.

    Can I reduce monthly student loan payments?

    Oftentimes, borrowers offer options to reduce your monthly student loan payments. Federal loans are usually more flexible with these options, offering income-driven repayment plans and, in some cases, deferment. Private loans, on the other hand, can be stricter, and if they charge compound interest, these reduced payments will end up costing you more.

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