Introduction
Sarah, a recent college graduate in Columbus, Ohio, has $42,000 in federal student loans. She starts a new job paying $48,000 per year and needs to figure out her monthly payments. She has heard that the student loan system is changing in 2026 due to the One Big Beautiful Bill Act (OBBBA), and she is not sure which repayment plans are available to her. Should she stick with the Standard 10-year plan? Can she still use an income-driven plan? How much total interest will she pay over the life of the loan?
The student loan landscape changed significantly in 2026. The One Big Beautiful Bill Act (OBBBA) restructured the federal student loan system. Starting July 1, 2026, new borrowers will have two repayment options: the Standard Repayment Plan (fixed payments over 10 to 25 years depending on loan amount) and the Repayment Assistance Plan (RAP), an income-driven plan setting payments at 1% to 10% of adjusted gross income, with a $10 monthly minimum for incomes below $10,000 per year. RAP can end in forgiveness after 30 years of repayment. Borrowers who took out loans before July 1, 2026 retain access to existing plans including Standard, Graduated, Extended, and current income-driven plans (IBR, PAYE, ICR).
This calculator helps borrowers understand how much they will pay each month, how long repayment will take, and how much total interest will accumulate under different repayment plans. For general loan calculations, see our Loan Calculator or Amortization Calculator.
Inputs Required
- Total Loan Balance: The outstanding amount owed across all student loans
- Interest Rate: The annual interest rate on your loan(s)
- Repayment Plan: Standard (10 years), Extended (25 years), or Income-Driven (20 years)
- Annual Gross Income: Required for income-driven calculations to estimate the monthly payment cap
- Extra Monthly Payment: Any amount above the minimum you plan to add each month
Outputs Provided
- Monthly Payment: The estimated amount due each month under your selected plan
- Payoff Time: How many years and months until the loan is fully repaid
- Total Interest: Interest paid over the full repayment period
- Interest as % of Balance: Shows how much extra you pay relative to what you originally borrowed
- Potential Forgiveness: Estimated balance forgiven after 20 years on income-driven plans (if applicable)
How the Calculation Works
For Standard and Extended plans, the calculator uses the standard amortization formula to compute a fixed monthly payment that pays off the loan exactly at the end of the term.
Payment = Balance x [r(1 + r)^n] / [(1 + r)^n - 1]
Where r = monthly rate (annual rate / 12) and n = total months in the plan
For Income-Driven Repayment (IDR), the payment is estimated as 10% of discretionary income, where discretionary income is defined as gross income minus $20,000. This is a simplified approximation of plans like IBR and SAVE. Under the new Repayment Assistance Plan (RAP) effective July 1, 2026 for new borrowers, payments range from 1% to 10% of adjusted gross income, with a $10 monthly minimum for incomes below $10,000 per year. Actual IDR and RAP payments depend on family size, specific program rules, and annual income recertification.
IDR Monthly Payment = max(0, (Annual Income - $20,000) x 10% / 12)
How to Use the Calculator
- Enter your total outstanding student loan balance
- Input your interest rate, or select a common federal rate from the preset buttons
- Choose your repayment plan: Standard, Extended, or Income-Driven
- If using Income-Driven, enter your annual gross income to calculate the payment cap
- Optionally add an extra monthly payment to see how faster payoff reduces total interest
- Review the results panel for monthly payment, payoff time, and interest summary
Example Calculations
Example 1: Sarah's $42,000 Loan at 5.5%
Sarah has $42,000 in federal undergraduate loans at 5.5% interest. Standard Plan (10 years): monthly rate r = 5.5% / 12 = 0.004583, n = 120 months. Payment = 42,000 x [0.004583(1.004583)^120] / [(1.004583)^120 - 1] = $455/month. Total interest = 455 x 120 - 42,000 = $12,600. Total paid = $54,600. Extended Plan (25 years): n = 300 months. Payment = $258/month. Total interest = 258 x 300 - 42,000 = $35,400. Total paid = $77,400. The extended plan cuts the monthly payment by $197 but nearly triples the total interest. Adding $100/month extra on Standard: payoff in about 8 years, saving roughly $2,800 in interest. For Sarah's $48,000 salary, an income-driven plan would cap payments at approximately $233/month (10% of discretionary income: ($48,000 - $20,000) x 10% / 12), but the longer term means more total interest unless forgiveness applies.
Example 2: New Borrower Under RAP (Post-July 2026)
Michael borrows $35,000 for his undergraduate degree, with all loans first disbursed on or after July 1, 2026. Under the OBBBA, he has two options. Standard Plan (10 years at 6.5%): Payment = $398/month, total interest = $12,760, total paid = $47,760. Repayment Assistance Plan (RAP): Michael starts at $45,000 salary. His RAP payment is approximately 5% of AGI (the percentage scales from 1% to 10% based on income), which is about $188/month. This is significantly lower than the Standard Plan, but the 30-year forgiveness timeline means he could pay for decades. If his salary grows to $70,000 after 5 years, his RAP payment increases to approximately $292/month. Over 30 years, he may pay more total than the Standard Plan unless a significant balance is forgiven at year 30. The calculator helps Michael compare these scenarios side by side. For mortgage planning alongside student loan payments, use our Mortgage Calculator.
Real-World Scenarios
Recent Graduate on a Low Starting Salary
A new graduate in Atlanta earning $38,000 per year with $45,000 in loans may find the standard monthly payment of $490 unaffordable. Switching to an income-driven plan lowers the payment to approximately $150/month based on discretionary income (($38,000 - $20,000) x 10% / 12), providing breathing room while building career income. Under the new RAP plan for post-July 2026 borrowers, the payment would be even lower, starting at approximately 1% to 3% of AGI for lower incomes. The calculator shows that while the monthly burden drops, the total interest paid over 20 to 30 years increases significantly unless forgiveness applies.
Mid-Career Professional Targeting Payoff
A professional in Chicago earning $85,000 with $28,000 remaining at 6.5% adds $200/month in extra payments. The calculator shows this cuts the standard 10-year payoff to about 6 years and saves over $2,400 in interest. The total paid drops from approximately $38,300 to $35,900. This is a clear win for someone with budget flexibility. The extra payment strategy works best when the loan interest rate exceeds what you could earn in a savings account or low-risk investment. For comparing investment returns, use our ROI Calculator.
Public Service Worker Evaluating PSLF
A public school teacher in Sacramento with $60,000 in loans and a $52,000 salary enrolls in an income-driven plan. After 10 years of qualifying payments under Public Service Loan Forgiveness (PSLF), the remaining balance may be forgiven tax-free. The calculator helps estimate the 120 payments made and the likely forgiven amount. Under PSLF, the teacher pays approximately $267/month for 10 years (total of $32,040), and the remaining balance (potentially $40,000 or more depending on interest accrual) is forgiven. Note that PSLF eligibility requires working full-time for a qualifying government or nonprofit employer and making 120 qualifying payments under an income-driven plan. The OBBBA did not eliminate PSLF, but borrowers should verify their eligibility annually through the Federal Student Aid website.
Why This Calculation Matters
Student loan repayment is not one-size-fits-all. The right plan depends on your income, career trajectory, family obligations, loan disbursement date, and whether you qualify for forgiveness programs. The OBBBA changes effective July 1, 2026 narrow the options for new borrowers to Standard and RAP, while existing borrowers retain access to previous plans. Seeing the numbers clearly, including how much you will pay in total under each option, puts you in control of a decision that affects your finances for decades. A borrower who extends repayment from 10 to 25 years may pay two to three times more in total interest, which can amount to $20,000 or more in additional cost.
Common Mistakes to Avoid
- Mixing up federal and private loan rules: Federal loans offer income-driven plans and forgiveness options. Private loans do not. This calculator is most accurate for federal loans
- Ignoring interest capitalization: On income-driven plans, if your payment does not cover monthly interest, unpaid interest may capitalize and increase your principal over time
- Underestimating the cost of a longer term: Extending repayment to 25 years can cost two to three times more in total interest than the standard 10-year plan
- Not updating for rate changes: Graduate and PLUS loans carry higher rates than undergraduate loans. If you have multiple loans, calculate each separately or use a weighted average rate
- Assuming OBBBA changes apply to existing loans: The new RAP plan and narrowed repayment options apply to loans first disbursed on or after July 1, 2026. Existing borrowers generally retain access to their current plan options
Limitations of This Calculator
This calculator provides estimates based on simplified assumptions. The income-driven calculation uses a fixed 10% of discretionary income with a $20,000 threshold, which approximates some IDR plans but does not match every plan exactly. The new RAP plan scales payments from 1% to 10% of AGI based on income levels, and this calculator does not model that sliding scale precisely. Actual payments depend on family size, tax filing status, state of residence, and annual income recertification. The calculator does not model interest capitalization, which can significantly increase principal on income-driven plans. PSLF calculations are simplified and do not account for employment changes or payment gaps. For exact payment figures, use the Federal Student Aid Loan Simulator. For general loan payment calculations, see our Payment Calculator.