Navigating Your Student Loan Repayment

Our Student Loan Calculator is a vital tool for current students and recent graduates looking to plan for the future. Understanding how your loan balance can change before you even make your first payment is the key to managing your debt effectively. This calculator is specially designed to account for factors unique to student loans, such as deferment and interest capitalization.

How Capitalized Interest Works (And Why It Matters)

The single most important concept for unsubsidized student loans is capitalized interest. Here's how it works:

• While you're in school and during your grace period, you are not required to make payments.
• However, with unsubsidized loans, interest is still being calculated on your loan balance during this time.
• When your repayment period begins, all of that accrued interest is "capitalized," meaning it's added to your original loan principal.
• From that point forward, you pay interest on this new, larger balance. This means you'll be paying interest on your interest.

Our calculator shows you exactly how much interest will be capitalized, giving you a true starting point for your repayment journey.

Federal vs. Private Student Loans

Understanding your loan type is crucial as it affects how interest is treated:

• Federal Subsidized Loans: The U.S. Department of Education pays the interest on these loans while you're in school at least half-time, during your grace period, and during periods of deferment. Our calculator's "No" option for accruing interest is perfect for this loan type.
• Federal Unsubsidized Loans & Private Loans: You are responsible for all interest that accrues from the moment the loan is disbursed. You can choose to pay this interest as it accrues to avoid capitalization, or let it be added to your principal later. The "Yes" option in the calculator models this common scenario.

Strategies to Manage Student Loan Debt

Use this calculator to explore different scenarios and build a better repayment strategy:

• Pay interest while in school: If you have an unsubsidized loan and can afford it, making small interest-only payments while in school will prevent capitalization and lower your total repayment cost significantly.
• Increase your monthly payment: Once repayment begins, see what happens if you pay an extra $50 or $100 per month. The calculator will show you how much faster you'll be debt-free and how much you'll save in total interest.
• Consider refinancing: After graduating and building a good credit history, you may be able to refinance your student loans to a lower interest rate, reducing your monthly payment and total cost.