Student Loan Calculator

It’s important before overextending yourself to leverage a Student Loan Calculator, such as the one below, that helps you determine your monthly student-loan payment and the time it would take to pay off your debt.

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See how your payments are allocated between interest and principal over time

Tips

Earn annual income of at least
at graduation to be able to afford to repay this loan.

Based on your monthly payment, you should consider this loan only if your annual income is going to be more than at graduation. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loan.

Save
by increasing your monthly payment.

Adding extra to your monthly payment would reduce your principal balance faster since more money would be left over after finance charges. Having a lower balance sooner in turn reduces your interest payments, as your interest rate would apply to a smaller amount and compounding would be diminished. In short, you’ll save a lot of money in the long run and get out of debt much sooner – if you can afford to scrimp now. But we know that adding extra to your monthly bills could be a big deal!

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Save
on interest if you are willing to make payments every two weeks

Making smaller payments more frequently is a great way to build discipline and improve budgeting efforts. It will also save you money on interest and help you get out of debt sooner. How? By making more than one payment per month, you would reduce your average daily balance – the amount your APR applies to. You would therefore pay less in interest each month. With lower monthly costs, more of your budgeted monthly payment will apply to your principal balance and you’ll be back above water ahead of schedule.

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by reducing the loan term to Years

The longer your loan term is, the more you’ll pay in interest. That’s because interest compounds over time, which means a given month’s finance charges are the result of applying your account’s APR to the sum of your principal balance and the interest you were charged the month before (and the month before that, etc.). In order to use this saving strategy, however, one must be able to afford higher monthly payments. You’ll save on interest in the long run; fewer monthly payments simply demand bigger monthly contributions.

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Cities with the Most Student Debt

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Expert Opinions

With tuition rates and other college costs rising every year, many parents struggle to finance their children’s college education. As a result, many students take on debt or forgo post-secondary education altogether. For advice on how to afford college and insight on the impact of student loans on the economy, we turned to a panel of experts in fields such as financial literacy, career development and consumer debt. Click on the experts’ profiles to read their bios and thoughts on the following key questions:

  • What are the most common mistakes people make when financing their post-secondary education?

  • What should people consider when applying for student loans?

  • What steps should someone take if they find they cannot afford their student-loan payments?

  • What impact, if any, does the large and growing amount of outstanding student-loan debt have on the economy as a whole?

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Joni E. Finney

Professor of Practice in the Graduate School of Education, and Director of the Institute for Research on Higher Education at University of Pennsylvania Joni E. Finney What impact, if any, does the large and growing amount of outstanding student loan debt have on the economy as a whole?

Because many low and middle-income families are already spending all or most of their income on living expenses, student debt is a burden they should not be required to bear in order to enroll in a community college or regional public institution. If these students have to stop-out or drop-out of college, many will not return due to family finances. As a result, they have student debt burden that cannot be forgiven and no benefit of a postsecondary education credential. Supporting these families with appropriate student aid to pay their total educational expenses (tuition + mandatory fees + room/board + books) would have a major impact on the economy as they earn their degrees. No state is currently producing enough postsecondary degrees demanded by the economy and high tuition and high debt policies will only hamper economic growth overall.

Another point for consideration is that "average debt burden" of college graduates — around $30,000 — does not consider those who have borrowed and dropped out. It underestimates the total debt burden. Annual undergraduate debt burden per student attending different types of institutions (in all 50 states) is a much better measure.

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Sandy Baum

Professor of Higher Education Administration in the Graduate School of Education & Human Development at George Washington University, and Senior Fellow at the Urban Institute Sandy Baum What are the most common mistakes people make when financing their post-secondary education?

Too many people make the wrong choice about where to enroll and what to study. That means they may be financing an endeavor in which they are unlikely to succeed, that leads to weak employment prospects even if they do succeed, or that is much more expensive than alternatives of equal or higher quality. But even people making the right choices about where to enroll, frequently make financing mistakes. The first issue is that many students who would be eligible for grant aid never complete the financial aid application process. Everyone should fill out the FAFSA! Free help is available for people who are struggling to do this on their own.

Another issue, of course, is whether and how much to borrow. Some students borrow too much. They take all the loans for which they are told they are eligible. Instead, they should think hard about what their needs will be over the course of the school year. This is particularly an issue for part-time students, who are eligible for the same amounts as full-time students. Borrowing federal loans is usually a good move. Borrowing can allow students to work less and devote more time to their studies. But borrowing moderately is important, and taking private loans in addition to — or instead of — federal loans is a good plan only in unusual circumstances. On the other hand, many students don’t borrow or don’t borrow enough. If they are struggling to make ends meet, they are less likely to succeed in their studies and experience the significant earnings return a postsecondary education should and usually does bring.

What should people consider when applying for student loans?

Most students should be sure to exhaust their eligibility for federal student loans before considering taking out private loans. Federal student loans come with important repayment protections. The relatively new income-driven repayment options mean that borrowers will not have to repay more than they can afford based on their incomes after college. Other loans don’t have that sort of insurance policy. Borrowing for college makes sense because it is an investment that pays off over a lifetime. But borrowing more than necessary can lead to undue burdens in the future. Stories about students with more than $50,000 in debt are common, but these students are actually quite rare. Most people borrow much less than that. But the students who have the most difficulty repaying are those who borrow small amounts of money and leave school without earning a degree.

What steps should someone take if they find they cannot afford their student loan payments?

Borrowers should look at the Department of Education website or contact their loan servicers for help. Borrowers with federal loans can participate in programs that link their payments to their incomes. If they are unemployed or have very low incomes, they won’t have to pay.

What impact, if any, does the large and growing amount of outstanding student loan debt have on the economy as a whole?

Some students borrow too much. Too many students borrow for programs that don’t get them anywhere. But the impact of the outstanding debt on the economy is greatly exaggerated in much of the popular discussion of the issue. It is good that more and more people are going to college and most of the borrowing is productive. The alternative of people not going to college is not a good one. We could pay much higher taxes and subsidize students more and maybe we should do that. But then, people would have higher taxes and lower loan payments. The evidence is strong that much of the debt accumulated for study at for-profit colleges will never be repaid and frequently has not led to good outcomes. We should prevent students from borrowing for weak programs. But what really matters is the circumstances of individuals, not the aggregate amount of debt.
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Bruce Johnstone

Distinguished Service Professor of Higher and Comparative Education Emeritus at the State University of New York at Buffalo Bruce Johnstone What are the most common mistakes people make when financing their post-secondary education?

  • Electing an undergraduate education is far more expensive than public alternatives and is possible only with borrowing that can be projected to exceed circa $30,000 - $40,000.
  • Private borrowing.
  • Excessive borrowing relative to likely future income – especially at graduate or advanced professional levels (e.g., heavy debts for second and third rate law schools, on top of undergraduate debts).


What are the most common mistakes people make when financing their post-secondary education?

  • The real interest rate – especially taking into consideration in-school subsidization of interest.
  • The likely total indebtedness he/she will have incurred having completed education and started his/her first “real job.“.
  • The likely starting salary of this first “real job.”


What steps should someone take if they find they cannot afford their student loan payments?

Get into one of the income-based repayment plans.

What impact, if any, does the large and growing amount of outstanding student loan debt have on the economy as a whole?

It depressed the starter housing market, consumer spending generally, and worsens income disparities.
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William Doyle

Associate Professor of Higher Education in the Department of Leadership, Policy and Organizations at Peabody College of Vanderbilt UniversityWilliam Doyle What are the most common mistakes people make when financing their post-secondary education?

Working too much while enrolled. The worst outcome for most people is to have debt, but no degree. If your family and life circumstances permit, it is much better to enroll full-time. To earn money, if at all possible, try to find part-time work on campus. Don’t let work keep you from graduating in a reasonable amount of time. It’s going to be better in the long run to have a degree and be able to get a better job than to still be working a lower-skilled job while taking a much longer time to graduate — if you graduate at all.

What should people consider when applying for student loans?

Earnings differ a lot by field of study — generally more than they do by type of institution. Make sure that the amount that you borrow and the monthly repayments are in line with likely earnings in your field of study. The college scorecard and collegemeasures.org both have information on earnings of students who have attended certain institutions. Collegemeasures.org includes earnings by field of study for certain states.

What impact, if any, does the large and growing amount of outstanding student loan debt have on the economy as a whole?

The short answer is: we don’t really know. We’ve engaged in a societal-level experiment in financing higher education through student debt. It could change the behavior of young people in many ways — it might affect the kinds of jobs they work in, their purchase of homes, and many other aspects of their lives. The problem is that we as a society “drifted” into funding higher education through student debt without ever having a clear discussion of the possible negative outcomes. Some amount of debt is manageable, particularly for those with degrees, but we as a society haven’t come to anything close to a consensus on what’s reasonable to expect young people to borrow.
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Drew M. Anderson

Postdoctoral Researcher in the HOPE Lab and in the Center for Financial Security at University of Wisconsin-MadisonDrew M. Anderson What are the most common mistakes people make when financing their post-secondary education?

It would be a mistake not to seriously consider the investment you are making by starting a post-secondary education, in terms of both what you put in: time, effort, and of course money, and what you get out: hopefully a degree, but also learning, job skills, social networking, and other personal growth.

Research is not clear on whether it is common for people to be uninformed when making college financing decisions, though young people demonstrate lower levels of financial literacy, and college financing could be their first major financial decision. Research on the impact of reminders and nudges is showing that people are often inattentive to college financing choices, which is a kind of mistake.

Just because many people start college and do not finish, this is not necessarily evidence of a mistake -- it's tough to predict exactly how college is going to go. Income-based repayment of loans is meant to insure people who decided to borrow against this kind of outcome. Grants and affordable tuition also help lessen the impact of not ending up completing a degree.

What should people consider when applying for student loans?

There are tools online that inform student loan borrowers, including the federally required counseling that contains lots of good information, but could be tough to digest and easy to skip through if you are in a hurry.

Some simple rules: look first for scholarships, then federal loans (lower interest rates and more friendly repayment terms), then private loans (if needed at all). Borrow only as much as you need. You are allowed to choose any amount up to the maximum amount you are offered. And remember that you have to pay loans back! But there are lots of options to help you manage repayment.

Counseling programs also encourage students to think about your finances now, what your finances will be during college (this requires applying for financial aid at a particular institution), and what you predict they'll be after college (this requires making predictions about your income and thinking about your loan payment, but there are online calculators to help you do this). If you think you can finish college and you think you can afford it, it's usually a great investment.

What steps should someone take if they find they cannot afford their student loan payments?

There are repayment plans for all types of situations. Actually there are so many repayment plans that it can be confusing. But there is likely one that can help you.

You must contact your loan servicer to change plans. But finding who your loan servicer is may also be confusing as there could be multiple servicers across your loans and they could change (I know this is true for my student loans). And loan servicers vary in how helpful they are in finding the right plan for borrowers, though the Consumer Financial Protection Bureau is working to improve this by putting forth standards for student loan servicing.

What impact, if any, does the large and growing amount of outstanding student loan debt have on the economy as a whole?

This question is often framed as what indebted young adults do differently from less indebted young adults, for example whether they take different jobs or make different purchases and housing choices. Research varies on this question, and in most cases it is tough to make the comparison of loan vs. no loan while holding all else constant. After all, these loans help people purchase education! If there are any degrees earned that wouldn't have been possible without loans, then those degrees and the education behind them boost wages and productivity and help the economy, implying that the availability of loans was helpful to the economy. However, research also varies on whether additional degrees are made possible by loans. This literature centers around the debate over whether students who could benefit from college are "credit constrained" by a lack of financing options.
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Linda Herrera

Professor of Education Policy, Organization and Leadership, and Director of Global Studies in Education at University of Illinois at Urbana-ChampaignLinda Herrera What are the most common mistakes people make when financing their post-secondary education?

The most common mistake people make is to think about student loans as "easy" money; they are not! Student debt weighs on students and, oftentimes, their families far into the future. It can lead to garnished wages, prolonged periods of financial instability, and depression. My main point to students and parents is that they should avoid student debt at all costs, particularly to pay for undergraduate education. To the extent that it is possible, choose a college that is affordable for your circumstances.

What should people consider when applying for student loans?

People should consider the long-term costs of these loans for students and their families. Rarely is it in the best interest of a family to carry the burden of debt for an undergraduate education.

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