Student Loan Calculator Formula & How It Works
Standard 10-yr: M = P × [r(1+r)¹²⁰] / [(1+r)¹²⁰ − 1] | IDR: M = (AGI × 10%) ÷ 12
- Standard plan: fixed payment over 10 years
- Graduated plan: starts low, increases every 2 years
- IDR (income-driven): 10% of discretionary income (SAVE plan)
- Public Service Loan Forgiveness (PSLF) after 10 years
Federal student loans offer multiple repayment plans. The Standard 10-year plan has the highest monthly payment but lowest total interest. Income-driven plans (IBR, SAVE, PAYE) cap payments at 10% of discretionary income but extend repayment to 20–25 years, leading to more total interest (though the balance may be forgiven).