How to Calculate Student Loan Payments

Student Loan Repayment Written on Notepad

How to Calculate Student Loan Payments

Published July 23, 2019 | Last Updated May 2nd, 2023 at 10:23 am

Student Loan Repayment Written on Notepad

Student loan payments can sneak up on a student.

After all, who really thought about what life with student loan payments would be like after college when they first borrowed the money?

To help your student avoid that sinking feeling, it’s important to recalculate loans each semester.

Here’s what you need to know to do so:

How Much Will My Student Loan Payments Be Per Month?

1. Start with federal student loans issued directly to students when calculating payments.

Most undergraduate students can borrow up to $31,000 in total for undergraduate studies.

The exception is for independent students or dependent students whose parents don’t qualify for PLUS loans and need to make up for cost of attendance differences.

These undergraduates can borrow up to $57,500 for an undergraduate degree.

On an annual basis, the amount a student can borrow is between $5,500 and $12,500, depending on their year in school and whether parents qualify for PLUS loans.

Families can decide annually and on a semester-by-semester basis how much of the limit they’d like to accept or cancel.

Use the our student loan calculator to calculate payments.

Your minimum monthly payment is based on the type of loan, the amount you owe, the length of your repayment plan and your interest rate. You’ll typically have 10 to 25 years to repay federal loans entirely. Shorter lengths of repayment time or larger loans will result in higher monthly payments.

To get the most accurate results in our calculator, enter your loan amounts separately with their individual interest rates and terms.

You may have a mix of federal and private loans. If you don’t know how much you have in federal student loans, search for your federal loans in the National Student Loan Data System or contact your private student loan lender.

The Standard 10-year Repayment Plan is by far the most popular plan for federal student loans, with 11.37 million borrowers enrolled in 2017, but that doesn’t mean it is the best plan for you. This is the default plan. Borrowers are automatically enrolled in the Standard Repayment Plan unless they choose a different one.

You’ll make fixed monthly payments for 10 years. It’s a great plan if you can afford the monthly payments and the cheapest option long term because you’ll pay a lot less interest. But, if you don’t have the income to support these payments, you should enroll in one of the income-driven repayment plans.

2. Add in any private student loans.

One difference with private loans is that they generally have set repayment terms such as 3 years, 5 years, 10 years, or even 15 years.

If the student is unsure what their repayment terms are on their private student loans, they need to contact the lender to find out payment terms and interest rates.

If you cosigned for your student, then as a backup, make sure you’ve planned enough space in your monthly budget to make payments yourself if they can’t after graduation.

When you cosign a loan, the lender sees the loan as yours as much as the student’s. And the payment history gets reported on your credit report as well as the student’s.

3. Consider Parent PLUS Loans When Calculating Monthly Payments.

While Parent PLUS loans don’t belong to the student, you should calculate your payments on these loans on a semester-by-semester basis.

If you are unprepared to repay them, the student may be able to pick up a part-time job or they can apply for more scholarships.

Another option is for the student to transfer to a school where you don’t have to borrow so much.

The good news is, schools offer new scholarship awards in sophomore, junior, and senior year of college. Students need to check in regularly with their financial aid office and the department for their major. 

A student may qualify for a scholarship from their major that is only available in their 2nd or 3rd year.

They can also go to the financial aid office on campus to ask about additional grant and scholarship money.

Change Your College Budget When Needed

Beyond applying for new scholarships, an excessive amount of student loan debt can be a signal to re-budget.

Textbooks are a highly flexible expense.

A member of our Paying For College Facebook group told us she spent a total of $500 on books for two master’s degrees because she was able to buy and then resell them on Amazon.

In comparison, school bookstores rarely pay a good buy-back price. Plus, your school could have retired that edition of the book while another school hasn’t. Thus, the resale value could be better in a different locale.

Students can get budgeting help for all aspects of their budget from the student money management department or a credit union financial counselor on campus.

They may help them find ways to save on food, entertainment, or housing.

For instance, a change in meal plans can save several hundred dollars per semester.

Quick Tips For Calculating Student Loan Payments Each Semester

Start with federal loans issued directly to students using the Repayment Estimator calculator.

  • Understand student loans can be accepted, rejected, or canceled on a semester-by-semester basis.
  • Gather basic information about your student’s private student loans and then call the servicer or use the Road2College calculator to calculate monthly payments for each loan separately. Then add them up for a total monthly payment your student will be responsible for. If you co-signed for the loan, be ready to repay these loans if your student can’t.
  • Calculate Parent PLUS loan payments each semester.
  • No matter which loans end up being too high, look for ways for the student to painlessly re-budget. Changing meal plans or changing the way they buy or sell textbooks alone could save the student hundreds per year.

Calculating your student and your monthly student loan payments, while your student is in college, will keep you abreast of what your monthly financial commitments will be. 

You will have a good idea of what the future holds in terms of financial obligations, and you will be able to reassess if necessary along the way. 

To help parents and students make informed decisions about student loan costs, we developed the Road2College Student Loan Comparison Spreadsheet. Download it for free here.







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