Federal vs private: why this calculator covers both
Federal loans are simple: a fixed interest rate, a 10-year standard repayment term, and daily-interest accrual. Private loans are whatever your lender decided they should be — variable or fixed, 5 to 20 years, sometimes with origination fees baked in. From a math perspective, though, both behave like any other installment loan: balance, APR, term, payment. The calculator above treats them the same way.
The "just pay the minimum" question
If you are on track for Public Service Loan Forgiveness (PSLF), an income-driven plan with forgiveness at year 20/25, or you work in a field with state-level repayment assistance — do not prepay your federal loans. Every extra dollar is a dollar you lose to forgiveness. This calculator is for people who are paying off their loans, not waiting them out.
If you are not on a forgiveness track, the math is usually clear: federal unsubsidized loans for grad school run 7–9% APR, which is higher than most mortgages and roughly even with a diversified stock portfolio's historical return. Paying them down is a guaranteed, tax-free return at that rate. For most households, that's a strong risk-adjusted investment.
Why extra $100/month matters so much
On a $34,000 loan at 6.53% over 10 years, the standard payment is ~$386. Adding just $100 extra per month cuts the payoff by roughly two years and saves about $2,500 in interest. Adding $200 extra — a meal-kit subscription and two streaming services — saves over $4,000 and knocks more than three years off the clock.
The effect compounds because student loan interest accrues daily. Every extra dollar applied to principal reduces the daily interest charge for every subsequent day of the loan. Paying $100 extra in month 3 is more valuable than paying $100 extra in month 80, because it reduces interest for all the months in between.
Refinance vs repay
Refinancing a federal loan into a private one permanently gives up income-driven repayment, PSLF, and the deferment/forbearance options that federal borrowers get. That is a massive safety net to walk away from — even if your private rate is 2% lower. The rule of thumb: only refinance federal loans if your income is high, stable, and you would pay the loan off inside 5 years anyway. For private loans with no such safety net, refinancing is a pure rate shopping exercise.
The order question
Where student loans sit in your payoff order
Student loans are usually the lowest-APR debt in your portfolio — lower than credit cards (definitely), lower than auto loans (usually), and sometimes tied with a mortgage. Under the avalanche strategy, this means they often get paid last. That is usually correct — clear the 22% credit card before the 6.5% student loan, not the other way around.
Tax deduction: real but capped
You can deduct up to $2,500 of student loan interest per year on your federal taxes, subject to income limits (~$95K single / $200K married for the full deduction as of recent tax years). That is a useful offset — but it shrinks as your income grows, and it is just a deduction, not a credit. Do not let the tax deduction keep you in debt longer than necessary; the interest itself is more expensive than the deduction is worth.
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For education only. Not financial advice.