This calculator helps you understand how your student loans may affect your future financial health after graduation. It shows you how much of your future paycheck you will need to use to pay off your student loans and how long it will take to repay. The default result represents a recent graduate with an average starting salary and student loan balance. To get personalized results, just add your loan and expected salary details.
Your salary after you graduate is an important factor in how well you will be able to cover your loan payments. We've set the expected salary to $38,000 -- the median early career annual salary for graduates with bachelor's degrees nationwide. You can change it to the salary you expect (or hope) to earn, or tell us your major and we'll estimate a starting salary for you. The green bar graphic to the left also shows your net salary, the amount left over after taxes are deducted.
Your monthly student loan payment is calculated using the standard 10-year repayment plan and the current interest rate for federal loans for undergraduates. We've set the loan balance to $22,743, the average federal loan balance for new graduates nationwide. You can change the loan balance, term and interest rate to match your loan details, or tell us the college you plan to attend and we'll estimate your loan balance.
After you graduate, how much of your salary do you want to spend on student loan payments? Some advisors suggest that student loan payments not exceed 10-15 percent of a new graduate's starting salary -- otherwise it could lead to difficulty making loan payments and covering other expenses. The federal government's various income-based student loan repayment plans set the payment at somewhere between 10 and 20 percent of discretionary income. We've set the target to 12 percent, but you can raise or lower it and see how that changes the salary you'll need to meet your target.
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The salary by major data includes median salaries for early career graduates, aged 22-27, with a bachelor's degree only. Your actual starting salary could be higher or lower than the median, depending upon your individual circumstances.
We've set the loan balance to $22,743, the national average federal loan balance for new graduates. To use the average for new graduates at the college you plan to attend, select "Use the Average at a Specific College" and enter the name of the college below. Your actual loan balance may vary from the average, depending upon your individual circumstances. Select "Use the Most Undergraduates Can Borrow" to set your expected federal loan balance to $31,000. (Under certain circumstances -- if the student is not considered a dependent or the student's parents are unable to borrow PLUS loans -- an undergraduate can borrow up to $57,500, but the maximum is $31,000 for most undergraduates.) If you know how much you expect to borrow, choose "Use Your Own Loan Balance" and enter the amount below.
Enter your expected federal loan balance.
This is the length of time during which you will be expected to make monthly payments to repay your student loan in full. Of course, if you pay more than the minimum payment each month, you can repay your loan sooner. We've set the loan term to 10 years -- 120 equal monthly payments -- the typical term for repaying federal student loans under the standard and graduated repayment plans.
When you repay your loan, you will pay back the original amount you borrowed plus interest -- the cost of borrowing the money. Interest is calculated as a percentage of the outstanding (unpaid) loan balance. We've set the annual interest rate to 3.76%, which is the rate for new federal student loans borrowed by undergraduates during the 2016-17 academic year. Interest rates for new federal loans for the following academic year are set each year on July 1.
Private education loans, also known as alternative education loans, are loans for college offered by private lenders, such as banks and credit unions. If you are like most undergraduates, you won't use private loans. Only about 30 percent of new graduates have private loans. Financial aid advisors typically recommend that students who need to borrow should take out federal student loans first because they are generally less expensive than private loans and offer a variety of benefits -- such as flexible repayment and loan forgiveness, which are not usually available through private loan programs.
Enter your expected private education loan balance.
This is the length of time during which you will be expected to make monthly payments to repay your student loan in full. Repayment terms for private education loans vary depending upon the loan balance and other factors, but typically range from five to 15 years.
When you repay your loan, you will pay back the original amount you borrowed plus interest -- the cost of borrowing the money. Interest is calculated as a percentage of the outstanding (unpaid) loan balance. Interest rates for private education loans vary greatly, but in general they are higher than for federal loans. Typical annual interest rates for private loans for undergraduates range from approximately 2.5% to 12%, depending upon the lender, term length, type of interest rate (variable or fixed), the borrower's credit history, and other factors.
If you have comments or questions about the Student Loan Calculator or need assistance, please e-mail us at firstname.lastname@example.org