Does interest build during the grace period?

On an unsubsidised loan, yes, and it is capitalised when repayment starts. On a subsidised loan the government covers it. Paying just the interest yourself before capitalisation, where you can, keeps it off the principal.

What payment is affordable?

Above about fifteen percent of gross income becomes difficult to sustain alongside rent and living costs, which is usually the real constraint on choosing a term.

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Student Loan Repayment Calculator

Student loan repayment with the grace period modelled. On an unsubsidised loan interest accrues through the grace period and is capitalised, so the balance you start repaying is larger than the amount you borrowed.

Also called: education loan calculator, student loan payment.

Monthly payment

$352.39

$352.39 a month over 10 years on a balance of $30,992.92 after the 6 month grace period. Total interest is $11,294.07, and the payment is 7.05% of your monthly income. Interest accrued during the grace period and was capitalised, so repayment starts on a larger balance than you borrowed.

Balance when repayment starts

$30,992.92

Interest accrued in grace

$992.92

Total interest

$11,294.07

Total repaid

$42,287.00

Payment as a share of income

7.05%

Months saved by the extra payment

Interest saved by the extra payment

$0.00

On the grace period

Interest accrued during the grace period and was capitalised, so repayment starts on a larger balance than you borrowed.

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

On an unsubsidised federal loan interest accrues while you are in school and through the six month grace period after you leave, and is added to the principal when repayment begins, so the starting balance exceeds what was disbursed. On a subsidised loan the government pays that interest instead, which is the entire difference between the two and is worth more than most borrowers realise. Paying the interest yourself before it capitalises avoids the compounding and is usually the highest-return payment available. The income share is shown because a payment above about fifteen percent of gross income tends to be difficult to sustain, which is the practical constraint on term choice.

interest accruing during the grace period is capitalised, so repayment starts on a larger balance

g: Grace months

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

an unsubsidised loan accruing through the six month grace

Loan balance: $30,000.00
Interest rate: 6.53%
Repayment term: 10
Grace period: 6
Interest accrues during grace: Yes
Extra payment each month: $0.00
Annual income after study: $60,000.00

Monthly payment$352.39

30,000 x (1 + 0.0653/12)^6 = 30,992.92 by hand, and PMT(6.53%/12, 120, -30992.92) = 352.39. The grace period is not free on an unsubsidised loan, which is the point of showing the balance separately.

Open this example

a subsidised loan starts on the borrowed amount

Loan balance: $30,000.00
Interest rate: 6.53%
Repayment term: 10
Grace period: 6
Interest accrues during grace: No
Extra payment each month: $0.00
Annual income after study: $60,000.00

Monthly payment$341.10

boundary: on a subsidised loan the government pays the interest through the grace period, so repayment starts on exactly what was borrowed

Open this example

Method and limits

What it assumes

A single disbursement and a level repayment after the grace period.

What it deliberately does not model

Multiple disbursements accrue interest from their own dates.
Subsidised loans have their interest paid during study and grace, which changes this substantially. Set the accrual switch off to model one.
Interest on education loans may be deductible, which is not netted off here.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Does interest build during the grace period?: On an unsubsidised loan, yes, and it is capitalised when repayment starts. On a subsidised loan the government covers it. Paying just the interest yourself before capitalisation, where you can, keeps it off the principal.
What payment is affordable?: Above about fifteen percent of gross income becomes difficult to sustain alongside rent and living costs, which is usually the real constraint on choosing a term.