For many students and their families, getting a higher education means getting federal student loans. To help you decide how much to borrow and understand what repayment would look like, the U.S. Department of Education’s office of Federal Student Aid provides a loan calculator called Loan Simulator.
Loan Simulator can help current loan borrowers estimate payments and simulate certain scenarios. There are future enhancements in store to help students who are new to loans simulate borrowing money and those with loans simulate borrowing more money for a current or future program of study.
Planning Ahead for Repayment
Let’s say you’ve completed your first year of college and have some loans under your belt. You want to visualize how your potential loan debt relates to repayment after you graduate or leave school. Using Loan Simulator, you can get an idea of your typical loan balance based on national data by school type:
Or based on a specific school:
With this information, you can see what repayment could look like.
To get even more options (for example income-driven repayment options), you can use our built-in College Scorecard salary estimator.
Nearing Repayment or in Repayment
What if you’re finished with school and in the thick of repayment? When you log in, Loan Simulator uses your loan information to recommend repayment strategies that work best for your income and repayment goal.
Loan Simulator uses the options you select and information you enter to recommend a repayment plan that meets your needs. It can also calculate your adjusted gross income (AGI), which is used to calculate monthly payments under some repayment plans. Without an AGI, you might be missing out on some repayment options.
You can skip guided questions and use the sidebar to enter information quickly and experiment with changing your repayment goals and other options.
Note: It’s important to include your AGI to be considered for income-driven repayment plans. These plans are based on a borrower’s income and family size and may result in payments as low as $0. They are also good options for those seeking Public Service Loan Forgiveness (PSLF).
Personalized results also allow you to compare multiple repayment plans to see which best fits your needs. You can select up to three repayment plans:
To compare them side by side:
Loan Simulator also offers “Other Options to Consider” to help you further explore different repayment goals.
You can use the slider bar on the “Want to Pay Off Your Loans Faster?” option to see how an extra amount per month or an extra one-time payment can reduce the total amount paid and bring the payoff date closer.
Considering or Already Tracking for PSLF
Do you work in the public sector? Loan Simulator asks whether you are considering PSLF:
Then uses this information to select the repayment plan that meets your goal and qualifies for PSLF. It also shows the potential loan amount to be forgiven.
Struggling With Payments
When you are struggling to make payments, Loan Simulator can help you by estimating payments under an income-driven repayment plan and suggest which deferment and forbearance options you might choose to temporarily stop payments on your student loans.
Loan Simulator also shows you the impact of deferment or forbearance on your overall loan balance.
Check out this Loan Simulator video!
More to Come
By October 2020, Loan Simulator will have added functionality. It will show borrowers an estimate of how much federal student aid may be available, what happens if they take out more student loans, and how doing so can impact their repayment plans. Stay tuned!