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C.10 · Debt

Student loan repayment — three plans compared.

Federal student loans support three repayment shapes: standard 10-yr fixed, graduated, and income-driven. We show all three side by side.

Typical length
10 years (standard)
The default for federal Direct loans
Inputs
Loan balanceUndergrad averages ~$30K; med, dental, vet, and grad school can run $200K–$500K.
$30,000
Interest rate
5.50%
Annual income (before taxes)Used to estimate your income-driven plan payment.
$55,000
Standard plan · same payment for 10 years
$326/mo
An income-driven plan (payment based on what you earn) would be $262/mo — but it's spread over ~20 years, so compare total cost too.
How much you still owe, year by year
Standard plan: how the balance is paid down over 10 years
$0$14K$28KYear 0Year 5Year 10
Amount you owe
$30,000
Standard: total paid (10 yrs)
$39,070
Graduated: total paid (10 yrs)
$40,575
Income-driven: total you’d pay (~20 yrs)
$42,720
Paid off within ~20 yrs — nothing forgiven

Income-driven rules are changing. The SAVE plan is being wound down, and a new Repayment Assistance Plan (RAP) and Tiered Standard Plan begin July 1, 2026 (PAYE and ICR close to new borrowers then; IBR stays). This estimate uses the older income-driven formula — roughly 10% of discretionary income, with any balance forgiven after ~20 years — so confirm the plan you'd actually get at StudentAid.gov.

Year-by-year breakdown

Standard plan: year-by-year payoff

Standard 10-year federal repayment is paid down like any fixed-rate loan. Around year 4–5, more of each payment finally goes to your balance than to interest.

Year
Principal
Interest
Balance
Progress
1
$2,315
$1,592
$27,685
8%
2
$2,445
$1,462
$25,240
16%
3
$2,583
$1,324
$22,657
24%
4
$2,729
$1,178
$19,928
34%
5
$2,883
$1,024
$17,045
43%
6
$3,045
$861
$13,999
53%
7
$3,217
$690
$10,782
64%
8
$3,399
$508
$7,383
75%
9
$3,590
$316
$3,793
87%
10
$3,793
$114
$0
100%
How we compute this

Standard, Graduated, IDR — which wins?

Standard is a fixed 10-year amortization (predictable but highest monthly). Graduated is also a 10-year plan, but the payment starts lower and steps up every 2 years — so you pay a little more interest overall. Income-driven (IDR) plans cap your payment at a share of your discretionary income — your income above about 150% of the federal poverty line — and forgive any remaining balance after roughly 20–25 years. Note: these plans are being overhauled — the SAVE plan is winding down and a new Repayment Assistance Plan (RAP) and Tiered Standard Plan arrive July 1, 2026 — so check StudentAid.gov for the plan you would actually enroll in.

standardMonthly = PMT(balance, rate, 10 yr)

PMT is the standard loan-payment formula (the same one spreadsheets use). An income-driven plan (IDR) is the move if your income is low relative to your balance — you'll pay less per month, and any balance left after ~20 years can be forgiven. Standard wins if you can afford it and want to minimize total interest.

Next up

Continue the decision

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Frequently Asked Questions

Federal loans offer Standard (fixed payments over 10 years), Graduated (also 10 years, but payments start lower and increase every 2 years), and Income-Driven (IDR) plans that base your payment on your income. Heads up: IDR is being overhauled -- the SAVE plan is winding down, and a new Repayment Assistance Plan (RAP) and Tiered Standard Plan begin July 1, 2026, while PAYE and ICR close to new borrowers (IBR remains). Private loans typically only offer standard repayment.