Student Loan Payoff

Loans & Borrowing
Updated Apr 2026 • Has calculator

Monthly payment needed to fully repay a student loan over a given term, plus total interest cost.

What is Student Loan Payoff?

Student loan repayment uses standard amortization: each fixed monthly payment covers accrued interest plus a growing portion of principal, ensuring the balance reaches zero at the end of the term. Federal Direct Unsubsidized Loans carry fixed rates set each July by Congress (6.53% for undergraduates in 2024–25). The standard repayment plan is 10 years for federal loans, but longer terms reduce monthly payments while increasing total interest paid.

Formula

M = P · r · (1+r)^n / ((1+r)^n − 1)

Worked Example

Worked example — Federal Direct Unsubsidized Loan — 2024–25

2024

Step 1  Average federal student loan balance at graduation: $37,574 (ED 2024)
Step 2  Rate: 6.53% (undergraduate Direct Unsubsidized 2024–25)
Step 3  Standard 10-year repayment plan
Step 4  Monthly payment = $37,574 × (6.53%/12) amortized over 120 months ≈ $423/mo
Step 5  Total paid: $50,760 | Total interest: $13,186
Step 6  → At 25 years: payment drops to $255/mo, but total interest doubles

Source: US Department of Education — Direct Loan Interest Rates 2024–25 (2024-07-01)

Calculate Student Loan Payoff

Total outstanding student loan balance

Federal undergraduate rate 2024–25: 6.53%; graduate: 8.08%

Standard federal plan: 10 years; extended: up to 25 years

Monthly Payment

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Not investment advice.

How to Interpret Student Loan Payoff

< 200
Low payment — small balance or long term
200 – 500
Typical — standard 10-year federal repayment range
500 – 1000
Elevated — graduate or professional school debt
> 1000
High — consider income-driven repayment options
Sources
  1. US Department of Education — Interest Rates 2024–25
  2. Investopedia — Student Loan Repayment