Student Loan Calculator
Calculate your student loan monthly payment, total interest, and payoff timeline using current 2026-27 federal rates. Includes extra payment impact analysis and accounts for the major OBBBA 2025 changes affecting loans disbursed after July 1, 2026.
Last updated: October 2026 · Source: Federal Student Aid, rates effective July 1, 2026 - June 30, 2027
Applied to principal to pay off faster
2026-2027 federal student loan rates
Federal student loan interest rates are set annually by Congress using a formula tied to the 10-year Treasury note yield from the May auction, plus a statutory add-on that varies by loan type. Rates are fixed for the life of the loan — they never change after disbursement. The rates below apply to loans first disbursed between July 1, 2026 and June 30, 2027.
| Loan type | Rate | Origination fee | Who qualifies |
|---|---|---|---|
| Direct Subsidized | 6.52% | 1.057% | Undergrad with financial need |
| Direct Unsubsidized (Undergrad) | 6.52% | 1.057% | Any undergraduate |
| Direct Unsubsidized (Grad) | 8.07% | 1.057% | Graduate/professional students |
| Direct PLUS (Grad) | 9.07% | 4.228% | Grad students (eliminated after July 2026) |
| Direct PLUS (Parent) | 9.07% | 4.228% | Parents of dependent undergrads |
Source: US Department of Education, Federal Student Aid. Rates announced June 4, 2026. These rates apply to loans first disbursed between July 1, 2026 and June 30, 2027.
Major changes effective July 1, 2026
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, makes significant changes to federal student loans effective July 1, 2026:
- • Grad PLUS loans eliminated for new borrowers (three-year phase-out for students already enrolled)
- • Parent PLUS capped at $20,000/year and $65,000 lifetime
- • Graduate borrowing capped at $20,500/year, $100,000 lifetime
- • Professional student borrowing capped at $50,000/year, $200,000 lifetime
- • SAVE plan terminated (already vacated by federal court March 10, 2026)
- • New Repayment Assistance Plan (RAP) launches as primary income-driven option
- • Parent PLUS loses PSLF eligibility for loans disbursed on/after July 1, 2026
Frequently asked questions
What are the 2026-2027 federal student loan rates?
For loans first disbursed between July 1, 2026 and June 30, 2027, the rates are: Direct Subsidized and Unsubsidized Loans for undergraduates at 6.52%, Direct Unsubsidized Loans for graduate/professional students at 8.07%, and Direct PLUS Loans (parent and grad PLUS) at 9.07%. These rates increased slightly from 2025-2026 when they were 6.39%, 7.94%, and 8.94% respectively. Rates are set each year based on the May 10-year Treasury auction yield plus a statutory add-on. They are fixed for the life of the loan.
What is the difference between subsidized and unsubsidized loans?
With Direct Subsidized Loans, the federal government pays the interest while you are enrolled at least half-time, during the six-month grace period after graduation, and during deferment. They are only available to undergraduate students with demonstrated financial need, and have a lifetime limit of $23,000. Unsubsidized loans charge interest starting the moment the loan is disbursed, regardless of enrollment status. Unsubsidized loans are available to any student (undergrad or grad) without financial need requirements, and have higher borrowing limits.
What are the annual borrowing limits for federal student loans?
Dependent undergraduates can borrow $5,500 as freshmen (up to $3,500 subsidized), $6,500 as sophomores ($4,500 sub), and $7,500 as juniors/seniors ($5,500 sub), with a $31,000 lifetime cap. Independent undergrads can borrow $9,500-$12,500/year up to $57,500 lifetime. Before July 1, 2026, graduate students could borrow $20,500/year up to $138,500 lifetime (includes undergrad); for new borrowers the cap is now $20,500/year and $100,000 aggregate (professional: $50,000/year and $200,000). Before July 1, 2026, Parent PLUS loans had no fixed limit (up to the cost of attendance minus other aid); they are now capped at $20,000/year and $65,000 per dependent student. These limits changed for new borrowers on July 1, 2026 under the OBBBA.
What changed for federal student loans on July 1, 2026?
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, makes significant changes effective July 1, 2026. Grad PLUS loans are eliminated for new borrowers (with a three-year phase-out for students already enrolled). Parent PLUS is capped at $20,000/year and $65,000 lifetime. Graduate borrowing caps at $20,500/year, $100,000 lifetime. Professional students capped at $50,000/year, $200,000 lifetime. SAVE repayment plan was terminated. The new Repayment Assistance Plan (RAP) launches July 1, 2026 as the primary income-driven option for new borrowers.
How do I calculate my student loan payment?
Use the standard loan amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments. Example: $30,000 at 6.52% over 10 years (120 months). Monthly rate = 0.06520/12 = 0.005433. Monthly payment = $30,000 × [0.005433 × (1.005433)^120] / [(1.005433)^120 - 1] = about $341. This calculator does the math automatically including the effect of extra payments.
How much can I save by making extra payments?
Significant amounts, especially on longer loans. Example: $30,000 at 6.52% over 10 years with the standard $341 monthly payment costs $10,914 in total interest. Adding just $100/month extra drops the total interest to about $7,555 and pays off the loan about 2 years and 10 months early, saving about $3,359 in interest and 34 months of payments. Extra payments go directly to principal, which reduces the balance interest is calculated on, creating compounding savings over time. Contact your servicer and specify that extra payments should apply to principal.
Should I refinance my federal student loans?
It depends. Refinancing federal loans with a private lender can lower your rate if you have strong credit, but you permanently lose access to federal benefits: income-driven repayment plans (IBR, PAYE, RAP), Public Service Loan Forgiveness, deferment and forbearance options, death/disability discharge, and potential federal loan forgiveness. Only refinance if: (1) your credit and income are strong, (2) you are certain you will not need any federal benefits, (3) the rate improvement is meaningful (typically 1%+ lower), and (4) your career path does not lead to forgiveness-eligible employment.
What is Public Service Loan Forgiveness (PSLF)?
PSLF forgives the remaining balance on Direct Loans after you make 120 qualifying monthly payments (10 years) while working full-time for a qualifying government or 501(c)(3) nonprofit employer. Qualifying payments must be made on an income-driven repayment plan (or the 10-year Standard plan). After the OBBBA, Parent PLUS loans disbursed on/after July 1, 2026 are NO LONGER eligible for PSLF. Existing Parent PLUS borrowers can still pursue PSLF if they consolidate before July 1, 2026 and enroll in an IDR plan before July 1, 2028. PSLF forgiveness remains tax-free.
What is the difference between federal and private student loans?
Federal loans are issued by the US Department of Education and have fixed rates set by Congress, flexible repayment options (income-driven plans, deferment, forbearance), potential forgiveness programs (PSLF, IDR forgiveness, teacher forgiveness), and do not require a credit check for most loans (except PLUS). Private loans come from banks, credit unions, or online lenders. They require credit approval, often have variable rates, and lack federal protections. Private loan rates currently range from about 3% to 18% depending on creditworthiness. Always exhaust federal loan eligibility before turning to private loans.
Can I deduct student loan interest on my taxes?
Yes, up to $2,500 per year in student loan interest is deductible as an above-the-line adjustment on your federal tax return. This means you can claim it even if you take the standard deduction. The deduction phases out for 2026 at modified adjusted gross incomes between $85,000 and $100,000 for single filers, or between $175,000 and $205,000 for married filing jointly. Married filing separately cannot claim the deduction at all. Your loan servicer will send you Form 1098-E showing the interest you paid if it is $600 or more for the year.
Is student loan forgiveness taxable?
Yes, as of 2026. The American Rescue Plan Act made student loan forgiveness federally tax-free from 2021 through December 31, 2025, but that exemption has expired. Forgiveness received in 2026 or later from income-driven repayment plans, total and permanent disability discharge, closed school discharge, and most other programs is taxable as ordinary income. The one exception is Public Service Loan Forgiveness, which remains permanently tax-free. State tax treatment varies. If you receive IDR forgiveness in 2026+, prepare for a potential "tax bomb" at year-end.
What happens if I cannot make my student loan payments?
Federal loans offer several options before default: contact your servicer immediately to switch to an income-driven repayment plan (payments as low as $0/month under IBR if income is at or below 150% of the federal poverty line), request deferment (which pauses payments, often without interest for subsidized loans), or request forbearance (pauses payments but interest accrues). After 270 days of missed payments, federal loans enter default — wage garnishment, tax refund offset, and credit damage can follow. Never stop communicating with your servicer; always more options exist before default.
Data sources: Federal Student Aid rate announcement June 4, 2026 (GENERAL announcement on 2026-27 Direct Loan rates); One Big Beautiful Bill Act of 2025 (signed July 4, 2025).
Last updated: October 2026. Federal student loan rates for new disbursements are updated each July 1. The rates shown apply to loans first disbursed between July 1, 2026 and June 30, 2027.
Disclaimer: This calculator provides estimates for educational purposes only and is not financial advice. Actual loan terms depend on your specific situation. Consult your loan servicer for personalized information.