Repayment Example

How much can I expect to pay?

Direct Loan repayment varies by student.  Your monthly payment amount is determined by how much you borrowed, when the funds were disbursed, when your loan enters repayment and the type of repayment plan you choose.

To give you an idea of repayment let’s assume we have an undergraduate borrower with the following loans:

1st year Subsidized Loan of $3,500 with an interest rate of 4.66%
2nd Year Subsidized Loan of $4,500 with an interest rate of 4.29%
3rd Year Unsubsidized Loan of $4,500 with an interest rate of 3.76%
4th year Unsubsidized Loan of $5,000 with an interest rate of 4.45%

For a total of $17,500 with a weighted average interest rate of 4.3%

Assume the student enters repayment immediately following the end their six month grace period, and they have an annual salary of $32,000.  The grid below shows the different repayment options available to the borrower and lists the monthly payment, the length of time it takes to pay off the loan, and the total amount paid for the loan.

Plan Name Monthly
Payment
Total
Amount
Paid
# of Months in
Repayment
Standard $180 $21,542 120
Graduated $101-$302 $22,556 120
Revised Pay as You
Earn (REPAYE)
$116-$244 $22,592 131
Pay as You Earn $116-$180 $22,763 142
Income-Based
Repayment (IBR)
$117-$141 $24,311 189

 

 

 

 

 

 

 



The example above does not take into consideration the interest that accrues on the Unsubsidized loan while the student is in school.

We recommend that you log into the Repayment Estimator at www.studentaid.ed.gov with your FSA credentials to get an estimate using your actual loan data