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Our goal here at Credible is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, no one dictates what we write on our blog. All guidance given is unbiased and all opinions are our own.

Some student loan calculators are better than others, and it’s important to understand their strengths and weaknesses. The Department of Education’s repayment estimator, for example, is a sophisticated federal student loan calculator that can give you an idea of the total amount you would repay in any of the government’s student loan repayment programs. But it’s important to understand the repayment estimator’s limitations.

Where the federal student loan calculator is useful

The government offers no less than five income-driven repayment (IDR) programs where monthly payments are tied to your disposable income (a “unified, simple, and better targeted” IDR program could be in the works). In addition to the five IDR plans, there are four government repayment plans that are not income-driven (standard, graduated, extended fixed, and extended graduated).

There is a tenth repayment program for older FFEL loans, the Income-Sensitive Repayment Plan.

The repayment estimator takes into account how different types of loans are handled in each repayment program, and how much of your loan might ultimately be forgiven in an IDR plan.

Limitations of the federal student loan repayment calculator

As good as it is, there are five things that can throw the Department of Education’s repayment estimator for a loop in evaluating IDR plans:

  • Predicting future income (and therefore monthly payment and amount that may be forgiven). The federal repayment estimator assumes your income will grow by 5 percent a year. If it grows by more than that, any projected loan forgiveness could be reduced or eliminated.
  • Predicting tax liability from loan forgiveness. If you qualify for loan forgiveness after making 20 or 25 years of payments in an IDR, the amount forgiven will be taxed at a rate that’s determined by your income tax bracket and the tax rates in place when your outstanding loan debt is forgiven.
  • The federal repayment estimator is most accurate for evaluating the borrower’s first repayment plan. The longer you’ve been in repayment, the less accurate the repayment estimator’s projections will be. offers a suite of student loan calculators that can help you analyze complex scenarios. These calculators will generate amortization tables, which can be useful for analyzing where you’ll be after a few years in a particular plan.
  • The federal repayment estimator does not tell you how much unpaid interest might be added to your loan balance (“interest capitalization”) if you leave an IDR plan voluntarily (to refinance, for instance) or fail to recertify your income (an annual requirement of REPAYE).
  • The federal repayment estimator does not allow you to see how much you might save by refinancing your student loan debt with a private lender. To see the personalized rates you qualify for from multiple lenders, use’s prequalified rate tool. It takes about two minutes and won’t affect your credit score.

Income-driven repayment plans can help borrowers manage tough times by lowering their monthly payment. But since your payments are being spread out over a longer period of time without an interest rate reduction — up to 25 years — your total repayment costs may increase significantly.

If you qualify to refinance at a lower rate, you could not only lower your monthly payment, but reduce the total amount of interest payments you make over the life of your loan.

While refinancing isn’t for everyone — if you refinance government loans, you’ll lose access to IDR programs and the potential to qualify for loan forgiveness — many borrowers decide the savings they can achieve outweigh the value of those federal borrower benefits.

Credible is a multi-lender marketplace that allows borrowers to get personalized rates and compare loans from vetted lenders, without affecting their credit scores.

About the author
Matt Carter
Matt Carter

Matt Carter is a Credible expert on student loans. Analysis pieces he’s contributed to have been featured by CNBC, CNN Money, USA Today, The New York Times, The Wall Street Journal and The Washington Post.

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