PayBackSmarter Assumptions

Average undergraduate student debt amounts by college or university are provided by Peterson's - a Nelnet company. Amounts displayed may not be current and are for informative purposes only. If the college or university data was not reported to Peterson's, then we display the average undergraduate debt by institution level (i.e., 4-year Public, 4-year Private, 2-year Public, etc.) as reported by the National Postsecondary Student Aid Study (NPSAS).

Average graduate student debt amounts by college or university are provided by U.S. News's annual college survey. Amounts displayed may not be current and are for informative purposes only. If the college or university data was not reported by U.S. News, then we display the average graduate debt by program as reported by the National Postsecondary Student Aid Study (NPSAS).

To calculate the total cost and monthly payment of the average debt, we use the typical number of years in a program based on the institution level (i.e., 4-year Public, 4-year Private, 2-year Public, etc.) and the federal Stafford loan limits. Specifically, we assume that up to the maximum subsidized Stafford loan for a dependent undergraduate student was borrowed annually. If there is any remaining amount, we assume up to the maximum unsubsidized Stafford loan for a dependent undergraduate student was borrowed. If there is still any remaining amount, then we assume the remaining amount is borrowed in a private student loan. Once a user enters their own loan amounts, we use those amounts instead.

We assume that the amount a user enters and/or average student debt includes any accrued interest.

We assume the maximum repayment length for a given repayment plan.

We assume the following interest rates:

• Perkins Loan: 5% fixed interest rate
• Subsidized Stafford or Direct Loan: 6.8% fixed interest rate
• Unsubsidized Stafford or Direct Loan: 6.8% fixed interest rate
• Private Loans: 8.56% average interest rate
• GradPLUS Loans: 7.9% fixed interest rate

We assume the following repayment period:

• Perkins Loan: 10-year repayment period
• Subsidized Stafford, Unsubsidized Stafford , and GradPLUS Loans
  • Standard Repayment: 10-year repayment period
  • Graduated Repayment: 10-year repayment period, monthly payments increase every two years, and no single payment more than 3X greater than any other payment
  • Extended Repayment: 25-year repayment period assuming a combined student debt of $30,000 in a combination of Federal Stafford or GradPLUS Loans
  • Income Based Repayment (IBR): Up to 25-year repayment period and monthly payments are calculated 15% of earnings above 150% of the current poverty level
• Private Loans: 15-year repayment period
• Consolidated Loans:
  
  

  Total of Underlying Federal Loans	Repayment Period
  Up to $7,499.99	10 years
  $7,500 - $9,999.99	12 years
  $10,000 - $19,999.99	15 years
  $20,000 - $39,999.99	20 years
  $40,000 - $59,999.99	25 years
  $60,000 and above	30 years

We assume that borrowers will include all federal loans (i.e., Perkins, Subsidized Stafford, Unsubsidized Stafford, and GradPLUS Loans) in a traditional consolidation loan.

Information on federal financial aid programs was based on publications from the U.S. Department of Education. Please note that federal legislation may alter the loan rates and eligibility requirements in the future.

Many student loans have minimum monthly payment amounts, such as $50, which are not calculated.

We assume any prepayment for accelerated repayment will pay the principal balance of the loan.