How to Calculate Your Minimum Student Loan Payment

To calculate your minimum student loan payment, start with the repayment plan you’re on: the standard, graduated, and extended plans run your balance, rate, and term through an amortization formula, while income-driven plans skip your balance entirely and take a percentage of the gap between your income and a poverty-level threshold. Once you know which formula applies, the arithmetic takes a few minutes. Below is what to gather, the exact formulas, and worked examples for the two main paths.

Gather Four Numbers Before You Start

For any federal loan, you need your current principal balance, your annual interest rate, the number of months left in your term, and the name of your repayment plan. All four appear on the “My Loans” page when you log into StudentAid.gov, which shows principal, interest, loan status, and repayment progress.¹ Private borrowers pull the same details from the servicer’s portal or the latest billing statement.

If you’re on or considering an income-driven plan, add two more inputs: the Adjusted Gross Income from your most recent federal tax return, and your household size. You’ll also use the 2026 Federal Poverty Level for that household size, which is $15,960 per year for a single person in the 48 contiguous states and $33,000 for a family of four.²

One thing to check before running any calculation: whether your balance has grown since your last payment. Unpaid interest can be added to principal after a grace period ends, after deferment or forbearance, or when you switch plans. Once that interest capitalizes, the higher balance is the one the formula uses. Direct Subsidized Loans don’t accrue interest during in-school periods, grace periods, or deferment, so that step doesn’t apply to them.

The Standard Plan Formula

The Department of Education assigns the standard plan by default. It runs ten years, or 120 fixed monthly payments, and there’s a floor of $50 per month: if the formula gives you a smaller number, your servicer rounds it up.³

The equation is standard loan amortization:

M = P × [r(1 + r)^n] / [(1 + r)^n − 1]

M is your fixed monthly payment.
P is your current principal balance.
r is your monthly interest rate, meaning the annual rate divided by 12.
n is the total number of monthly payments (120 for the ten-year plan).

Here’s how it works with real numbers. Say you owe $30,000 on a Direct Unsubsidized undergraduate loan disbursed in the 2025–2026 academic year at the current fixed rate of 6.39%.⁴ Convert the annual rate to a monthly decimal: 0.0639 ÷ 12 = 0.005325. Compute (1 + 0.005325)^120, which comes out to roughly 1.892. Plug the pieces in: $30,000 × (0.005325 × 1.892) ÷ (1.892 − 1) ≈ $339 per month. Over ten years, that’s about $40,680 total, so roughly $10,680 of the payments go to interest.

The dollar amount stays the same every month, but the split between interest and principal shifts. Early payments are mostly interest; late payments are mostly principal. That’s why extra payments in the first few years cut noticeably more total interest than the same extra payments made later.

Graduated and Extended Plans

Two other fixed-payment plans use variations on the same setup.

Graduated Repayment

A graduated plan keeps the ten-year window but starts payments lower and steps them up, usually every two years. The regulation caps the spread: no single payment can be more than three times any other payment during the life of the loan.³ Graduated payments can drop below the $50 floor that applies to the standard plan. You can’t produce an exact graduated payment from a single formula because the servicer sets the step schedule, but the 3× rule gives you the ceiling: if your starting payment is $200, no later payment can exceed $600. Because more principal sits unpaid in the early years, you’ll pay more total interest than on the standard plan for the same balance and rate.

Extended Repayment

If your outstanding Direct Loans total more than $30,000, you can stretch repayment to 25 years.³ Use the same amortization formula, but swap 120 for 300. On the $30,000 example at 6.39%, the monthly payment falls to about $201, and the total repaid climbs to roughly $60,300. Those extra 15 years add nearly $20,000 in interest. You can choose fixed or graduated payments within the extended plan.

Income-Driven Plan Formulas

Income-driven plans ignore your loan balance and calculate the payment from what you earn. The building block is “discretionary income,” which is the gap between your Adjusted Gross Income and a percentage of the Federal Poverty Level for your household size.⁵ Each plan uses a different multiplier and a different percentage of that discretionary amount.

The SAVE plan (formerly REPAYE) was effectively ended by a court settlement in late 2025. The Department of Education stopped accepting new SAVE enrollments and began moving existing borrowers to other plans. Three income-driven options remain active:

IBR for new borrowers (those who first borrowed after July 1, 2014): 10% of discretionary income, where discretionary income is AGI minus 150% of the Federal Poverty Level.⁵
IBR for borrowers before July 1, 2014: 15% of discretionary income, using the same 150% threshold.⁵
PAYE: 10% of discretionary income, also using 150% of the Federal Poverty Level.⁵
ICR: 20% of discretionary income, using 100% of the Federal Poverty Level, or the amount of a fixed 12-year payment adjusted for income, whichever is less.⁵

IBR and PAYE come with a cap: if the formula gives you a number higher than what you’d pay on the standard ten-year plan, your payment is capped at the standard amount instead.

Worked Example: IBR for a New Borrower

Take a single borrower with an AGI of $45,000. The 2026 poverty level for a household of one in the contiguous states is $15,960.² Multiply by 1.5 for the 150% threshold: $23,940. Subtract from AGI: $45,000 − $23,940 = $21,060 in discretionary income. Apply the 10% rate: $21,060 × 0.10 = $2,106 per year, or about $175 per month. If that number would run higher than the standard ten-year payment on the same balance, the standard amount becomes the ceiling.

If the formula produces a monthly payment under $5, the payment is set to $0.⁵ Interest still accrues during $0-payment months, so balances can grow even while the account stays in good standing.

Marriage and Filing Status

If you’re married and file taxes separately, IBR, PAYE, and ICR use only your individual income in the calculation.⁶ Filing jointly usually adds your spouse’s income to the formula, which can raise the payment significantly.

Annual Recertification

The income-driven payment recalculates every 12 months. You either consent to automatic income verification through your tax records or submit documentation yourself.⁵ Miss the deadline and the servicer reverts you to what you’d owe on a standard ten-year plan at your current balance and rate. That can jump the payment by hundreds of dollars.

How Consolidation Changes the Inputs

Combining federal loans into a single Direct Consolidation Loan resets both the rate and the term used in the formula. The new rate is the weighted average of the existing rates, rounded up to the nearest one-eighth of a percent.⁷ To compute it, multiply each balance by its rate, add those products, divide by the total balance, and round up.

For instance, a $20,000 loan at 5.50% and a $15,000 loan at 6.39% give: ($20,000 × 0.055 + $15,000 × 0.0639) ÷ $35,000 = 0.05881, or 5.881%. Rounded up to the nearest eighth of a percent, the consolidation rate is 5.875%. That rounding-up rule means consolidation cannot lower your effective rate.

Consolidation also lengthens the standard term based on the combined balance, on a tiered schedule that runs up to 25 years for balances between $40,000 and $60,000 and up to 30 years for higher amounts.³ A longer term lowers the monthly payment and raises total interest. Once you have the new rate and new term, feed them into the same amortization formula.

Private Loans Follow the Lender’s Terms

The federal formulas above don’t govern private student loans. Each lender sets its own rate structure and timeline. A fixed-rate private loan behaves like the federal standard plan: one rate, one amortization equation, a steady monthly payment. A variable-rate private loan adds a margin to a benchmark index, and your payment recalculates when the benchmark moves. Since mid-2023, most private lenders have used the Secured Overnight Financing Rate (SOFR) as that benchmark after LIBOR was discontinued. Adjustments can happen as often as monthly or quarterly depending on the loan agreement.

Private loans generally don’t offer income-driven options, forgiveness pathways, or the $0-payment floor found on federal plans. A “minimum payment” advertised by a private lender may cover only interest, or less, meaning the balance grows. Read the loan agreement for prepayment penalties and for the late-fee formula, which typically runs around 5% of the past-due amount or a flat fee, whichever is greater.

Check Your Number Against the Federal Loan Simulator

Once you’ve run the formula, verify the result against the Department of Education’s Loan Simulator at StudentAid.gov. Logged in, the tool pulls your actual loan data and shows estimated monthly payments across every plan you qualify for, along with total interest costs over time.⁸ It also flags which plans lead to forgiveness and lets you weigh a lower monthly payment against a higher lifetime cost. The tool makes assumptions about future income and interest behavior, so treat its output as a realistic estimate rather than a guaranteed figure.⁹

1
Federal Student Aid. What Information Is Available in My Loans in My StudentAid.gov Account
2
U.S. Department of Health and Human Services. 2026 Poverty Guidelines
3
eCFR. 34 CFR 685.208 – Fixed Payment Repayment Plans
4
Federal Student Aid Partners. Interest Rates for Direct Loans First Disbursed Between July 1, 2025 and June 30, 2026
5
eCFR. 34 CFR 685.209 – Income-Driven Repayment Plans
6
Federal Student Aid. 4 Things to Know About Marriage and Student Loan Debt
7
Federal Student Aid. 5 Things to Know Before Consolidating Federal Student Loans
8
Federal Student Aid. Loan Simulator
9
Federal Student Aid. Compare Student Loan Repayment Plans With Our Student Loan Calculator