How to estimate your future student loan payments

Borrowing student loans to help pay for your college education may seem scary. Making this investment in yourself to achieve your goal of getting a college education will pay off. Based on data from the U.S. Bureau of Labor Statistics, higher education leads to higher incomes and lower rates of unemployment.

When taking out student loans it's important to think ahead to how you will pay the loans back. Loan repayment will be expected to start six months after graduation, so be thoughtful about how much you borrow.

Borrow only what you need

It can be tempting to take out the max possible on  your student loan for a sense of security, but it's important to take a look at your needs and how you can offset your expenses while you're in school to keep your loan debt as reasonable as possible. You might need to make some lifestyle changes to take advantage of amenities and entertainment available on campus to lower your out of pocket costs. 

A part-time job can help reduce the amount you need to borrow

And add good background experience and proof of your ability to be dependable and responsible to your resume. You can make a significant impact on financing your college education through earnings from work on or off-campus.

  • Holding a campus job can provide valuable experience in a field of interest and establish an additional support network or provide a mentor on campus.
  • Working can help grow problem solving skills, improve time management abilities and accountability.
  • A wide variety of positions exist on campus (federal work-study positions and institutional positions which do not require a work-study award).
  • Some students also hold jobs off-campus in Mt. Vernon, Cedar Rapids or Iowa City.

Interest rates vary year to year

And by loan type. The interest rate for Federal Student Loans is set each year in May and applies to loans made from July of the current year to June of the next year. The loan rate is then fixed until the loan is paid in full. You could have a new loan rate for each year you take out a Federal Student Loan.

Private student loan rates are set by the issuer and vary from lender to lender, they tend to follow the same trends of increase and decrease as federal loans. More information on how student loan rates work.

What will your monthly loan payment be?

You can use this calculator to identify different scenarios of what to expect your monthly loan payments to be after graduation. The average Federal Student Loan interest rate for the last 5 years was 4.11%.

*Actual payments may vary based on the interest rate and type of loan. The amount of your payments will be provided to you by your lender on a repayment schedule or a Truth in Lending disclosure, as applicable.