Sample Repayment at $300,000

Assumptions:

• $300,000 federal student loan debt
  • Maximum of $40,500 direct unsubsidized and remainder Direct PLUS (formerly Grad PLUS) each year, even disbursements
• Applicable interest rates for Class of 2023 graduate, with CARES Act accommodated in rates
• Six-month window period (grace and deferment) prior to entering repayment
• $180,000 starting salary, moderate increase each year
• Single, family size of one used for repayment estimates with Income Driven Repayment (IDR) plan
• No aggressive payments and loans held to term

Repayment:

NA = non-admissible

Notes

• AAMC/ADEA Dental Loan Organizer and Calculator used for all repayment calculations.
• Time-driven plans (Standard and Extended) are not generally considered eligible plans for Public Service Loan Forgiveness (PSLF), hence NA referenced.
• With time-driven plans, the debt is paid in full by the end of the term, thus there is nothing to forgive at the end of the term. Note that with PAYE (Pay As You Earn), in this case, the debt is not retired by year 20, thus the remaining term forgiveness amount of $246,243. This is due to payments not covering the amount of interest due each month.
• PAYE used as the IDR plan example to simply show how the repayment plans based on income work. The other popular IDR is REPAYE (Revised Pay As You Earn).
• Payments with PAYE are based on income and family size and change on an annual basis. Therefore, the payment range shows the initial payment upon entering repayment and the last payment at year 20.
• Under current tax law, the forgiveness amount with PSLF is not considered taxable income, while the forgiveness amount under term forgiveness is considered taxable income the year forgiven.
• PSLF Paid is the amount a borrower would pay over 10 years while making minimum payments with PAYE.
• PSLF Forgiven is the amount still remaining that would be forgiven tax-free under the PSLF program.

April 2023