Question 1

What is the standard student loan repayment plan?

Accepted Answer

The Standard Repayment Plan sets equal monthly payments over 10 years, minimizing total interest paid. Monthly payment for $30,000 at 6.5% = $340/month. Total paid = $40,820 — $10,820 in interest. Income-Driven Repayment (IDR) plans like SAVE set payments at 5-10% of discretionary income, extending the term to 20-25 years but potentially forgiving remaining balance.

Question 2

Should I pay off student loans or invest?

Accepted Answer

The mathematical breakpoint: if your loan interest rate exceeds your expected investment return, pay off loans first. Federal loans at 6.5-8% vs S&P 500 historical return of 7-10%: invest if your rate is below 7%, pay extra if above 8%. With SAVE plan income-driven forgiveness, investing often beats aggressive payoff — consult a fee-only financial advisor for your specific situation.

Question 3

What student loan forgiveness programs exist?

Accepted Answer

Public Service Loan Forgiveness (PSLF): forgives remaining balance after 10 years of payments while working for qualifying non-profit or government employer. SAVE plan: 20-year forgiveness for undergrad borrowers, 25-year for grad school. Income-Driven plans generally forgive remaining balance after 20-25 years. Tax implications vary by program.

Question 4

How much does an extra $100/month save on student loans?

Accepted Answer

Adding $100/month to a $30,000 loan at 6.5% (standard 10-year): cuts payoff time from 120 to 95 months (2 years faster) and saves ~$1,800 in interest. On a $60,000 loan: saves $3,600 and cuts 2.5 years. The earlier you make extra payments, the greater the compound interest savings. Even $50/month extra makes a meaningful difference.

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