“It’s A Beautiful Thing”- the New Loan Repayment Estimator

Yes I was a skeptic when I heard several months ago that the Department Of Education’s Office of Federal Student Aid was coming out with a new federal student loan repayment calculator to assist borrowers in estimating their repayment. Previous iterations of their calculators had been cumbersome (you had to individually enter all your loans by type and then by interest rate), manual (you had to subtotal all your estimated loan payments by each of the various federal repayment plans) and duplicative (separate calculators for Income Based repayment and Pay as You Earn projections).

But my immediate reaction to the new calculator (now called the “Repayment Estimator”) was simply that it was truly a “beautiful thing” (seriously I think I started to tear up a little also) . Because this time Federal Student Aid go it right. The Repayment Estimator is a huge tool in helping not just to educate borrowers on loan repayment but also in assisting them with making the right choices for them. And here is why it is indeed “so beautiful” :

1) It’s personalized… you log into the Estimator using your personal information and most importantly your FSA (or FAFSA) pin and when you do your loan balances automatically are pulled from the National Student Loan Database system right into the calculator. And it pulls the balances with the in school interest that has accrued to date so you are really getting the most accurate representation of your loan portfolio. No more manually entering each of your loans – POOF .. they are there like magic.

2) It literally tells you everything you ever wanted (or maybe didn’t want) to know about your loans– want your total debt, your weighted average interest rate, who your servicer is, what repayment plans each loan is eligible for… its all there for you!

3) It allows you to consider all your repayment option at once– Standard 10 year, Extended 25 year, Graduated Repayment, Income Based Repayment and Pay As You Earn are all projected automatically and visible simultaneously so that you can easily compare the cost of each option against one another. The Estimator even projects little “extras” like the payment increases (“step ups) that will happen as part of the Graduate Repayment Option and the loan balance that would be forgiven after 20 years of payment under Pay As You Earn or 25 years under Income Based Repayment.

4) There is a lovely parting gift… at the end of the Estimator you have the option to email the calculators results to yourself. This summary will include a detailed spreadsheet of the repayment plan results you saw on the calculator but also has some great comparative graphs documenting projected total amount paid and total interest paid over each plan.

Bottom line… the Repayment Estimator takes the ever complex world of federal student loan repayment and actually makes it (dare I say it?) understandable and clear. It’s a powerful resource for anyone in the quest to become a savvy and empowered loan borrower. Check out the new Student Loan Repayment Estimator today.

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