Should I pay off my student loans?
A student-loan payoff calculator that compares aggressive payoff, minimum payments plus investing, and the new Repayment Assistance Plan (RAP) with forgiveness — all on the same monthly budget.
Three paths, one budget, one scorecard
Every path below spends the same monthly budget: your minimum payment plus the extra you could pay. Whatever doesn't go to the loan that month gets invested. At the end of the horizon each path is scored the same way: what you've invested minus what you still owe on the loan.
Path A — Aggressive payoff
Throw the whole budget at the loan until it's gone, then invest the whole budget. Lowest total interest. Opportunity cost = the compound returns you missed while the money was going to the loan.
Path B — Minimum + invest the difference
Pay the minimum (by default the 10-year standard payment), invest the extra every month, and invest the full budget once the loan is gone. If your expected return beats your loan rate, this can win, but the margin is usually small and you take on market volatility.
Path C — RAP + forgiveness
Federal-only. The Repayment Assistance Plan (from the 2025 budget law, for loans made from July 1, 2026) charges 1–10% of your total AGI depending on your income bracket, minus $50/month per dependent, never less than $10/month. Interest your payment doesn't cover is waived, and if your payment knocks less than $50 off principal, the government makes up the difference (up to the amount you paid). After 30 years of payments the rest is forgiven — and that forgiven amount is taxable now that the temporary exclusion expired at the end of 2025. With PSLF (10 years of qualifying public-service work), the rest is forgiven after 120 payments, tax-free. Borrowers with older loans may still be able to use IBR; this calculator doesn't model it.
If forgiveness lands after your horizon, the "still owe" figure for RAP is what staying on RAP is worth at your loan's own rate — the remaining payments plus the tax bill on forgiveness — or the balance, whichever is lower. The card shows the future tax bill and its present value separately.
The invest-the-difference logic here builds on the same framework as the debt vs invest calculator — start there if you have multiple debt types. Considering grad school and taking on more loans? The grad school ROI calculator factors in tuition debt as part of the cost.
Common questions
Should I pay off student loans or invest in my 401k?
If your employer offers a 401k match, always capture the match first — it's a guaranteed 50-100% return. After the match, compare your loan rate to your expected after-tax market return. This calculator runs that comparison across three strategies, each spending the same monthly budget.
What happened to SAVE? What is RAP?
SAVE was blocked in court and closed to new enrollment. The 2025 budget law (OBBBA) created the Repayment Assistance Plan (RAP) for federal loans taken out from July 1, 2026: you pay 1-10% of your total AGI depending on income, minus $50/month per dependent, with a $10 minimum. Unpaid interest is waived, the government chips in principal if your payment barely dents it, and whatever is left is forgiven after 30 years. Borrowers with older loans may still use IBR. Check studentaid.gov for the plans open to your loans.
Is forgiveness worth it?
Public Service Loan Forgiveness (PSLF) forgives the rest tax-free after 10 years (120 qualifying payments) of public-service work — usually a strong play. RAP's 30-year forgiveness is taxable as income (the temporary tax exclusion expired at the end of 2025), so it mostly helps when your balance is large compared to your income.
Should I refinance federal student loans?
Refinancing to a private loan can lower your rate, but you permanently lose access to RAP/IBR, PSLF, and federal forbearance. Only refinance if you're certain you won't need those safety nets.