Meet the Federal Student Aid Loan Simulator

Are you preparing to graduate in a few months? Student loan borrowers should start thinking about their repayment options now, before their grace period concludes six months after their graduation date. Planning ahead can help you feel more confident and in control of your financial future. Federal Student Aid offers a loan simulator tool to help borrowers estimate their monthly loan repayment. An interesting quirk of this tool is its ability to review loan consolidation options before a student decides to proceed.

In a yellow hazard warning box on the tool’s main webpage, it is careful to stipulate that the repayment plan options available in the tool represent what is available to borrowers at the time of their website visit. Repayment options remain limited for students at this time due to ongoing litigation over the prior administration’s introduction of repayment plan options and a shift in repayment options under the One Big Beautiful Bill Act, which President Trump signed into law on July 4, 2025.

The loan simulator provides loan borrowers with three options: finding the best loan repayment strategy given the student’s situation, exploring loan payment options during financial hardship, and simulating future borrowing due to a return to school. It can also help students plan for future financial changes, such as income fluctuations or career shifts, by allowing them to see how different repayment strategies might work over time and prepare accordingly.

Students who are researching their best repayment option may prefer the first option. Its design helps students understand their best repayment options given their anticipated or current income levels. You can even review your repayment options to simulate methods to repay your loan obligations sooner. Finally, it’s a valuable tool for students considering loan consolidation but wary of making any commitments.

Financial hardship can happen to anyone. Fortunately, the federal government provides a student loan payment simulator for students who are struggling with their existing loan payments. Option two allows students to consider revised payment plans that make repayment more manageable, given their current predicament. It also educates students on understanding the impact of suspending loan payments. This option even offers sound guidance on best practices to help prevent loan default. Students who fit this category should seriously consider using the loan simulator tool.

What would happen if you used a federal student loan to finance your graduate studies? While borrowing more is a sensible decision if you need additional schooling, it can also have detrimental impacts on your future loan payments if you are not careful. Option three provides students with an opportunity to explore the effects of the additional loans borrowed to finance their studies at their existing indebtedness level. This option also provides students with working knowledge of the aggregate loan limits in the federal student aid programs. Finally, it simulates anticipated costs at different schools to give you a better idea of your financing costs.

As always, the accuracy of the loan simulator is entirely dependent on the user’s input. As the old saying goes, garbage in, garbage out. Therefore, students using the loan simulator should use conservative or realistic estimates whenever possible to avoid flawed results.  Further, the federal government notes that all results from the loan simulator are for informational purposes only. Students should speak with a financial aid counselor if they need clarification or assistance understanding the simulator’s results, especially if they have specific questions or complex financial situations.

Loan repayment should not be as scary as many make it out to be. Understanding your repayment options now, before you graduate, is the best way to avoid an unpleasant surprise after your grace period ends.