Cost Calculator AI
Education & SchoolFederal vs Private

Education Loan Calculator

Compare Federal Direct loans against private education loans, analyzing origination fees, fixed vs. variable APRs, and net funds disbursed to your school.

Calculation Results

Net Disbursed Education Loan Formula

Net Disbursed Funds = Requested Principal × (1 − Origination Fee %) | Effective APR = APR + (Fee / Term)
  • Federal Direct loans deduct an upfront statutory origination fee (~1.057% for undergraduate, ~4.228% for PLUS loans).
  • Private education loans rarely charge origination fees but lack federal income-driven forgiveness protections.
  • Calculates exact cash delivered to your college bursar vs. total principal owed.
  • Computes all-in effective APR including upfront fee deductions.

Step-by-Step Worked Example

Scenario: Undergraduate comparing a $20,000 Federal Direct loan (5.5% APR, 1.057% fee) vs. private lender loan.

Calculation Steps:

  1. Calculate Origination Fee: $20,000 × 1.057% = $211.40.
  2. Net Funds Disbursed to School: $20,000 − $211.40 = $19,788.60.
  3. Monthly Repayment on $20,000 Principal: $217.02 per month.
  4. Total Repayment: $217.02 × 120 = $26,042 ($6,042 total interest).
  5. Effective APR Accounting for Fee: ~5.6% APR.
Result: For a $20,000 loan, $211.40 is deducted as an origination fee ($19,788.60 disbursed to your school), with monthly payments of $217.02 and $6,042 total interest.

How to Use This Calculator

  1. 1Enter total education borrowing amount needed.
  2. 2Specify interest rate and loan origination fee percentage.
  3. 3Check net disbursed funds to verify you borrow enough to cover school bursar invoices.

Assumptions & Limitations

  • Origination fees are deducted upfront before funds reach the university.
  • Federal student loans include income-driven repayment and disability discharge rights.

Frequently Asked Questions

What are Parent PLUS loan origination fees?

Federal Parent PLUS and Grad PLUS loans charge a higher statutory origination fee (currently 4.228%), meaning over $420 is deducted for every $10,000 borrowed.

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