After graduation, interest will be figured on this higher principal. Repay quickly The sooner you pay off your loans, the less interest you'll pay. There's no penalty for paying a direct loan early. Use one of the following techniques to see what your monthly payments are likely to be. Limit your borrowing so you'll spend 15 percent or less of your future take-home income on student and consumer debt payments.
Some Web sites have calculators to test different amounts and payment plans.
When you use these calculators, make sure you run the figures using the principal you'll have when you graduate. This means that if you're planning to capitalize interest on an unsubsidized loan, you have to figure out the interest charged while you're in school, add it to the principal, and use that total in the calculator. If you have financial management software, it probably has a loan planning function. It might not be able to handle all the repayment options for direct loans, but it should be able to manage the standard repayment plan. Multiply the total you'll owe at graduation by the number shown.