MBA Loan Repayment Plan Template

Post-MBA loan workbook: loan inventory, PMT and CUMIPMT schedules, RAP and Tiered Standard (2026), avalanche vs snowball, refinancing break-even

MBA và trường kinh doanhĐầy đủLoan amortisation; US federal RAP and Tiered Standard Plan from 1 July 2026loan repayment plan mathCập nhật 28 thg 10, 2026

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Cách dùng: Use it from six months before your first payment and at each yearly review. Fill the loan inventory from servicer figures first, then compare federal plans and set an extra-payment rule. The main pitfall is refinancing federal loans for a lower rate without pricing the protections you lose.

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MBA Loan Repayment Plan: [Your name]

A workbook for repaying MBA loans after graduation: an inventory of every loan, amortisation schedules built with =PMT, =IPMT and =CUMIPMT, the repayment plans available to new US federal borrowers from 1 July 2026 (dated facts checked in October 2026), payoff strategies (avalanche and snowball) compared on total interest and time, a refinancing break-even test, and affordability ratios against your post-MBA pay. It covers non-US loans in general terms. Source basis: standard loan mathematics, US Federal Student Aid and ETS pages, and the consumer debt literature. Replace every [bracketed] value and every row marked Example. This is a planning aid, not financial, tax or legal advice: confirm every figure with your servicer or lender before you act.

Document control

Field	Value
Document ID	[REPAY-001]
Version	[0.1]
Status	[Draft / In repayment / Paid off]
Owner	[Your name]
Reviewed by	[Partner, mentor or adviser]
Last updated	YYYY-MM-DD
Classification	Personal, confidential
Graduation date	YYYY-MM
First payment due	YYYY-MM-DD
Currency of loans and of income	[USD; USD]

Purpose and principles
The repayment process
Loan inventory
Amortisation: the mathematics and the schedule
US federal repayment plans for new borrowers (dated facts)
Payoff strategies: avalanche and snowball
Refinancing and prepayment
Affordability and risk
Timeline
Quality checklist and common mistakes

1. Purpose and principles

After graduation, MBA debt becomes a fixed monthly cost that competes with rent, savings and the rest of a new career. A written plan answers four questions: what do I owe and on what terms, what is the minimum I must pay, how fast do I want to be debt-free and at what cost, and what happens if my income falls?

Principles:

Know every loan. Balance, rate, fixed or variable, servicer, term, plan, protections. You cannot optimise a list you have not written.
Pay every minimum, always. Missed payments cost fees, credit damage and sometimes the loss of protections. Set up automatic payments for all minimums.
Direct extra money deliberately. Extra payments to the highest-rate loan save the most interest; extra payments to the smallest balance free cash flow sooner. Choose one rule and write it down.
Keep protections unless you are paid to give them up. Income-driven plans, deferment and discharge rules are insurance. Refinancing federal loans into a private loan removes them.
Protect the plan with a buffer. An emergency fund prevents a car repair from turning into a missed payment.

2. The repayment process

The order matters. Plan choice comes before the extra-payment strategy because it sets the minimums, and refinancing comes last because it is only worth testing once you know what you are comparing against.

3. Loan inventory

ID	Lender or servicer	Type	Balance at repayment start	Rate (fixed or variable)	Term or plan	Minimum payment	Protections
LN-001 (Example)	Federal servicer	US Direct Unsubsidized	47,617.40	8.07% fixed	Tiered Standard, 15 years	456.98	RAP, deferment and forbearance, discharge rules
LN-002 (Example)	Private lender P1	Private student loan	79,260.00	9.00% fixed	10 years	1,004.03	Per contract: [hardship options, cosigner release]
[LN-003]	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]	[ ]
Total (Example)			126,877.40			1,461.02

The balances come from the funding plan: USD 41,000 of federal loans plus USD 6,617.40 of interest accrued during the programme, and USD 69,000 of private loans plus USD 10,260.00 of accrued interest (mba/mba-funding-scholarship-plan, section 5.2). Federal rates for 2027-28 disbursements will be set separately; the example assumes 8.07% for both federal years.

4. Amortisation: the mathematics and the schedule

4.1 Formulas

For a balance $P$ , monthly rate $i = r/12$ and $n$ monthly payments, the level payment is

A = P \cdot \frac{i}{1-(1+i)^{-n}}

and in month $k$ the interest and the balance after payment are

I_k = i \cdot B_{k-1}, \qquad B_k = B_{k-1} + I_k - A

Symbol	Meaning	Excel
$P$	Balance when repayment starts
$r$	Annual nominal rate
$i$	Monthly rate $r/12$	`=r/12`
$n$	Number of monthly payments	`=years*12`
$A$	Level monthly payment	`=PMT(r/12,n,-P)`
$I_k$	Interest in month $k$	`=IPMT(r/12,k,n,-P)`
$B_k$	Balance after payment $k$	`=-FV(r/12,k,-A,P)`
	Interest paid in months $a$ to $b$	`=-CUMIPMT(r/12,n,P,a,b,0)`
	Months to repay with payment $A$	`=NPER(r/12,-A,P)`

Assumptions and limits. These formulas assume a fixed rate and interest that accrues monthly on the outstanding balance. Many US federal and private loans accrue simple interest daily, so actual statements differ by small amounts; variable-rate loans need a new schedule each time the rate changes. =PMT returns a negative number when the balance is entered as positive; entering -P gives a positive payment.

4.2 Worked example A: Tomás's minimum schedule (fully solved)

Loan (Example)	Balance	Rate	Term	Monthly payment	Total repaid	Total interest	Excel
LN-001 federal, Tiered Standard	47,617.40	8.07%	15 years	456.98	82,256.94	34,639.54	`=PMT(8.07%/12,180,-47617.40)`
LN-001 federal, if repaid in 10 years	47,617.40	8.07%	10 years	579.49	69,539.19	21,921.79	`=PMT(8.07%/12,120,-47617.40)`
LN-002 private	79,260.00	9.00%	10 years	1,004.03	120,483.86	41,223.86	`=PMT(9%/12,120,-79260)`

First year of LN-001 on the 15-year term:

Month (Example)	Interest	Principal	Balance after payment
1	320.23	136.76	47,480.64
12	309.76	147.22	45,914.25
Months 1 to 12	3,780.64	1,703.15

Excel for the year: interest =-CUMIPMT(8.07%/12,180,47617.40,1,12,0) and principal =-CUMPRINC(8.07%/12,180,47617.40,1,12,0). In the first year, 69% of what Tomás pays on the federal loan is interest. Paying the federal loan over ten years instead of fifteen costs USD 122.51 more a month and saves USD 12,717.76 of interest.

4.3 Worked example B: a third loan (half solved)

A classmate has a USD 30,000 country-scheme loan at 6.5% fixed over 12 years.

Item	Value
Monthly payment `=PMT(6.5%/12,144,-30000)`	[ ]
Interest in month 1 `=30000*6.5%/12`	[ ]
Total interest over the term	[ ]
Months to repay at USD 400 a month `=NPER(6.5%/12,-400,30000)`	[ ]

5. US federal repayment plans for new borrowers (dated facts)

As of October 2026 (checked 2026-10-28), borrowers with loans first disbursed on or after 1 July 2026 choose between two plans:

Tiered Standard Plan. A fixed payment with no income adjustment and no forgiveness. The term depends on the total balance:

Total federal balance	Term
Under USD 25,000	10 years
USD 25,000 to 49,999	15 years
USD 50,000 to 99,999	20 years
USD 100,000 or more	25 years

The minimum payment is USD 50 a month or the full balance if lower. Tomás's federal balance of USD 47,617.40 puts him on a 15-year term.

Repayment Assistance Plan (RAP). The income-driven plan for new borrowers. The yearly base payment is a percentage of adjusted gross income (AGI): USD 120 a year (USD 10 a month) for AGI up to USD 10,000, then 1% for AGI from USD 10,001 to 20,000, rising one percentage point for each further USD 10,000 band, up to 10% for AGI above USD 100,000. The percentage applies to the whole AGI, and the base payment is divided by 12. The monthly payment is reduced by USD 50 for each dependent, with a USD 10 minimum. If an on-time payment does not cover the month's interest, the unpaid interest is waived; if it reduces principal by less than USD 50, a matching principal reduction of up to USD 50 is applied. Any balance left after 360 qualifying monthly payments is forgiven. For married borrowers filing jointly, joint AGI is used, with an adjustment when the spouse also has federal student loans; married borrowers filing separately use their own AGI.

AGI (Example)	Rate	Monthly RAP payment	Compare: interest per month on USD 47,617.40 at 8.07%
10,000	minimum	10.00	320.23
35,000	3%	87.50	320.23
65,000	6%	325.00	320.23
150,000, one dependent	10%	1,200.00	320.23

Excel for a single borrower with AGI in B1 and dependents in B2: =MAX(10,IF(B1<=10000,10,MIN(10,ROUNDUP((B1-10000)/10000,0))/100*B1/12)-50*B2). At an AGI of USD 150,000 the RAP payment (USD 1,200) is far above the Tiered Standard payment (USD 456.98) and would repay the federal loan in about 46 months (=NPER(8.07%/12,-1200,47617.40)). RAP matters most as insurance: if income falls, the payment falls with it.

Other points to check: the older plans (SAVE, PAYE, ICR) are being phased out for existing borrowers; borrowers covered by the legacy provision may have different options; Public Service Loan Forgiveness eligibility and qualifying payments depend on your employer and plan. Official sources: studentaid.gov, the federal servicer's RAP information page, and the ETS summary New Federal Student Loan Rules Took Effect (updated 1 July 2026). Check before you rely on it.

Outside the US. Many countries run income-contingent student loans where repayment is a share of income above a threshold and collected through payroll or tax; others have fixed schedules. Rules for borrowers who move abroad differ. Check your country's official scheme for the current threshold, rate, term and what happens if you live and work in another country, and model loans in the currency you will repay them in.

6. Payoff strategies: avalanche and snowball

Avalanche. Extra money goes to the loan with the highest interest rate. It minimises total interest.
Snowball. Extra money goes to the loan with the smallest balance. It closes accounts sooner, which some people find motivating; field evidence on consumer debt suggests that closing individual accounts helps people stick to repayment (Gal and McShane 2012).

6.1 Worked example A: USD 2,600 a month (fully solved)

Tomás sets a repayment budget of USD 2,600 a month (28.9% of his estimated take-home pay at a 28% effective tax rate). The minimums are USD 1,461.02, leaving USD 1,138.98 of extra payment.

Strategy (Example)	First loan paid off	Debt-free after	Total interest
Minimum payments only (USD 1,461.02)	Private, month 120	180 months	75,863.41
Avalanche, USD 2,600 (private first, 9.00%)	Private, month 44	61 months	29,363.86
Snowball, USD 2,600 (federal first, smaller balance)	Federal, month 34	61 months	30,737.84

The higher budget, not the strategy, saves most of the interest: USD 46,499.55 against the minimums. Between the two strategies, avalanche saves USD 1,373.98, because the rate gap (8.07% against 9.00%) is small. Snowball closes the first loan ten months sooner. In a spreadsheet, build one column per loan with interest, minimum, extra and balance, and an =IF that sends the extra payment to the target loan until its balance reaches zero.

6.2 Exercise C: your strategy (unsolved)

Item	Your value
Sum of minimum payments	[ ]
Monthly repayment budget and share of take-home pay	[ ]
Strategy chosen and why	[ ]
Debt-free month and total interest under the chosen strategy	[ ]
Rule for windfalls (bonus, tax refund)	[For example: 50% to the target loan, 50% to savings]

7. Refinancing and prepayment

7.1 Refinancing break-even

If a lender offers to refinance LN-002 at 7.25% fixed over the same ten years:

Measure (Example)	Value	Excel
New monthly payment	930.52	`=PMT(7.25%/12,120,-79260)`
Monthly saving	73.51	`=1004.03-930.52`
Total interest saved over ten years	8,821.38	`=(PMT(9%/12,120,-79260)-PMT(7.25%/12,120,-79260))*120`
If a 1.5% fee is paid in cash	1,188.90	`=79260*1.5%`
Break-even	16.2 months	`=1188.90/73.51`

Questions before refinancing: is the new rate fixed or variable, and what is the cap? Does the term change (a longer term can lower the payment and raise the total)? Is there a fee or prepayment penalty? Does the cosigner stay liable? What hardship options does the new lender offer? For federal loans, the decisive question is what you lose: refinancing a federal loan into a private one ends access to RAP, federal deferment and forbearance, and federal discharge rules, and it cannot be reversed.

7.2 Prepayment

Extra payments reduce principal and every future month's interest. Adding USD 200 a month to LN-002 repays it in 91.1 months instead of 120 (=NPER(9%/12,-1204.03,79260), so 92 payments with a smaller last one) and saves USD 10,803.07 of interest. Before prepaying, ask the servicer to apply extra amounts to principal on the target loan rather than to future payments.

Prepaying a loan earns a certain return equal to its after-tax interest rate. Whether that beats other uses of the money (an emergency fund, employer retirement matching, investing) depends on your risk, liquidity needs and tax position. The worksheet gives the questions; the answer is yours or your adviser's:

Question	Your answer
Is the emergency fund at its target?	[ ]
Is any employer retirement match being left unused?	[ ]
After-tax rate on each loan (check whether any interest is deductible where you live)	[ ]
Expected return and risk of the alternative use	[ ]
How would a job loss in the next 12 months affect each choice?	[ ]

8. Affordability and risk

Ratio (Example)	Value	Excel
Minimum payments as a share of gross monthly income (USD 12,500)	11.7%	`=1461.02/(150000/12)`
Minimum payments as a share of take-home pay (USD 9,000)	16.2%	`=1461.02/(150000/12*72%)`
Repayment budget as a share of take-home pay	28.9%	`=2600/(150000/12*72%)`

Lenders and planners use different thresholds for debt-to-income; use the ratios to compare scenarios rather than as a pass mark. Risk scenarios to write down:

Scenario	Effect on payments	Action you have prepared
Job loss for six months	[Minimums continue unless deferment applies]	[Emergency fund covers USD x; contact servicers]
Income 30% lower	[Federal payment can move to RAP; private payment unchanged]	[ ]
Variable rate rises 2 points	[ ]	[ ]
Move to another country	[Currency of income changes; check loan terms]	[ ]

9. Timeline

When (G = graduation)	Step
G-6 months	List every loan, log in to each servicer account, confirm balances and accrued interest
G-3 months	Build schedules, compare federal plans, set the repayment budget against the offer salary
G to G+1 month	Check when the grace period ends for each loan; set up automatic payments
First payment	Confirm the payment was applied correctly and the plan is the one you chose
Every month	Pay minimums automatically; send the extra payment to the target loan
Every year	Review income, plan, rates and refinancing offers; recertify income if on RAP
Each windfall	Apply your windfall rule
Final payment	Get a paid-in-full letter from each lender; keep it

10. Quality checklist and common mistakes

Checklist:

Every loan is in the inventory with servicer figures.
Accrued interest is in the starting balance.
Minimum payments are automated.
Federal plan choice is recorded with the date the rules were checked.
The extra-payment rule is written and the servicer applies extra to principal.
Refinancing offers are compared on payment, total, fee, break-even and lost protections.
Affordability ratios are checked at a lower income.
Non-US loans are modelled in the currency you repay them in.

Common mistakes:

Missing the end of the grace period. The first payment arrives sooner than many graduates expect.
Ignoring accrued interest. The example balance was USD 16,877.40 higher than the amount borrowed.
Choosing the longest term for the lowest payment. The 15-year federal term costs USD 12,717.76 more interest than ten years.
Extra payments applied to future months. Without instructions some servicers advance the due date instead of reducing principal.
Refinancing federal loans without pricing the protections. RAP and federal discharge rules are lost for good.
Comparing refinancing on the monthly payment only. Check the total, the fee and the break-even month.
No emergency fund. A single surprise can lead to missed payments and fees.
Assuming the pre-2026 federal plans. New borrowers choose between RAP and the Tiered Standard Plan; check current rules.
Forgetting to recertify income on an income-driven plan. Payments can jump when certification lapses.
Ignoring currency. A loan in one currency repaid from income in another carries exchange-rate risk.

My notes and next steps

Next step	Owner	Due
[Confirm balances with each servicer]	[Your name]	YYYY-MM-DD
[Set up automatic payments for all minimums]	[Your name]	YYYY-MM-DD
[Request two refinancing quotes for the private loan]	[Your name]	YYYY-MM-DD

Sources and further reading

Primary and evidence:

Fisher, I. (1930). The Theory of Interest. Macmillan.
Gal, D. and McShane, B. B. (2012). Can small victories help win the war? Evidence from consumer debt management. Journal of Marketing Research, 49(4), 487-501.

Official and dated sources (checked 2026-10-28): ETS, New Federal Student Loan Rules Took Effect (updated 1 July 2026); Edfinancial (a Federal Student Aid servicer), Repayment Assistance Plan information page, edfinancial.studentaid.gov; Federal Student Aid, interest rates for Direct Loans first disbursed between 1 July 2026 and 30 June 2027 (fsapartners.ed.gov, June 2026); studentaid.gov.

Further reading: Berk and DeMarzo, Corporate Finance (annuities and amortising loans); Brealey, Myers and Allen, Principles of Corporate Finance. Open resource: OpenStax, Principles of Finance (CC BY-NC-SA 4.0), chapters on the time value of money and loan amortisation.

Answer key

Worked example B: monthly payment USD 300.58; interest in month 1 USD 162.50; total interest USD 13,282.99; at USD 400 a month the loan is repaid in 96.5 months.

Revision history

Version	Date	Author	Change
0.1	YYYY-MM-DD	[Your name]	First plan from template
[0.2]	YYYY-MM-DD	[Your name]	[Plan chosen, payments automated]

Standard and licence note

Based on standard loan amortisation mathematics and dated public facts from US Federal Student Aid, a federal loan servicer and ETS checked on 2026-10-28. The text, examples and numbers are original and fictional; they are not affiliated with or endorsed by any business school, lender, servicer or government body. Check the current official pages and your loan documents before you rely on any fact. Template licence: MIT.

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