How student loans work, country by country

The single biggest thing competitor calculators get wrong about “worldwide” student loans is treating every country’s system as a US-shaped amortizing loan with a different currency symbol. It isn’t. Here’s what actually differs.

United States — fixed-rate, with an income-driven option

U.S. federal loans (Direct Subsidized/Unsubsidized, PLUS) behave like a standard fixed-rate loan by default: a set balance, a set rate, a set term. Borrowers can additionally opt into an income-driven repayment (IDR) plan, which changes the payment to a percentage of discretionary income and forgives any remaining balance after a set number of years. Both models are covered here — standard on the main calculator, income-driven on the IDR calculator.

United Kingdom — income-contingent by default

UK student loans (Plan 1/2/4/5, Postgraduate Loan) are income-contingent from day one, not by choice. You repay a fixed percentage of income above a threshold, collected automatically through the tax system once you’re earning enough. Interest accrues the whole time, and any remaining balance is written off after a fixed number of years — usually decades — regardless of how much you’ve paid. Model this on the IDR calculator.

Australia — indexed, income-contingent, and no fixed term

HECS-HELP works similarly to the UK system — repayment is a percentage of income above a threshold, collected via the tax system — but the balance is adjusted for indexation rather than a conventional interest rate, and there is typically no automatic time-based write-off. The debt persists until paid.

Canada — standard amortizing, with a hardship safety net

Canada Student Loans (combined with provincial loans) behave like a standard amortizing loan once repayment starts, with a Repayment Assistance Plan available if income is low — reducing or pausing payments without changing the loan’s fundamental fixed-rate structure. Model the baseline on the Standard Loan Calculator.

India — standard amortizing, often with a moratorium period

Education loans from Indian banks are standard amortizing loans, but almost always include a moratorium period — no payments due while you’re studying (plus a short grace period after) — during which interest typically still accrues and is added to the balance once repayment begins. The Standard Loan Calculator’s deferment/capitalization option is built specifically to model this — see the deferment and capitalization guide for exactly how that works.

Germany — partly interest-free by design

BAföG, Germany’s main student support scheme, is half grant and half interest-free loan, with a capped total repayment amount regardless of how much was borrowed. Private/bank loans (including KfW student loans) behave like conventional amortizing loans instead.

Ireland — primarily grant-funded, private loans behave conventionally

Most Irish students rely on the SUSI grant system rather than a loan; where a loan is used (typically a private bank loan), it behaves like a standard amortizing loan.

Using the presets

Selecting a country preset on either calculator pre-fills currency, number-formatting, loan-type labels, and a typical starting rate/threshold — not your exact terms. Always confirm your actual rate, threshold, and term with your lender or the relevant government program before relying on the result.