SIAM Review, Volume 64, Issue 3, Page 689-709, August 2022.
Federal student loans are fixed-rate debt contracts with three main special features: (i) borrowers can use income-driven schemes to make payments proportional to their income above subsistence; (ii) after several years of being in good standing, the remaining balance is forgiven but taxed as ordinary income; and (iii) accrued interest is simple, i.e., not capitalized. For a very small loan, the cost-minimizing repayment strategy dictates maximum payments until full repayment, forgoing both income-driven schemes and forgiveness. For a very large loan, the minimal payments allowed by income-driven schemes are optimal. For intermediate balances, the optimal repayment strategy may entail an initial period of minimum payments to exploit the noncapitalization of accrued interest, but when the principal is being reimbursed maximal payments always precede minimum payments. Income-driven schemes and simple accrued interest mostly benefit borrowers with very large balances.

中文翻译：

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最小化联邦学生贷款的还款成本

SIAM 评论，第 64 卷，第 3 期，第 689-709 页，2022 年 8 月。
联邦学生贷款是具有三个主要特点的固定利率债务合同：(ii) 经过数年的良好信誉后，剩余余额被免除，但作为普通收入征税；(iii) 应计利息很简单，即未资本化。对于一笔非常小的贷款，成本最小化的还款策略要求在完全还款之前最高还款，放弃以收入为导向的计划和宽恕。对于一笔非常大的贷款，收入驱动计划允许的最低还款额是最优的。对于中间余额，最佳还款策略可能需要初始期的最低还款额，以利用应计利息的非资本化，但是当本金得到偿还时，最高还款总是先于最低还款。收入驱动的计划和简单的应计利息主要有利于余额非常大的借款人。