Student loan debt is one of the most complex financial products in the United States, shaped by constantly changing federal programs, complicated repayment plans, and rules that differ based on the year you borrowed, income, marital status, and type of employment. 

In today’s world, so many people default to “just ask ChatGPT” for quick answers. But what happens when you do?

I posed two scenarios to ChatGPT. The first was straightforward: $20,000 in federal student loans, with a borrower earning $52,000 a year as a teacher. The second was more complicated: $220,000 in loans across undergraduate, graduate, and private loans, with a $120,000 income as an architect.

The results revealed the pitfalls of using artificial intelligence as a financial resource. 

While the tool offered a basic repayment overview, it also recommended outdated programs and struggled to provide clear answers on loan forgiveness programs like PSLF. Even when it recommended questions to help personalize the output, the questions weren’t enough to provide a better answer.

What ChatGPT Got Right

On the basics, ChatGPT performed reasonably well. For the $20,000 loan scenario, it correctly calculated the standard 10-year repayment plan: fixed monthly payments of about $230, leading to a payoff in a decade. That was accurate and aligned with student loan repayment calculators.

What’s funny is that it hedged it’s answer in the unpersonalized version (stating loan repayment between $200 and $250/mo), but then correctly calculated $230/mo when we asked for a personalized answer. 

When personalizing, it also threw out other programs like Teacher Loan Forgiveness, but it didn’t address which is better: PSLF or TLF? Also, it didn’t talk about how you cannot double-dip these programs.

In the second scenario, ChatGPT recognized that a borrower with $220,000 in debt and a high income would face steep monthly payments under the standard plan (around $2,500 to $2,600 – but it made assumptions on the debt amount for this calculation). 

It suggested strategies that many financial advisors would endorse: splitting approaches between federal and private loans, using forgiveness opportunities where possible, and refinancing private loans to secure lower interest rates. However, it couldn’t really tell you if these were the best since it didn’t ask to personalize or clarify anything. 

These suggestions demonstrate how AI can serve as a first stop for borrowers looking for an outline of their options.

Where ChatGPT Fell Short

The model’s weaknesses became clearer the more specific the scenarios became.

Outdated Program Recommendations

ChatGPT recommended the SAVE plan, an income-driven repayment option created during the Biden administration. But SAVE no longer exists, it was blocked by the 8th Circuit Court of Appeals back in 2024, and officially eliminated by the One Big Beautiful Bill Act. Recommending SAVE as the best option is impossible, because borrowers can’t enroll in it.

Incomplete Guidance on PSLF

When asked about Public Service Loan Forgiveness, ChatGPT noted that teachers might qualify but failed to fully explain eligibility requirements. Those requirements are important – both the 120 payments and qualifying repayment plan. The reason it matters in this scenario is that you’ll end up repaying the loan before reaching forgiveness – both on IBR or the Standard Plan. ChatGPT could be missing this because it thought the SAVE plan was an option.

Personalization Without Depth

When asked to personalize repayment, ChatGPT attempted to collect useful details: income, interest rate, career, and goals. But it didn’t know what questions to ask. For example, it didn’t ask family size – which is essential to calculate an accurate income-driven repayment plan question.

Finally, it didn’t “think” about the future – should a borrower wait around for the future Repayment Assistance Plan (RAP) that goes into effect in July 2026.

These missing elements illustrate why AI answers, while quick, cannot fully replace official calculators or professional advice.

Warning For Borrowers

For borrowers facing thousands in debt, incomplete answers can carry real consequences. A teacher told about SAVE might mistakenly believe they can continue making reduced payments under a plan that no longer exists. An architect with $220,000 in debt might underestimate the impact of private loan balances, thinking forgiveness options apply more broadly than they do.

The gaps reflect a broader issue: AI models generate answers based on patterns of words from historical articles, not live regulatory updates. For borrowers without prior knowledge of these changes, they could act on outdated advice, delaying repayment strategies or missing opportunities for forgiveness.

AI may provide basic definitions but not the precision needed when repayment rules shift under new laws, or even for individuals with complex situations.

Can AI Still Play A Role?

Despite these flaws, AI has potential to reduce confusion for overwhelmed borrowers. The structured responses can help people understand some of the basic definitions around student loans (federal versus private, standard repayment versus income-driven) and identify the trade-offs of extra payments.

But AI should be treated as a conversation starter, not an authority. Borrowers still need to cross-check answers with official sources like StudentAid.gov, loan servicers, or financial advisors who understand current law.

The Department of Education’s frequent changes to repayment programs make it nearly impossible for AI tools to remain perfectly current. For current student loan and financial information, you need to turn to reliable education and personal finance sources like The College Investor.

The best safeguard is to use AI for general frameworks while confirming details with student loan calculators and published program guidelines.

And remember – even the official StudentAid Loan Simulator isn’t correct (it’s being updated to reflect the current changes from the OBBBA). You can’t even find the correct answers on the government’s own website – so if ChatGPT or other AI tools are sourcing it – it’s not correct either.

What Student Loan Borrowers Should Do Instead

For those searching for the “best way to repay student loan” or the “right repayment plan,” the most reliable first step is to get organized with your own loans yourself and do actual research what repayment plans you’re eligible for.

If you want more help with your student loans, sites like ours, financial planners, and nonprofit resources can provide far more accurate estimates than AI at present.

The real value of AI, at least right now, is simply providing definitions. But whether those definitions are helpful or what you need for your own personal situation remains to be seen.

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