Income Driven Repayment Calculator
Calculate your estimated monthly student loan payments under federal Income-Driven Repayment (IDR) plans like SAVE, PAYE, and IBR.
Based on 225% of the Federal Poverty Level (SAVE Plan rules).
Monthly Payment Comparison
IDR Payment vs. Standard 10-Year Plan
Comparison of IDR Plans
| Plan Type | Income Threshold | % of Discretionary | Monthly Payment |
|---|
What is an Income Driven Repayment Calculator?
An income driven repayment calculator is an essential financial tool designed for federal student loan borrowers. It helps determine your monthly loan payment based on two primary factors: your annual income and your household size. Unlike the Standard Repayment Plan, which divides your balance over 120 fixed installments, an income driven repayment calculator uses formulas set by the Department of Education to ensure your payments remain affordable relative to your "discretionary income."
Borrowers often use an income driven repayment calculator to compare different federal plans such as SAVE (Saving on a Valuable Education), PAYE (Pay As You Earn), and IBR (Income-Based Repayment). It is particularly useful for those whose debt-to-income ratio is high, as it can often result in a $0 monthly payment for lower-income individuals while still counting toward eventual loan forgiveness.
Income Driven Repayment Calculator Formula and Mathematical Explanation
The math behind the income driven repayment calculator relies on the Federal Poverty Level (FPL). The calculation generally follows these steps:
- Determine the Federal Poverty Guideline for your state and family size.
- Calculate the protected income (usually 150% or 225% of the FPL).
- Subtract the protected income from your Adjusted Gross Income (AGI) to find your Discretionary Income.
- Multiply the Discretionary Income by the plan's percentage (5% to 10%).
- Divide by 12 to get the monthly payment.
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| AGI | Adjusted Gross Income | USD ($) | $15,000 – $250,000 |
| FPL | Federal Poverty Level | USD ($) | $15,060+ (2024) |
| Threshold | Income Protection % | Percentage (%) | 150% – 225% |
| Payment % | Share of Discretionary | Percentage (%) | 5% – 15% |
Practical Examples (Real-World Use Cases)
Example 1: The Social Worker
A borrower earns $45,000 annually with a family size of 1 living in Ohio. Using the income driven repayment calculator, we see the poverty line is approximately $15,060. Under the SAVE plan (225% threshold), their protected income is $33,885. Their discretionary income is $11,115. At 10%, their monthly payment would be roughly $92.63.
Example 2: The Large Household
A borrower earns $65,000 with a family size of 4. The poverty line is $31,200. The 225% protection threshold is $70,200. Because their income is below the threshold, the income driven repayment calculator shows a monthly payment of $0, even though they have a high loan balance.
How to Use This Income Driven Repayment Calculator
Using this income driven repayment calculator is straightforward:
- Step 1: Enter your most recent AGI from your tax return.
- Step 2: Input your current household size.
- Step 3: Select your state of residence to apply the correct poverty guidelines.
- Step 4: Input your total federal loan balance and interest rate.
- Step 5: Review the "Monthly Payment" result and compare it to the standard payment shown in the chart.
Key Factors That Affect Income Driven Repayment Calculator Results
- Discretionary Income: This is the most critical variable. As your income rises, your payment increases proportionally.
- Family Size: Larger families receive a higher income protection allowance, which lowers the monthly payment.
- Federal Poverty Level (FPL): These numbers are updated annually by the government, meaning your income driven repayment calculator results may change slightly every year.
- Plan Type: The SAVE plan offers a 225% protection threshold, while older plans like IBR only offer 150%, leading to higher payments.
- Loan Type: Only federal Direct Loans are eligible for all plans. Private loans cannot be calculated here.
- Tax Filing Status: If you are married filing separately, only your income is used in many IDR plans, which is a key strategy for many borrowers.
Frequently Asked Questions (FAQ)
No, this income driven repayment calculator is specifically for federal student loans. Private lenders typically do not offer income-linked payment options.
SAVE is the newest IDR plan. It replaced REPAYE and offers the lowest monthly payments and prevents interest from growing if your payment doesn't cover it.
You should use it annually before you recertify your income or whenever you experience a significant change in income or family size.
Yes. If your income is below 225% of the poverty level (for SAVE) or 150% (for IBR/PAYE), your payment will be $0.
In most IDR plans, your payment is based solely on income, not interest. However, interest determines how much your balance grows over time.
After 20 or 25 years of qualifying payments (including $0 payments), any remaining balance is forgiven under IDR programs.
Generally, yes. Borrowers can switch between different income-driven plans, though some restrictions apply to older IBR plans.
Currently, federal student loan forgiveness is tax-free through 2025. After that, it may be treated as taxable income unless Congress extends the waiver.
Related Tools and Internal Resources
- Federal Student Aid Official Site – The primary source for managing your federal loans.
- Student Loan Refinance Calculator – Compare private refinancing rates if you have high income.
- Student Loan Interest Calculator – See how much interest you pay over the life of your loan.
- Public Service Loan Forgiveness (PSLF) Tool – For borrowers working in non-profits or government.
- Budgeting for Graduates – Helpful tips for managing cash flow after university.
- Loan Consolidation Guide – Learn if combining your loans is right for you.