Income-driven repayment plans cap your federal student loan payment at a percentage of your discretionary income rather than what you owe. This calculator estimates your monthly payment under each plan and shows how long you would pay before the remaining balance is forgiven.
Example 1 — A single filer earning $55,000. For a family size of one in the contiguous states, 150% of the 2024 poverty guideline is $15,060 × 1.5 = $22,590. Discretionary income is $55,000 − $22,590 = $32,410. Under the SAVE plan at 10% of discretionary income divided by 12, the monthly payment is about $270. Under IBR at 15%, it would be roughly $405 — a difference of $1,620 a year.
Example 2 — The married-filing-separately lever. A couple with a combined AGI of $120,000 files jointly and sees payments based on the full household income. Filing separately excludes the spouse's income from the IDR calculation, potentially cutting the payment substantially — at the cost of losing joint filing tax benefits. Run both scenarios before deciding.
Example 3 — The $0 payment path. If AGI falls below 150% of the poverty guideline, the calculated payment is $0. Under the SAVE plan, $0 payments still count toward forgiveness, and unpaid interest is not capitalized. For a borrower between jobs or in graduate school, this can preserve the forgiveness clock at no cost.
Example 4 — Forgiveness math. A $40,000 balance at 6.5% accrues roughly $2,600 in interest in year one. A $270 monthly payment covers only $3,240 a year — barely above interest. On a 20-year clock, the balance can actually grow before forgiveness wipes it out, which is why origination-year principal matters less than the payment-to-interest ratio.
| Plan | Payment Formula | Forgiveness | Eligible Loans |
|---|---|---|---|
| SAVE | 10% of discretionary income (5% for undergrad, phased) | 20 years (undergrad) / 25 (grad) | Direct, FFEL consolidated |
| PAYE | 10% of discretionary income, capped at standard payment | 20 years | Direct only |
| IBR (new borrower) | 10% of discretionary income | 20 years | Direct, FFEL |
| IBR (old borrower) | 15% of discretionary income | 25 years | Direct, FFEL |
| ICR | 20% of discretionary income or 12-year fixed | 25 years | Direct, FFEL |
IDR forgiveness is generally treated as taxable income unless a specific exclusion applies. Budget for the tax bill years in advance.
If you work for a qualifying employer, PSLF forgives the balance tax-free after 120 qualifying payments — far better than a 20-year IDR clock.
Payments are recalculated each year from documented income. Missing recertification can spike your payment or capitalize interest.
Under joint filing, both incomes count toward discretionary income. Filing separately is often the single largest lever available.
Income-driven repayment exists because a fixed 10-year repayment schedule does not fit a borrower whose income starts low and rises over time. Instead of amortizing a fixed balance over a fixed term, IDR plans recalculate your payment every year from your tax return and family size, and they forgive whatever remains after a set number of years — 20 or 25 depending on the plan and whether your loans are undergraduate or graduate.
The mechanic that makes IDR work is the discretionary income concept. Federal law protects 150% of the poverty guideline for your family size from being counted toward your payment obligation. Only income above that line is subject to the plan's percentage. This is why a borrower earning $35,000 with a family of two can end up with a payment under $100 a month, and why a borrower who loses their job can drop to a $0 payment without defaulting.
IDR is the right structure for borrowers whose debt-to-income ratio is high — commonly anyone owing more than roughly their annual salary, graduates of professional programs with large balances and modest early-career pay, borrowers pursuing public service careers, and anyone who needs payment stability through an income disruption. It is generally the wrong structure for borrowers with small balances and stable high incomes, who will pay more in total interest by stretching a modest debt over 20 years than by simply clearing it on the standard plan.
IDR forgiveness is not automatically tax-free. The forgiven balance is normally treated as ordinary income in the year it is discharged, which can produce a substantial tax bill on a large balance. The American Rescue Plan Act made student loan forgiveness tax-free at the federal level through the end of 2025, and some states have their own exclusions, but rules vary and change. Public Service Loan Forgiveness is different: balances forgiven under PSLF have historically been excluded from federal income tax. Any borrower relying on a forgiveness timeline should model the tax consequence years ahead rather than at discharge.
| Family Size | 48 States & DC | Alaska | Hawaii | 150% (48 states) |
|---|---|---|---|---|
| 1 | $15,060 | $18,810 | $17,310 | $22,590 |
| 2 | $20,440 | $25,540 | $23,500 | $30,660 |
| 3 | $25,820 | $32,270 | $29,690 | $38,730 |
| 4 | $31,200 | $39,000 | $35,880 | $46,800 |
| 5 | $36,580 | $45,730 | $42,070 | $54,870 |
| 6 | $41,960 | $52,460 | $48,260 | $62,940 |
| 7 | $47,340 | $59,190 | $54,450 | $71,010 |
| 8 | $52,720 | $65,920 | $60,640 | $79,080 |
Guidelines are updated annually by the Department of Health and Human Services and are the figures the Department of Education uses for IDR calculations.
⚠️ Important Note: This calculator provides an educational estimate based on published IDR formulas, 2024 poverty guidelines, and the income you enter. Actual payments are set by your loan servicer using documented AGI from your tax return, your verified family size, and the specific loan types in your portfolio. IDR plan availability and terms are subject to change by regulation and litigation. Forgiveness may be taxable. This is not legal, tax, or financial advice — confirm your official payment with your servicer or at StudentAid.gov.
Discretionary income is your adjusted gross income minus 150% of the federal poverty guideline for your family size and state. Only the amount above that protected floor is multiplied by the plan percentage to determine your annual payment obligation.
The SAVE plan generally produces the lowest payment because it uses the lowest percentage of discretionary income at 10% for graduate loans and a reduced rate for undergraduate loans, and it excludes more income from the calculation than older plans. PAYE and new-borrower IBR also use 10%, but their income exclusion rules differ.
Most IDR plans forgive the remaining balance after 20 years of qualifying payments, while the older IBR plan for pre-2007 borrowers and ICR use 25 years. SAVE uses 20 years for undergraduate debt and 25 years if any graduate loans are included.
Federal IDR forgiveness is generally treated as taxable income in the year of discharge, unless a statutory exclusion applies. Federal relief legislation made student loan forgiveness tax-free at the federal level through the end of 2025. Some states follow the federal exclusion and others do not, so state treatment varies.
If your discretionary income is zero or negative, your calculated payment is $0. Under the SAVE plan, $0 payments still count toward forgiveness and unpaid interest is not added to your principal, so a period of low income does not damage your forgiveness progress.
For married borrowers, filing separately can exclude a spouse income from the IDR calculation and substantially reduce the payment. The trade-off is losing joint filing tax benefits such as certain credits and deductions, so the correct answer depends on which effect is larger. Run both scenarios.