Student Loan Forgiveness Calculator
Estimates your monthly payment under Income-Driven Repayment (IDR) plans by comparing your income to the federal poverty guideline for your family size. Use it when evaluating IBR vs. SAVE plan options.
About this calculator
Income-Driven Repayment plans cap monthly payments as a percentage of your discretionary income — the amount you earn above a poverty-line threshold. The federal poverty guideline used here is $12,760 for a single person, plus $4,480 for each additional family member. Discretionary income = annualIncome − (12,760 + 4,480 × (familySize − 1)). Under the original IBR plan, your annual payment is 15% of discretionary income; under newer plans (SAVE/REPAYE/PAYE), it is 10%. The monthly payment formula is: monthlyPayment = max(0, discretionaryIncome × paymentPercent) / 12. If your income is at or below the poverty threshold, your payment is $0. Balances remaining after 20–25 years of qualifying payments are forgiven (though forgiven amounts may be taxable under current law).
How to use
Inputs: annual income $55,000, family size 3, repayment plan IBR (15%). Step 1: Poverty threshold = $12,760 + $4,480 × (3 − 1) = $12,760 + $8,960 = $21,720. Step 2: Discretionary income = $55,000 − $21,720 = $33,280. Step 3: Annual IBR payment = $33,280 × 0.15 = $4,992. Step 4: Monthly payment = $4,992 / 12 = $416/month. Under the SAVE/10% plan: $33,280 × 0.10 / 12 = $277/month. The difference of $139/month illustrates why plan choice matters significantly over a 20-year repayment window.
Frequently asked questions
What is the difference between IBR and SAVE income-driven repayment plans?
IBR (Income-Based Repayment) caps payments at 15% of discretionary income for borrowers who took loans before July 2014, or 10% for newer borrowers. The SAVE plan (Saving on a Valuable Education), which replaced REPAYE, also uses 10% but applies a more generous poverty-line multiplier (225% of the federal poverty line vs. 100–150% in older plans), meaning more income is sheltered and monthly payments are often lower. SAVE also eliminates interest accrual beyond your payment amount, preventing balances from growing. Forgiveness timelines differ too: IBR forgives after 20–25 years, while SAVE forgives undergraduate loans after 20 years.
How does family size reduce my income-driven repayment payment?
A larger family size raises the federal poverty guideline threshold, which increases the income that is sheltered from the payment calculation. Each additional family member adds approximately $4,480 to your threshold (based on the federal poverty guidelines used in this calculator). For example, a family of 4 has a threshold roughly $13,440 higher than a single person, meaning $13,440 more of annual income is exempt from the discretionary income calculation. At a 10% payment rate, that translates to about $112/month less in student loan payments for a family of 4 versus a single person with the same income.
When does student loan forgiveness actually kick in under IDR plans?
Under most IDR plans, any remaining loan balance is forgiven after 20 or 25 years of qualifying payments, depending on the plan and whether your loans include graduate school debt. SAVE and PAYE forgive after 20 years; IBR forgives after 20 years for new borrowers and 25 for older ones. Borrowers must recertify their income annually to stay enrolled and maintain qualifying payment counts. Historically, forgiven amounts under IDR have been treated as taxable income by the IRS, though legislation has temporarily exempted them through 2025 — future tax treatment is uncertain and should factor into your planning.