Transparent method
The formula
Worked example
Example inputs
How to interpret the result
An income-driven plan sets the payment as a share of income above a protected amount, not from the balance. With $70,000 of adjusted gross income, a $35,000 protected amount and a 10 percent rate, the payment is about $292 a month, or $3,500 a year, 4.4 percent of an $80,000 balance. The payment moves with income each year, and the balance may not fall if the payment is smaller than the interest. Plan details change, so use the official figures.
Before you rely on it
What to check
Use the plan's current formula and your latest tax return, and re-certify income on time. A missed deadline can raise the payment.
The common error
Where people go wrong with income-driven repayment calculator
Assuming the payment will always cover the interest. When it does not, the balance can grow, and the plan's forgiveness rules decide what happens in the end.
Sensitivity evidence
How applicable discretionary-income assessment rate changes the estimated monthly IDR payment
| Applicable discretionary-income assessment rate | Estimated monthly IDR payment | Annual payment | Annual payment as share of loan balance |
|---|---|---|---|
| 6.0% | $175 | $2,100 | 2.6% |
| 8.0% | $233 | $2,800 | 3.5% |
| 10.0%worked example | $292 | $3,500 | 4.4% |
| 12.0% | $350 | $4,200 | 5.3% |
| 14.0% | $408 | $4,900 | 6.1% |
Every input, tested
Which input moves the estimated monthly IDR payment most
| Input | Tested from | To | Estimated monthly IDR payment at each end | Swing |
|---|---|---|---|---|
| Adjusted gross income | $63,000 | $77,000 | $233 to $350 | $117 (40%) |
| Applicable discretionary-income assessment rate | 8.0% | 12.0% | $233 to $350 | $117 (40%) |
| Entered protected-income amount | $31,500 | $38,500 | $321 to $263 | $58 (20%) |
| Federal student-loan balance | $72,000 | $88,000 | $292 to $292 | none |
Two variables at once
Estimated monthly IDR payment by applicable discretionary-income assessment rate and adjusted gross income
| Applicable discretionary-income assessment rate \ Adjusted gross income | $56,000 | $70,000 | $84,000 |
|---|---|---|---|
| 6.0% | $105 | $175 | $245 |
| 8.0% | $140 | $233 | $327 |
| 10.0% | $175 | $292 | $408 |
| 12.0% | $210 | $350 | $490 |
| 14.0% | $245 | $408 | $572 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Adjusted gross income | $70,000 |
| Entered protected-income amount | $35,000 |
| Applicable discretionary-income assessment rate | 10.0% |
| Federal student-loan balance | $80,000 |
| Estimated monthly IDR payment | $292 |
| Annual payment | $3,500 |
| Annual payment as share of loan balance | 4.4% |
Where the inputs come from
Adjusted gross income comes from your latest tax return, and the protected-income amount is the share of income the plan leaves untouched, based on the poverty guideline for your household size. The assessment rate is the percentage of discretionary income the plan charges, and it differs between plans. Federal loan balance is used to compare the payment with the loan. The rules and available plans have changed in recent years, so confirm the current options for your loans at the Federal Student Aid website.
Using the estimated monthly IDR payment in a real decision
Compare it with the standard payment: a lower payment protects cash flow but can extend the loan and raise total interest, and remaining balances may be forgiven after 20 to 25 years, though forgiven amounts can be taxable in some cases.
When the result stops applying
The calculation is a simplified estimate that does not reflect plan-specific formulas, filing status rules for married borrowers, or interest subsidies. Payments are recertified each year using current income. Income-driven plans and their features have been changing through legislation and court decisions. Private loans do not qualify.
What to compare it with
Compare with the standard payment on the student loan payment calculator, and see the PSLF calculator for forgiveness after 120 qualifying payments. The student loan capitalization and payoff pages show how interest builds. The take-home pay calculator shows whether the payment fits your budget.
People also ask
Frequently asked questions
What is discretionary income?
Adjusted gross income above a protected amount tied to the federal poverty guideline for your family size. Income-driven payments are a percentage of it.
Do income-driven plans forgive the balance?
Remaining balances may be forgiven after 20 to 25 years of qualifying payments depending on the plan, and forgiveness has had different tax treatment over time.
Do I have to recertify each year?
Yes. You must update your income and family size each year, or the servicer can move you to a higher payment.