10% of Discretionary Income (Standard for Direct Loans)
15% of Discretionary Income (For some Grad PLUS and Direct Consolidation Loans)
20% of Discretionary Income (For Direct Consolidation Loans made before July 1, 2006)
25% of Discretionary Income (SAVE Plan – Income-Driven Repayment Plan)
Estimated Monthly Payment
$0.00
Understanding Income-Based Loan Repayment
Income-Based Repayment (IBR) plans are designed to make student loan payments more manageable by tying them to your income and family size. Instead of a fixed payment amount, your monthly payment is recalculated annually based on your reported income and household size. This can be particularly helpful if you have high loan balances, low income, or a large family.
How the Calculation Works:
The core of income-based repayment calculations involves determining your "discretionary income." This is the difference between your adjusted gross income (AGI) and a certain percentage of the federal poverty guideline, which varies by family size and state.
For simplicity in this calculator, we're using a common approach:
Discretionary Income: We approximate discretionary income by taking your Annual Income and subtracting a poverty guideline factor. A common factor used is 150% of the poverty line for a household of your size. Since this calculator simplifies by asking for your total annual income directly, it assumes this is your AGI. The Poverty Guideline itself varies by family size and location. For the purpose of this calculator, we will use a simplified approach and assume a percentage of the annual income is the baseline for calculation, and the primary differentiator is the % of discretionary income you choose.
Monthly Discretionary Income: The calculated discretionary income is then divided by 12 to get a monthly figure.
Monthly Payment: A percentage (chosen from the dropdown) of your Monthly Discretionary Income is calculated to determine your estimated monthly payment.
Note: This calculator provides an estimation. Actual calculations may vary based on specific loan types, exact poverty guidelines for your location, and the specific terms of your loan servicer. It's crucial to consult your loan servicer for precise figures.
Key Features and Benefits:
Affordability: Payments are tied to what you can reasonably afford.
Lower Payments: Often results in lower monthly payments compared to standard repayment plans.
Loan Forgiveness: After 20-25 years of qualifying payments, remaining balances on Direct Loans may be forgiven (though forgiven amounts may be taxable).
Interest Subsidy: For some plans, if your monthly payment doesn't cover the accrued interest, the government may pay some of the unpaid interest.
Who Should Use This Calculator?
Borrowers with federal student loans.
Individuals experiencing financial hardship or with incomes that don't keep pace with loan payments.
Those seeking more manageable monthly payments and potential loan forgiveness.
Always verify your eligibility and specific payment amounts with your federal loan servicer.
function calculateIncomeBasedRepayment() {
var totalLoanBalance = parseFloat(document.getElementById("totalLoanBalance").value);
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var householdSize = parseInt(document.getElementById("householdSize").value);
var repaymentPlanPercentage = parseFloat(document.getElementById("repaymentPlan").value);
var resultValueElement = document.getElementById("result-value");
resultValueElement.textContent = "$0.00"; // Reset to default
// — Input Validation —
if (isNaN(totalLoanBalance) || totalLoanBalance <= 0) {
alert("Please enter a valid Total Loan Balance greater than zero.");
return;
}
if (isNaN(annualIncome) || annualIncome <= 0) {
alert("Please enter a valid Annual Income greater than zero.");
return;
}
if (isNaN(householdSize) || householdSize <= 0) {
alert("Please enter a valid Household Size greater than zero.");
return;
}
// — Simplified Poverty Guideline Approximation —
// This is a VERY simplified approximation. Real poverty guidelines are complex and vary by state.
// For demonstration, let's assume a baseline poverty level for a household of 1, and scale it.
// For example, if Federal Poverty Level for 1 is ~$15,000, we'll use 150% of that as a rough base.
// This is purely illustrative. Use real poverty guidelines for actual calculations.
var basePovertyLevel = 15000; // Approximate base poverty level for a single person household
var povertyLevelAdjustmentFactor = 0.10; // Adjust for each additional person
var povertyLevel = basePovertyLevel + (householdSize – 1) * (basePovertyLevel * povertyLevelAdjustmentFactor);
var discretionaryIncome = Math.max(0, annualIncome – povertyLevel); // Discretionary income cannot be negative
// — Calculation —
var monthlyDiscretionaryIncome = discretionaryIncome / 12;
var monthlyPayment = monthlyDiscretionaryIncome * (repaymentPlanPercentage / 100);
// Ensure the monthly payment doesn't exceed a standard 10-year repayment amount
// This is a simplification; actual rules are more complex.
var estimatedStandardMonthlyPayment = totalLoanBalance / 120; // 10 years * 12 months
var finalMonthlyPayment = Math.min(monthlyPayment, estimatedStandardMonthlyPayment);
// Format the result
resultValueElement.textContent = "$" + finalMonthlyPayment.toFixed(2);
}