Estimate your Income-Based Repayment (IBR) student loan payments.
Calculate Your IBR Payment
Enter your financial details to estimate your monthly student loan payment under the Income-Based Repayment (IBR) plan.
Enter your total outstanding student loan debt.
Your gross annual income (before taxes).
Number of people in your household, including yourself.
The annual poverty guideline for your family size and state (e.g., 48070 for a family of 4 in contiguous US states in 2023). Check HHS.gov for current figures.
10% of Discretionary Income (Newer Loans)
15% of Discretionary Income (Older Loans)
Select the IBR plan applicable to your loans. Newer loans generally have a 10% calculation.
Your Estimated IBR Results
Estimated Monthly Payment: $0.00
$0.00
$0.00
How it's calculated:
1. Discretionary Income = Annual Income – (Poverty Guideline * 150% for 10% plan, or 100% for 15% plan). If this is negative, it's treated as $0.
2. Annual IBR Payment = Discretionary Income * Repayment Percentage (10% or 15%).
3. Monthly IBR Payment = Annual IBR Payment / 12. This is capped at the amount you would pay on a 10-year Standard Repayment Plan.
4. Estimated Repayment Period is calculated by dividing the Total Loan Balance by the Annual IBR Payment. This is an estimate and doesn't account for interest accrual or potential forgiveness.
Loan Balance Over Time Under IBR
IBR Payment Schedule Estimate
Year
Starting Balance
Annual Payment
Interest Paid
Ending Balance
Enter details and click Calculate.
What is an IBR Repayment Plan?
The Income-Based Repayment (IBR) plan is a crucial student loan repayment option designed to make managing federal student loan debt more affordable. It adjusts your monthly payment based on your income and family size, ensuring that your loan payments are manageable and do not exceed a certain percentage of your discretionary income. This plan is particularly beneficial for borrowers who have high debt relative to their income or who are experiencing financial hardship.
Who Should Use It: Borrowers with federal student loans (Direct Loans, FFEL Program loans) who find their standard monthly payments unaffordable. This includes recent graduates, those in lower-paying public service or non-profit jobs, or anyone facing unexpected financial challenges. It's also a pathway to potential loan forgiveness after 20-25 years of qualifying payments.
Common Misconceptions:
IBR automatically forgives loans: While IBR can lead to forgiveness, it requires 20 or 25 years of payments, depending on when you took out your loans and if they are subsidized.
IBR is always the cheapest option: If your income is high relative to your debt, a standard repayment plan might result in paying less interest over time.
IBR applies to all loans: IBR specifically applies to federal student loans. Private loans do not qualify.
IBR Repayment Plan Formula and Mathematical Explanation
The core of the IBR plan lies in calculating your "discretionary income" and then determining a percentage of that amount for your monthly payment. The IBR repayment plan calculator simplifies this process, but understanding the underlying math is key.
Discretionary Income Calculation
Discretionary income is generally defined as the difference between your annual income and 150% of the federal poverty guideline for your family size (for newer loans) or 100% of the poverty guideline (for older loans).
Formula: Discretionary Income = Annual Income - (Poverty Guideline Multiplier * Poverty Guideline for Family Size)
* Poverty Guideline Multiplier: 1.50 (for 10% IBR plan) or 1.00 (for 15% IBR plan).
* If the calculated discretionary income is negative, it is treated as $0.
Monthly Payment Calculation
Your monthly payment is then calculated as a percentage of your discretionary income.
* Repayment Percentage: 10% or 15%, depending on the IBR plan type.
Cap on Monthly Payments
Crucially, your IBR monthly payment is capped. It cannot be more than the amount you would pay under the 10-year Standard Repayment Plan based on your loan balance at the time you entered IBR.
Cap Formula: 10-Year Standard Payment = Total Loan Balance / 120 months Actual Monthly Payment = MIN(Monthly IBR Payment, 10-Year Standard Payment)
Estimated Repayment Period
This is a simplified estimate.
Formula: Estimated Repayment Period (Years) = Total Loan Balance / (Monthly IBR Payment * 12)
This calculation does not account for interest accrual, which will extend the actual repayment period. It also doesn't factor in potential loan forgiveness.
Variables Table
Variable
Meaning
Unit
Typical Range
Total Loan Balance
The total amount owed on federal student loans.
Currency ($)
$1,000 – $200,000+
Annual Income
Gross annual income before taxes.
Currency ($)
$20,000 – $150,000+
Family Size
Number of individuals in the household.
Count
1 – 10+
Poverty Guideline
Annual poverty guideline for the specified family size and location.
Currency ($)
$12,000 – $50,000+
Poverty Guideline Multiplier
Factor used to calculate the portion of the poverty line subtracted from income (1.50 or 1.00).
Decimal
1.00 or 1.50
Repayment Percentage
Percentage of discretionary income used for monthly payment (10% or 15%).
Percentage (%)
10% or 15%
Discretionary Income
Income remaining after subtracting the poverty guideline adjustment.
Currency ($)
$0 – $100,000+
Monthly IBR Payment
The calculated monthly student loan payment.
Currency ($)
$0 – $500+
Practical Examples (Real-World Use Cases)
Example 1: Recent Graduate with Moderate Debt
Sarah is a recent graduate with $40,000 in federal student loans. She earns $50,000 annually and lives alone (family size 1). The 2023 poverty guideline for a single person in the contiguous US is $14,580. She has newer loans, so she qualifies for the 10% IBR plan.
Discretionary Income = $50,000 – $21,870 = $28,130
Annual IBR Payment = $28,130 * 0.10 = $2,813
Monthly IBR Payment = $2,813 / 12 = $234.42
10-Year Standard Payment = $40,000 / 120 = $333.33
Actual Monthly Payment = MIN($234.42, $333.33) = $234.42
Estimated Repayment Period = $40,000 / $2,813 ≈ 14.2 years (without interest)
Result: Sarah's estimated monthly payment is $234.42. This is significantly lower than the $333.33 she would pay on a standard plan, freeing up cash flow. The estimated repayment period is about 14 years, but interest will likely extend this.
Example 2: Mid-Career Professional with High Debt
John has accumulated $120,000 in federal student loans over his career. His current annual income is $75,000, and he has a family of 4. The 2023 poverty guideline for a family of 4 in the contiguous US is $30,000. He has older loans, so he is on the 15% IBR plan.
Discretionary Income = $75,000 – $30,000 = $45,000
Annual IBR Payment = $45,000 * 0.15 = $6,750
Monthly IBR Payment = $6,750 / 12 = $562.50
10-Year Standard Payment = $120,000 / 120 = $1,000.00
Actual Monthly Payment = MIN($562.50, $1,000.00) = $562.50
Estimated Repayment Period = $120,000 / $6,750 ≈ 17.8 years (without interest)
Result: John's estimated monthly payment is $562.50. This is well below the $1,000 standard payment. While his debt is substantial, the IBR plan makes it manageable. He will likely be eligible for loan forgiveness after 25 years of payments, provided he meets all requirements.
How to Use This IBR Repayment Plan Calculator
Our IBR Repayment Plan Calculator is designed for ease of use, providing quick estimates for your potential monthly student loan payments. Follow these simple steps:
Enter Total Student Loan Balance: Input the total amount you owe across all your federal student loans.
Enter Annual Income: Provide your gross annual income before taxes. If your income fluctuates, use a reasonable average or your most recent figure.
Enter Family Size: Specify the number of people in your household, including yourself.
Enter Poverty Guideline: Find the current annual poverty guideline for your family size and state (check HHS.gov). Input this figure.
Select IBR Plan Type: Choose between the 10% or 15% plan based on when your loans were disbursed. If unsure, consult your loan servicer or use the 10% option for newer loans.
Click 'Calculate': The calculator will instantly display your estimated monthly payment, discretionary income, annual payment, and estimated repayment period.
How to Read Results:
Estimated Monthly Payment: This is your projected payment under the IBR plan. It's capped by the 10-year standard payment amount.
Discretionary Income: This shows the income figure used to calculate your payment. Lower discretionary income means lower payments.
Annual IBR Payment: Your total estimated payments over a year.
Estimated Repayment Period: A rough estimate of how long it might take to repay your loan based on the calculated annual payment, excluding interest.
Decision-Making Guidance: Compare the calculated IBR payment to your current standard payment or what you can realistically afford. If the IBR payment offers significant relief and aligns with your financial goals, it might be a suitable option. Remember to consider the potential for loan forgiveness and the impact of interest over a longer repayment term. Always consult with your loan servicer for personalized advice.
Key Factors That Affect IBR Results
Several factors significantly influence your calculated IBR payment and overall loan repayment experience. Understanding these can help you better plan and manage your student debt.
Annual Income: This is the most direct factor. Higher income leads to higher discretionary income and thus higher monthly payments. Fluctuations in income will directly impact your IBR payment each year you recertify.
Family Size: A larger family size increases the poverty guideline used in the calculation, which in turn reduces discretionary income and lowers your monthly payment.
Poverty Guideline: This is set by the government and changes annually. It also varies by location (contiguous states, Alaska, Hawaii). An increase in the poverty guideline (due to inflation or policy changes) can lower your payment, assuming other factors remain constant.
Loan Balance: While not directly used in the monthly payment calculation (unless it triggers the cap), a larger loan balance means a longer repayment period and potentially more interest accrued over time. It also determines the 10-year standard payment amount used for the cap.
Interest Rate: Although IBR payments are calculated based on income, interest continues to accrue on your loans. If your calculated IBR payment is less than the interest charged each month, the unpaid interest capitalizes (is added to your principal balance), increasing your total debt over time. This is a critical aspect of IBR, especially for newer loans with the 10% plan.
IBR Plan Percentage (10% vs. 15%): The percentage of discretionary income applied (10% or 15%) directly impacts the payment amount. Newer loans generally use 10%, resulting in lower payments compared to the 15% plan used for older loans.
Recertification: You must recertify your income and family size annually (or when a life event like marriage or job change occurs) to maintain your IBR status and ensure your payment is based on current financial circumstances. Failure to recertify can result in payments reverting to the standard amount and potential capitalization of unpaid interest.
Frequently Asked Questions (FAQ)
Q1: What is the difference between the 10% and 15% IBR plans?
A1: The primary difference is the percentage of your discretionary income used to calculate your monthly payment. Newer loans (disbursed on or after Oct. 1, 2007, with at least one disbursement after Oct. 1, 2011) generally qualify for the 10% plan. Older loans may qualify for the 15% plan. The 10% plan typically results in lower monthly payments and potentially faster loan forgiveness (20 years vs. 25 years).
Q2: Does the IBR plan forgive my student loans?
A2: Yes, under certain conditions. After making qualifying payments for 20 or 25 years (depending on loan type and disbursement dates), any remaining loan balance may be forgiven. However, the forgiven amount may be considered taxable income in the year it is forgiven, though current legislation (as of late 2023) has waived this tax for federal student loan forgiveness through 2025.
Q3: How often do I need to update my information for IBR?
A3: You must recertify your income and family size annually. You'll typically receive a notice from your loan servicer when it's time to recertify. It's crucial to submit the required documentation on time to avoid losing your IBR benefits and potential interest capitalization.
Q4: What happens if my income increases significantly?
A4: If your income increases, your discretionary income and thus your monthly IBR payment will also increase. However, your payment is still capped at the 10-year Standard Repayment Plan amount. If your income rises high enough, your payment might reach this cap, or even exceed what you'd pay on a standard plan if you didn't have the cap.
Q5: Can I switch from IBR to another repayment plan?
A5: Yes, you can switch to a different repayment plan, such as the Standard Repayment Plan, at any time. However, switching away from an income-driven plan like IBR might mean you lose eligibility for future loan forgiveness and could result in a higher monthly payment. Consider the long-term implications carefully.
Q6: Does IBR apply to private student loans?
A6: No, the Income-Based Repayment (IBR) plan is specifically for federal student loans (Direct Loans, FFEL Program loans). Private student loans are not eligible for federal repayment plans like IBR. You would need to contact your private lender directly to discuss potential repayment options.
Q7: What is the difference between IBR and other income-driven plans like PAYE or REPAYE/SAVE?
A7: While all are income-driven, they differ in calculation methods, repayment percentages, forgiveness timelines, and capitalization rules. For example, the Saving on a Valuable Education (SAVE) plan, formerly REPAYE, often has lower payments and more favorable interest benefits than IBR. The Pay As You Earn (PAYE) plan offers 20-year forgiveness for all loan types. It's important to compare these plans to find the best fit for your situation. You can explore these using a student loan repayment calculator.
Q8: What if my calculated IBR payment is $0?
A8: If your income is low enough relative to your family size and the poverty guideline, your discretionary income may be $0 or negative. In such cases, your calculated monthly payment will be $0. However, you still need to recertify annually to maintain this $0 payment status and ensure you remain on track for potential loan forgiveness. Interest may still accrue depending on the specific loan type and plan rules.