Student Loan IDR Calculator
Estimate your monthly payment under Income-Driven Repayment (IDR) plans.
SAVE (Saving on a Valuable Education)
REPAYE (Revised Pay As You Earn)
GGR (Graduation Grant Forgiveness)
ICR (Income-Contingent Repayment)
Your estimated monthly payment is:
Understanding Income-Driven Repayment (IDR) Plans
Income-Driven Repayment (IDR) plans are a crucial feature of the U.S. federal student loan system. They offer borrowers a way to manage their student loan debt by adjusting monthly payments based on their income and family size. These plans can significantly lower your monthly payments, and any remaining loan balance may be forgiven after 20 or 25 years of qualifying payments.
How IDR Plans Work
IDR plans calculate your monthly payment as a percentage of your discretionary income. Discretionary income is generally defined as the difference between your adjusted gross income (AGI) and 150% of the poverty guideline for your family size. The specific percentage and the calculation of discretionary income vary slightly by plan.
Key IDR Plans and Their Payment Calculations:
- SAVE (Saving on a Valuable Education): This plan is the most recent and generally offers the lowest monthly payments. For most borrowers, the payment is calculated as 10% of your discretionary income. Discretionary income for SAVE is calculated as the difference between your AGI and 225% of the poverty guideline for your family size. Payments are recalculated annually.
- REPAYE (Revised Pay As You Earn): Monthly payments are typically 10% of your discretionary income. Discretionary income is calculated as the difference between your AGI and 150% of the poverty guideline for your family size. Payments are recalculated annually.
- GGR (Graduation Grant Forgiveness): Note: The Graduation Grant Forgiveness (GGR) plan is a common term for older or less common programs and may not be a standard federal IDR plan. For the purpose of this calculator, we will use a representative 15% of discretionary income as an example calculation. If this were a standard plan, payments might be calculated as 15% of your discretionary income (AGI minus 150% of the poverty guideline).
- ICR (Income-Contingent Repayment): This is the oldest IDR plan and is the only one available for Parent PLUS loans that have been consolidated. Payments are generally calculated as the lesser of 20% of your discretionary income or the amount you'd pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on your income. Discretionary income is AGI minus 150% of the poverty guideline.
The Poverty Guideline
The poverty guideline is set annually by the Department of Health and Human Services (HHS) and varies by state (for Alaska and Hawaii) and family size. For simplicity in this calculator, we'll use a national average poverty guideline for a household of one, which is approximately $14,580 in 2023. The calculator adjusts this for household size.
Calculator Logic Explained
The calculator performs the following steps:
- Determines the poverty guideline multiplier based on the selected plan (e.g., 2.25 for SAVE, 1.50 for others).
- Retrieves your annual income, total loan balance, and household size.
- Calculates the relevant poverty guideline amount:
Poverty Guideline Base * Poverty Guideline Multiplier * Household Size. - Calculates your discretionary income:
Annual Income - Poverty Guideline Amount. If this value is negative, discretionary income is treated as $0. - Determines the payment percentage based on the selected IDR plan.
- Calculates the estimated monthly payment:
(Discretionary Income * Payment Percentage) / 12. - If the calculated monthly payment is lower than $0 (which can happen if the poverty guideline exceeds income), it defaults to $0.
- The total loan balance is used to understand context but doesn't directly factor into the monthly payment calculation for IDR plans, though it influences the total repayment term and forgiveness amount.
Example Calculation (using SAVE Plan):
- Total Loan Balance: $40,000
- Annual Income: $55,000
- Household Size: 2
- IDR Plan: SAVE
- Poverty Guideline Base (approx. 2023): $14,580
- SAVE Multiplier: 2.25
- Poverty Guideline for Household Size 2: $14,580 * 2.25 * 2 = $65,610
- Discretionary Income: $55,000 (Annual Income) – $65,610 (Poverty Guideline) = -$10,610. Since it's negative, Discretionary Income is $0.
- SAVE Payment Percentage: 10%
- Estimated Monthly Payment: ($0 * 0.10) / 12 = $0.00
In this example, because the borrower's income, adjusted for family size, is below the poverty guideline threshold for the SAVE plan, their monthly payment is $0.
Disclaimer
This calculator provides an estimate based on the information you provide and general assumptions about poverty guidelines. Actual payments may vary. Always consult official U.S. Department of Education resources or a financial aid advisor for precise calculations and information specific to your loan portfolio. The poverty guideline used is an approximation and may need to be updated annually.