10 yrs
PSLF forgiveness timeline
20–25 yrs
IDR forgiveness timeline
5%
SAVE plan payment cap for undergrad borrowers
150%
Poverty line threshold for SAVE zero-payment qualification
The main federal repayment plans
- Standard (10-year): fixed monthly payment, highest monthly cost, lowest total interest, no forgiveness
- SAVE (Saving on a Valuable Education): 5% of discretionary income for undergrad loans, 10% for grad; balance doesn't grow if payment covers accruing interest
- PAYE (Pay As You Earn): 10% of discretionary income, 20-year forgiveness; requires financial hardship
- IBR (Income-Based Repayment): 10–15% of discretionary income depending on loan date; 20–25 year forgiveness
- PSLF (Public Service Loan Forgiveness): 10 years of qualifying payments on an IDR plan while working for a government or nonprofit employer; remaining balance forgiven tax-free
How IDR payments are calculated
Income-driven repayment plans calculate your payment as a percentage of your discretionary income — the difference between your adjusted gross income and a multiple of the federal poverty line for your family size. Under SAVE, that multiple is 225% of the poverty line; under PAYE and IBR, it's 150%. Borrowers below the threshold have a $0 required payment.
How to use the student loan calculator
- Enter your total federal student loan balance and weighted average interest rate
- Enter your current adjusted gross income and expected annual income growth
- Enter your family size for the poverty line calculation
- Select plans to compare (Standard, SAVE, PAYE, IBR, PSLF)
- Review monthly payment, total paid, projected forgiveness amount, and debt-free year for each plan
- Factor in whether forgiven IDR amounts will be taxed as income (PSLF forgiveness is currently tax-free)
⚠️ IDR forgiveness may be taxable
Unlike PSLF, amounts forgiven under 20/25-year IDR plans are currently treated as taxable income in the year of forgiveness. A $150,000 forgiven balance could generate a large unexpected tax bill. Factor this into your plan-comparison math.
Common mistakes to avoid
- Defaulting to standard repayment without comparing IDR plans — especially costly for high-balance, lower-income borrowers
- Missing PSLF eligibility by not enrolling in a qualifying IDR plan from the start
- Not recertifying income annually on IDR plans — missed recertification can cause payment shock
- Refinancing federal loans into private loans and losing IDR and PSLF eligibility
- Ignoring the tax impact on long-term IDR forgiveness when planning finances in the forgiveness year
Related calculators
Check the Debt-to-Income Ratio Calculator to see how your student loan payment affects mortgage qualification. The Take-Home Pay Calculator shows whether a PAYE or SAVE payment fits your actual monthly budget. And the Net Worth Calculator helps you track whether your debt is shrinking as a percentage of your overall financial picture.