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Income-Driven Repayment Calculator

Income-driven repayment with the forgiveness outcome. Where the payment is below the monthly interest the balance grows despite paying, which is the feature people find hardest to accept and which forgiveness is designed to resolve.

Also called: idr calculator, income based repayment.

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Monthly payment
$200.96

$200.96 a month, 10% of $24,115.00 of discretionary income. Standard repayment would be $704.00. Over 20 years you would pay $88,078.17 and have $66,103.10 forgiven. The payment is below the monthly interest, so the balance grows while you pay. Under a plan ending in forgiveness that is tolerable; leaving the plan makes it real.

Discretionary income
$24,115.00
Protected income
$33,885.00
Standard 10 year payment
$704.00
Total paid before forgiveness
$88,078.17
Balance forgiven
$66,103.10
Monthly interest at the start
$335.83
On negative amortisation
The payment is below the monthly interest, so the balance grows while you pay. Under a plan ending in forgiveness that is tolerable; leaving the plan makes it real.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

The payment is a share of discretionary income, defined as income above a multiple of the federal poverty guideline for your family size. On a large balance relative to income the payment often falls below the monthly interest, so the balance grows while you pay. That negative amortisation is alarming but not necessarily a problem: the plan ends in forgiveness, so the growing balance is written off. It becomes a problem only if you leave the plan, at which point the accrued interest is real.

discretionary income is income above a multiple of the poverty guideline, and the payment is a share of it
I
Income
G
Poverty guideline

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a 58,000 income with a 62,000 balance

Loan balance
$62,000.00
Interest rate
6.5%
Annual income
$58,000.00
Family size
1
Poverty guideline for your family size
$15,060.00
Income protected, as a multiple of the guideline
225%
Share of discretionary income
10%
Years to forgiveness
20
Annual income growth
3%

Monthly payment$200.96

15,060 x 2.25; 10% of 24,115 over 12

Open this example

income below the protected level means no payment

Loan balance
$62,000.00
Interest rate
6.5%
Annual income
$30,000.00
Family size
1
Poverty guideline for your family size
$15,060.00
Income protected, as a multiple of the guideline
225%
Share of discretionary income
10%
Years to forgiveness
20
Annual income growth
3%

Monthly payment$0.00

boundary: the protection floor

Open this example

Method and limits

What it assumes

  • A constant plan formula, which legislation and litigation have repeatedly changed.

What it deliberately does not model

  • Plan terms, protected income multiples and forgiveness periods have changed several times and continue to.
  • Forgiven balances may be taxable as income depending on the plan and the year.
  • Annual recertification of income is required and a missed one can capitalise interest.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Why is my balance growing while I pay?
Because the payment is below the monthly interest. Under a plan ending in forgiveness that is tolerable, since the balance is written off. It matters if you leave the plan.
Is forgiveness taxable?
It has depended on the plan and the year. Public service forgiveness has been untaxed federally; other forgiveness has sometimes been taxable, which can be a large bill.