How this calculator works
Income-driven repayment plans cap the monthly payment using a formula rather than the loan balance. The usual structure subtracts a protected amount, often 100% or 150% of the HHS poverty guideline for your household size, from your income, then charges a share of the remainder. After a set number of qualifying years, any balance still outstanding is forgiven. This page lets you enter the formula and the term of whichever plan you are considering and projects the balance, the amount forgiven and what you will pay along the way. Unpaid interest is added to the balance in the projection. The result is an estimate, not a repayment quote: plan rules, forgiveness terms, qualifying payment rules and tax treatment of forgiveness change over time, and some forgiveness may be taxable.
Formula
Protected income = multiple x annual poverty guideline. Discretionary income = max(0, gross income - protected income). Monthly payment = discretionary income x income share / 12. The balance is then compounded monthly at the annual rate divided by 12 with that payment applied for 12 x (term - years already paid) months. The remaining balance is the amount forgiven.
Worked example
A $30,000 balance at 6.5% with 18 years left, income of $40,000, a $15,650 guideline, a 100% multiple and a 10% share leaves $24,350 of discretionary income. The monthly payment is $24,350 x 0.10 / 12 = $202.92. Over 216 months those payments total $43,830 and leave a balance of $13,496.30, which is the amount forgiven when the term ends.
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Frequently asked questions
Which repayment plan does this model?
It models the shared structure of income-driven plans. Enter the income share and poverty multiple used by the plan you are considering. The names, percentages and terms of the plans change, so check the current rules at studentaid.gov and with your loan servicer.
Is forgiven student loan debt taxable?
It depends on the programme and on the tax law in force. Some forgiveness is excluded from income and some is not. This calculator does not model tax; ask a tax adviser about your situation.
What counts as a qualifying payment?
Each programme has its own rules about eligible loans, repayment plans and payment timing. A month only counts if it meets those rules, which is why the years already paid is an input rather than something this calculator can work out.
What happens if my payment is below the monthly interest?
The balance grows. The projection applies the payment and lets any shortfall add to the balance, so a low income can produce a larger forgiven amount but also a larger loan.