Loans
Income-Driven Repayment Calculator
Income-driven repayment caps your student loan payment at a slice of discretionary income — what you earn above a multiple of the poverty line — rather than what you owe. It can make payments affordable, but a low payment that misses the interest lets the balance grow.
Formula shown below · Checked against published figures for 2026How we verify
IDR plans protect 150–225% of the poverty line. The rest is discretionary.
Income-driven monthly payment: $103
Income-driven monthly payment
$103
10% of discretionary income, spread over the year.
Your payment does not cover the interest, so the balance grows even as you pay — negative amortization. Some plans subsidise part of that unpaid interest; forgiveness after 20–25 years can also erase the balance, though forgiven amounts may be taxable. This trade-off is the heart of IDR: affordable now, larger later.
- Discretionary income
- $12,413
- Standard 10-year payment
- $444
- Lower each month by
- $341
- Monthly interest accruing
- $200
- Balance grows each month by
- $97
Income above 225% of the poverty line for 2.
Compare scenariosTry three values of one input
| Annual income (AGI) | |||
|---|---|---|---|
| Income-driven monthly payment | $62 | $103+$42 | $145+$83 |
| Discretionary income | $7,413 | $12,413+$5,000 | $17,413+$10,000 |
| Lower each month by | $382 | $341−$42 | $299−$83 |
| Balance grows each month by | $138 | $97−$42 | $55−$83 |
Every other input stays at the value you set above — currently $60,000 for annual income (agi). Differences are measured against the first column.
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How this calculator works
Discretionary income is your income minus the poverty guideline for your household size, times the protected multiple you set. The payment is the payment percentage of that, spread monthly. This is compared against the standard 10-year amortisation of the balance, and against the monthly interest to detect negative amortisation.
Poverty guidelines are the 2025 HHS figures for the 48 contiguous states; Alaska and Hawaii are higher. Specific IDR plans have shifted with legislation and court rulings, so the multiple and percentage are inputs rather than fixed — verify the current plan's terms. Forgiveness timelines and the taxability of forgiven balances are noted but not modelled.
Formula
Payment = max(0, (AGI − k × P(household size)) × r) ÷ 12- AGI
- Adjusted gross income
- P
- Federal poverty guideline for your household size
- k
- Protected multiple of the guideline, set by the plan
- r
- Share of discretionary income the plan charges
- Payment
- Monthly payment — zero when income falls under the protected amount
Income-driven plans are set by regulation and their terms have changed repeatedly, including the protected multiple and the share charged. Treat the result as an estimate of the mechanism and confirm current plan rules with your servicer before relying on a figure.
What this assumes
- The protected multiple of the poverty guideline and the share of discretionary income charged are set by regulation, and both have changed repeatedly. Confirm current plan terms with your servicer before relying on a figure.
- Household size and adjusted gross income as entered. Plans recertify annually, so the payment moves with your income rather than staying fixed.
- Forgiveness after the plan's repayment period, and Public Service Loan Forgiveness, are not modelled — both change the lifetime total substantially where they apply.
What changes this number
- Adjusted gross income
- The payment is a share of income above a protected floor, so a raise raises the payment and a bad year lowers it. Pre-tax retirement contributions reduce AGI and therefore the payment.
- Household size
- Raises the protected amount, which lowers the payment. It is the input borrowers most often forget to update at recertification.
- Which plan you are on
- The protected multiple and the percentage charged differ by plan, and the differences are large enough to change the payment by hundreds.
A worked example
Take the $60k income, household of 2 scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Annual income (AGI)
- $60,000
- Household size
- 2
- Loan balance
- $40,000
What it returns
- Income-driven monthly payment
- $103
- Discretionary income
- $12,413
- Standard 10-year payment
- $444
- Lower each month by
- $341
- Monthly interest accruing
- $200
Your payment does not cover the interest, so the balance grows even as you pay — negative amortization. Some plans subsidise part of that unpaid interest; forgiveness after 20–25 years can also erase the balance, though forgiven amounts may be taxable. This trade-off is the heart of IDR: affordable now, larger later.
Sources
- US Department of Health and Human Services, 2025 Poverty Guidelines
Published January 2025 · Figures last verified July 29, 2026
Calculator last reviewed August 8, 2026. How we verify
Try an example
Frequently asked questions
How is an income-driven repayment calculated?
It is a percentage — typically 10% — of your discretionary income, defined as income above a multiple of the federal poverty line for your household size. It ignores your balance entirely, so a large loan and a small one cost the same monthly if your income is the same.
What is discretionary income for student loans?
Your income above a set multiple of the poverty guideline for your household — historically 150%, and 225% under more generous plans. Everything below that multiple is protected, so lower earners and larger households pay less. Only the amount above it counts toward the payment.
What is negative amortization?
When your payment is smaller than the monthly interest, the shortfall is added to the balance and it grows despite your payments. It is common under IDR for large balances and low incomes. Some plans cover part of the unpaid interest, and forgiveness at the end can wipe out the grown balance.
Does income-driven repayment lead to forgiveness?
Yes — after 20 or 25 years of qualifying payments, or 10 years under Public Service Loan Forgiveness for eligible employers. The catch is that forgiven balances outside PSLF may be taxed as income in the year forgiven, which can be a large bill. PSLF forgiveness is tax-free.
Which plan should I use?
Federal IDR plans have changed repeatedly through legislation and litigation, so the specific names and parameters shift. This calculator lets you set the protected multiple and payment percentage to match whatever plan currently applies. Confirm the current terms at StudentAid.gov before relying on a figure.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.