How US income-driven repayment plans work
Federal IDR plans set your monthly payment as a percentage of your discretionary income rather than your total loan balance. Discretionary income is calculated as the difference between your annual AGI and a statutory multiple of the federal HHS poverty guideline.
Under the SAVE plan, payments are capped at 5% to 10% of income above 225% of the poverty line. Under PAYE and new IBR, payments are 10% of income above 150% of the poverty line. Any remaining balance is forgiven after 20 or 25 years.
Worked example
For a single borrower in the contiguous US with an AGI of $55,000 and $45,000 in federal student debt at 6.53%:
The 2024 poverty line for a family of 1 is $15,060. Under SAVE, the 225% exemption is $33,885, leaving discretionary income of $21,115.
At 10% of discretionary income, the annual payment is $2,111.50, or $175.96 per month. This saves over $330 per month compared to the standard 10-year payment of $511.66.
Inputs for the income-based repayment calculator
Adjusted Gross Income (AGI)
Your annual income from IRS Form 1040 line 11.
Family size
Your household size for federal poverty guideline calculations.
Federal student loan balance
Total eligible Direct Loan debt.
Interest rate
Weighted average interest rate on your federal loans.
Plan selection
Choose among SAVE, PAYE, IBR (New/Old), or ICR.
CALCULATOR QUESTIONS
Calculate income based student loan repayment questions
Can my IDR payment be $0 per month?
Yes. If your annual AGI is below the poverty exemption threshold (e.g. $33,885 for a single borrower under SAVE), your required monthly payment is $0 and counts toward forgiveness.
Do private student loans qualify for IDR?
No. Federal IDR plans are available exclusively for Direct Loans and eligible federal student debt.