Income-Driven Repayment Plan Comparison

Understanding This Income-Driven Repayment Payment Comparison

This income-driven repayment comparison estimates two payment schedules from annual gross income and household size. It displays a SAVE-style monthly amount at 5% of the calculator’s discretionary-income figure and a REPAYE-style monthly amount at 10%, then extends those unchanged monthly figures across 10 and 20 years respectively. It is a quick scenario tool, not a servicer determination of eligibility, a repayment schedule, or a forgiveness decision.

Federal income-driven repayment rules can depend on loan program, enrollment history, tax filing status, family information, recertification, and changing federal policy. In contrast, this page deliberately uses one poverty-line estimate and holds the entered income constant. Use it to see how its stated assumptions affect the displayed comparison, then verify current options and payment rules with the Department of Education or a loan servicer.

Introduction: SAVE and REPAYE Figures Shown Here

SAVE: In this calculator, the SAVE result is 5% of the calculated discretionary income, divided into 12 monthly payments. The displayed “10-Year Cost” is simply that monthly result multiplied by 120. It is not a projection of a changing balance, accrued interest, or an individual forgiveness outcome.

REPAYE: The REPAYE result on this page is 10% of the same calculated discretionary income, divided by 12. Its displayed “20-Year Cost” is the monthly figure multiplied by 240. The comparison therefore isolates the different percentages and fixed periods used in the script.

Other IDR plans: PAYE and IBR are included in the reference matrix below for context, but this form does not calculate PAYE or IBR payments. Their eligibility and payment rules should not be inferred from the two results shown after submitting the form.

Discretionary Income in This IDR Comparison Formula

The income-driven repayment calculator first estimates a poverty line from family size, then subtracts that estimate from gross annual income. Its calculation is:

For a one-person household, the poverty-line estimate in the code is $14,600. Each additional person adds $5,000. Negative discretionary income is set to zero, so neither displayed monthly payment becomes negative. The tool uses gross annual income as entered; it does not request adjusted gross income, tax filing status, a spouse’s income, or any deductions.

The monthly results are calculated as discretionary income × 0.05 ÷ 12 for SAVE and discretionary income × 0.10 ÷ 12 for REPAYE. The payment percentages, not the loan balance or interest rate, drive the two displayed payment amounts.

Worked Example: This Calculator’s SAVE and REPAYE Arithmetic

Consider the values prefilled in the income-driven repayment form: $50,000 of gross annual income and a family size of one. The calculator estimates discretionary income as $50,000 − $14,600, or $35,400.

• The SAVE-style monthly figure is $35,400 × 0.05 ÷ 12 = $147.50.
• The displayed SAVE 10-year payment total is $147.50 × 120 = $17,700.
• The REPAYE-style monthly figure is $35,400 × 0.10 ÷ 12 = $295.00.
• The displayed REPAYE 20-year payment total is $295.00 × 240 = $70,800.

Those totals assume that income, family size, and the calculated monthly payment never change for the entire displayed period. They do not add interest, reduce principal, account for annual recertification, or establish that a borrower qualifies for either plan. Before relying on a comparison, check the income and family-size assumptions and obtain an official payment estimate.

Interest, Balances, and Forgiveness in This IDR Estimate

The Total Loan Balance and Average Interest Rate fields help identify the scenario being considered, but the current calculation does not use either field in its payment or total-paid arithmetic. As a result, the displayed fixed-period totals are cumulative scheduled payments under this simplified model, not total loan cost, payoff amounts, unpaid-interest projections, or a balance remaining at forgiveness.

Forgiveness is also not calculated from the balance. The recommendation text refers to the SAVE 10-year figure as a condition to consider only; it does not determine whether a balance meets any program requirement. Actual interest treatment, capitalization, qualifying-payment counts, and tax consequences require current, borrower-specific guidance and may differ from general descriptions of IDR programs.

Factors Affecting an Income-Driven Repayment Choice

Income documentation: This IDR comparison uses the gross annual income entered in the form. An official payment may use different income information or documentation, so compare like-for-like figures before treating this estimate as a budget amount.

Family size: Family size changes the calculator’s poverty-line estimate by $5,000 per additional person. A larger entered household lowers its calculated discretionary income and therefore lowers both displayed monthly amounts.

Loan type: The loan-type menu is not part of the current arithmetic. Loan type can nevertheless matter in a real-world review of plan availability and terms, particularly for Parent PLUS and graduate borrowing.

Balance and interest rate: Because these inputs are not used in the displayed formula, changing them alone will not change the results. They remain important when evaluating affordability, repayment duration, and potential remaining debt outside this simplified comparison.

Changes over time: Income, household size, enrollment status, and plan rules can change. A fixed-income estimate is best read as one snapshot rather than a multi-year prediction.

Limitations of This Income-Driven Repayment Calculator

This income-driven repayment calculator is intentionally narrower than an official federal repayment tool. It does not calculate an amortization schedule, interest accrual, capitalization, payment caps, annual recertification, partial financial hardship, consolidation effects, Public Service Loan Forgiveness, taxes, or a final forgiven balance. It also does not determine eligibility for SAVE, REPAYE, PAYE, IBR, or any other program.

The poverty-line estimate is hard-coded as $14,600 for one person plus $5,000 for each additional family member. It is an assumption used by this page, not a confirmation of a current official guideline for every location or circumstance. Check current federal guidance and your servicer’s calculation before changing a repayment plan.

Using IDR Results for Student-Loan Budget Planning

The most useful way to read the two results is as a comparison of the calculator’s stated percentages under one income assumption. If gross income rises while family size stays unchanged, discretionary income rises dollar for dollar once it is above the estimated poverty line, increasing both monthly amounts. If family size increases while income stays fixed, the opposite occurs in this model.

A lower displayed payment is not automatically the lower-cost borrowing strategy. Since this page does not model interest or a changing principal balance, it cannot compare lifetime financing cost against a standard repayment plan, refinancing, or an official IDR schedule. Use the values as a starting point for questions about monthly cash flow rather than as a recommendation to enroll.

Keeping an IDR Scenario Current

An income-driven repayment estimate should be revisited when earnings, household circumstances, loan status, or federal program rules change. Keep the inputs tied to the same time period: the form expects an annual income and a whole-number family size. A scenario based on stale income or an incorrect household count can be less useful than no estimate at all.

For a fuller decision, gather current loan balances, rates, loan types, repayment history, and official eligibility information. Then compare the calculator’s simplified payment figures with an official repayment estimate and with the payment you can sustain in your broader budget.

How to use this income-driven repayment plan comparison calculator

1. Enter Total Loan Balance ($) for the federal student-loan scenario you want to review.
2. Enter Gross Annual Income ($), the annual income figure used by this calculator’s payment formula.
3. Enter Family Size so the calculator can apply its household poverty-line estimate.
4. Submit the IDR comparison, then test another income or family-size scenario to see how the SAVE-style and REPAYE-style figures change.