Income-Driven Repayment Calculator Formula

Understand the math behind the income-driven repayment calculator. Each variable explained with a worked example.

Use the Income-Driven Repayment Calculator

Formulas Used

Estimated Monthly Payment

monthly_payment = discretionary * plan_pct / 100 / 12

Annual Payment

annual_payment = discretionary * plan_pct / 100

Discretionary Income

discretionary_income = discretionary

150% of Poverty Line

poverty_guideline = 150 / 100 * poverty_line

Variables

VariableDescriptionDefault
agiAdjusted Gross Income(USD)50000
family_sizeFamily Size1
loan_balanceStudent Loan Balance(USD)40000
plan_pctPayment Percentage(%)10
poverty_lineDerived value= 15060 + (family_size - 1) * 5380calculated
discretionaryDerived value= max(agi - 150 / 100 * poverty_line, 0)calculated

How It Works

Income-Driven Repayment Plans

How Payments Are Calculated

Monthly Payment = (AGI - 150% of Poverty Line) x Plan% / 12

Plan Comparison

| Plan | Payment | Forgiveness | |---|---|---| | SAVE (REPAYE) | 10% discretionary | 20-25 years | | IBR | 15% discretionary | 25 years | | ICR | 20% discretionary | 25 years |

Poverty Guidelines (2024, Continental US)

  • 1 person: $15,060
  • Each additional: +$5,380
  • Discretionary income = AGI minus 150% of the poverty line

    • Worked Example

    $50,000 AGI, single, $40,000 loans, SAVE plan (10%).

    agi = 50000family_size = 1loan_balance = 40000plan_pct = 10
    1. 01Poverty line (1 person) = $15,060
    2. 02150% of poverty = $22,590
    3. 03Discretionary income = $50,000 - $22,590 = $27,410
    4. 04Annual payment = $27,410 x 10% = $2,741
    5. 05Monthly payment = $2,741 / 12 = $228

    Ready to run the numbers?

    Open Income-Driven Repayment Calculator