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Student Loan Forgiveness Calculator

Loan

Estimate your monthly IDR payment and loan forgiveness amount under SAVE, PAYE, IBR, ICR, or PSLF. See total paid and years until forgiveness in seconds.

Current Loan Balance
$
Annual Gross Income
$
Family Size
people

Repayment Plan

5% of discretionary · 20 yr forgiveness

Loan Interest Rate
%
Annual Income Growth
%

Starting Monthly Payment

$0/mo

SAVE Plan · 5% of discretionary

Interest subsidy — balance never grows

Total Amount Paid$0
Estimated Forgiveness$0 (paid in full)
Years to Forgiveness0 yrs

What is a Loan Forgiveness?

A Student Loan Forgiveness Calculator estimates your monthly income-driven repayment (IDR) payment and projects how much of your federal student loan balance would be forgiven at the end of your repayment term. By entering your loan balance, annual income, family size, repayment plan, interest rate, and expected income growth, you can model your entire repayment timeline — from starting payment to total dollars paid to estimated forgiveness — for any of the five major federal repayment programs.

Federal student loan repayment in the US is unlike a standard mortgage or auto loan. Rather than a fixed payment based on the balance owed, income-driven repayment plans set your monthly obligation as a percentage of your discretionary income — the difference between your annual income and a multiple of the Federal Poverty Line for your family size. If that calculated amount is less than full interest, your balance may grow over time. At the end of the repayment term (10 to 25 years depending on the plan), whatever balance remains is discharged — wiped clean.

The five programs this calculator models are SAVE, PAYE, IBR, ICR, and PSLF. SAVE (Saving on a Valuable Education) is the newest and most generous IDR plan for most borrowers: it uses a higher income threshold (225% of poverty line instead of 150%) and provides an interest subsidy that prevents your balance from ever growing above what you originally owed. PSLF is distinct from the IDR plans — it forgives your entire remaining balance after just 10 years of qualifying payments while working in public service, and that forgiveness is permanently tax-free.

Understanding these options before choosing a repayment plan can save tens of thousands of dollars. If you are also evaluating how student loan debt affects your ability to qualify for a mortgage, pair this calculator with the Debt-to-Income Ratio Calculator to see how your monthly IDR payment factors into your DTI ratio.

How to use this Loan Forgiveness calculator

  1. Enter your Current Loan Balance — the total outstanding federal student loan balance, not your original loan amount. Find this at studentaid.gov. Include all federal loans you plan to consolidate or that are already in the Direct Loan program.

  2. Enter your Annual Gross Income — your total pre-tax income from all sources. If you have a job offer, use the starting salary. For self-employed borrowers, use adjusted gross income. Remember: this is used to calculate IDR payments, so accuracy matters.

  3. Set your Family Size — include yourself plus any dependents you claim for tax purposes. Adding a spouse or child raises the poverty line threshold and lowers your discretionary income, reducing your payment. Update this annually when you recertify.

  4. Select your Repayment Plan — choose from SAVE, PAYE, IBR, ICR, or PSLF. For most borrowers with newer loans, SAVE typically produces the lowest payment. For those in qualifying public service jobs, PSLF almost always produces the best long-term outcome. Try multiple plans to compare.

  5. Enter the Loan Interest Rate — use your actual weighted-average interest rate. Federal undergraduate loan rates for 2024–2025 are 6.53%; graduate loans are 8.08%; PLUS loans are 9.08%. If you have multiple loans, StudentAid.gov shows your average rate.

  6. Set Annual Income Growth — your projected annual salary increase. The Bureau of Labor Statistics reports average wage growth of 3–4% annually. Use a conservative rate (2–3%) for a cautious projection; a higher rate (5–6%) models an optimistic career trajectory.

  7. Read the four outputs — compare Starting Monthly Payment against what you can afford. Check Total Amount Paid to find the least expensive plan. Note the Estimated Forgiveness Amount and its potential tax treatment. Confirm Years to Forgiveness aligns with your career timeline.

Formula & Methodology

2025 Federal Poverty Guidelines (continental US):

FPL(n) = $15,650 + (n − 1) × $5,500

Where n = family size

Discretionary income by plan:

SAVE: Discretionary = max(0, Annual Income − 2.25 × FPL)

PAYE / IBR / PSLF: Discretionary = max(0, Annual Income − 1.50 × FPL)

ICR: Discretionary = max(0, Annual Income − 1.00 × FPL)

Monthly IDR payment:

Monthly Payment = Discretionary Income × Plan Rate% ÷ 12

Where Plan Rate = 5% (SAVE) · 10% (PAYE, IBR, PSLF) · 20% (ICR)

Monthly balance update:

Monthly Interest = Balance × (Annual Rate ÷ 100 ÷ 12)

For SAVE: New Balance = max(0, Balance − max(0, Payment − Interest))

For others: New Balance = max(0, Balance + Interest − Payment)

Forgiveness amount:

If Balance > 0 after Forgiveness Years × 12 months → Forgiveness = remaining Balance

If Balance reaches $0 before forgiveness date → Forgiveness = $0 (paid off early)

Worked example:

Loan balance: $45,000 · Annual income: $50,000 · Family size: 1 · Plan: SAVE · Rate: 6.5%

FPL for family of 1: $15,650 · SAVE threshold: 2.25 × $15,650 = $35,213

Discretionary income: $50,000 − $35,213 = $14,787/yr

Monthly payment: $14,787 × 5% ÷ 12 = $62/month

Monthly interest accrual: $45,000 × 6.5% ÷ 12 = $244/month

Since $62 < $244, SAVE interest subsidy covers $182/month — balance stays flat at $45,000

Over 20 years (240 payments): Total paid = $62 × 240 = $14,880

Forgiveness amount: $45,000 (the full original balance, never grew due to SAVE subsidy)

Compare with PAYE (no interest subsidy): Balance grows to ~$108,000 over 20 years (negative amortization), but that larger balance is forgiven — with a potential tax bill. SAVE eliminates the balance growth problem entirely.

Key assumptions: The calculator models the first-year payment based on current income, then grows income annually by the stated growth rate. It does not account for annual recertification deadlines, plan switching, loan consolidation requirements, or potential future changes to repayment plan rules. PSLF requires employer certification and consistent on-time qualifying payments — this calculator estimates financial outcomes, not PSLF eligibility.

Frequently Asked Questions

The Student Loan Forgiveness Calculator estimates your monthly income-driven repayment (IDR) payment and the amount that would be forgiven at the end of your repayment term under plans like SAVE, PAYE, IBR, ICR, or PSLF. It uses 2025 Federal Poverty Guidelines and the official income percentage formulas to project your starting payment, total amount paid, estimated forgiveness, and years until forgiveness based on your loan balance, income, family size, and chosen plan.
The main income-driven repayment plans are: SAVE (Saving on a Valuable Education — 5% of discretionary income, 20-year forgiveness with an interest subsidy that prevents balance growth); PAYE (Pay As You Earn — 10%, 20 years); IBR (Income-Based Repayment — 10%, 20 years for newer borrowers); ICR (Income-Contingent Repayment — 20%, 25 years); and PSLF (Public Service Loan Forgiveness — 10% IDR payments while working for a qualifying non-profit or government employer, forgiven after 10 years). PSLF forgiveness is tax-free; IDR forgiveness may be taxable.
SAVE (formerly REPAYE) has two key advantages over other IDR plans. First, the income threshold is higher — you subtract 225% of the Federal Poverty Line from your income to find discretionary income, versus 150% for PAYE and IBR. This means lower payments for most borrowers. Second, SAVE has an interest subsidy: if your payment does not fully cover accrued interest, the government covers the difference and your balance never grows above its original amount. This prevents the balance runaway that can occur on other IDR plans.
For 2025 (continental US), the Federal Poverty Line is $15,650 for a household of one, increasing by $5,500 for each additional person: $21,150 for two, $26,650 for three, $32,150 for four. IDR plans use a multiple of this line as the income threshold before payments apply — SAVE uses 225% ($35,213 for a single person), while PAYE, IBR, and PSLF use 150% ($23,475 for a single person). Income below these thresholds results in a $0 monthly payment.
It depends on the forgiveness program. PSLF (Public Service Loan Forgiveness) is permanently tax-free under federal law. For IDR forgiveness (SAVE, PAYE, IBR, ICR), the forgiven amount was temporarily exempt from federal income tax through 2025 under the American Rescue Plan Act, but tax treatment for forgiveness occurring after 2025 is uncertain — borrowers may owe federal income tax on the forgiven amount, which can be substantial after 20–25 years of accrued balance. State income tax treatment varies by state.
Public Service Loan Forgiveness discharges remaining federal student loan debt after 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer. Qualifying employers include US federal, state, local, and tribal government entities, and non-profit organizations with 501(c)(3) status. Private sector employment, for-profit companies, and partisan political organizations do not qualify. Payments must be made under an IDR plan to count — standard 10-year payments do not benefit from PSLF because the loan would be paid off anyway.
Under PAYE, IBR, and ICR, if your IDR payment is less than the interest accruing each month, the unpaid interest is added to your loan balance — a phenomenon called negative amortization. Over time this can significantly increase the amount owed before forgiveness. The SAVE plan eliminates this problem: if your payment does not cover accrued interest, the government subsidizes the gap and your balance never grows. This is one of SAVE's most powerful features for low-income borrowers with large balances.
Larger family sizes raise the Federal Poverty Line threshold, which reduces your calculated discretionary income and lowers your monthly payment. Adding a dependent child or spouse to your family size can meaningfully change your payment. For example, for a single-person household at $55,000 income on SAVE (225% FPL threshold), the threshold is about $35,213 and discretionary income is $19,787. Adding one dependent raises the threshold to $47,588, dropping discretionary income to $7,412 and cutting the payment by more than half.
You must have eligible federal Direct Loans (or consolidate into the Direct Loan program) to access IDR plans. Private student loans do not qualify for any federal IDR plan or forgiveness program. PAYE is limited to borrowers who had no outstanding federal student loans before October 1, 2007, or who received a new Direct Loan after October 1, 2011. IBR and SAVE are more broadly available. You must recertify your income and family size annually to keep your IDR payment current — missing recertification causes your payment to jump to the standard 10-year amount temporarily.
If your income grows significantly over the repayment period, your IDR payments will increase and may eventually exceed the interest accrual, reducing your balance. If you pay off the full balance before the forgiveness date, no forgiveness occurs — you simply pay off the loan. The calculator models this: when the simulated balance reaches zero before the forgiveness term ends, it reports $0 forgiveness and shows the earlier payoff year. Some borrowers find their growing income eliminates both the forgiveness benefit and the low-payment benefit of IDR.
Refinancing federal student loans into private loans permanently removes your access to IDR plans, PSLF, and any federal forgiveness programs. If you have a high balance relative to income, are pursuing PSLF, or may need income-driven payments as a safety net, refinancing out of federal loans is generally a poor decision. Refinancing makes sense primarily when your income is high enough that IDR offers no payment advantage, you have no PSLF path, and a lower private rate would meaningfully reduce your total cost. Check your [Debt-to-Income Ratio](/debt-to-income-calculator/) before making this decision.
The calculator provides a projection based on constant income growth and standard IDR formulas — it is an estimate, not a guarantee. Actual forgiveness depends on annual income recertification, potential plan rule changes, future Congressional action, correct loan type eligibility, and consistent on-time payments. The estimate is most reliable over shorter time horizons (5–10 years) and becomes less precise over 20–25-year projections due to income uncertainty. Use the result for planning direction, not as a precise forecast.
Also known as
student loan forgiveness calculatorIDR calculatorPSLF calculatorincome driven repayment calculatorSAVE plan calculatorloan forgiveness estimator