What's the difference between PAYE, IBR, REPAYE, and SAVE plans?

SAVE (new 2024 plan) charges 5-10% of discretionary income based on loan type with the most generous forgiveness. PAYE charges 10% (20-year forgiveness), IBR charges 10-15% (20-25 year forgiveness), and REPAYE charged 10% (now replaced by SAVE). SAVE is typically the best option for most borrowers with its lower payments and faster forgiveness.

What income counts toward discretionary income calculations?

Your Adjusted Gross Income (AGI) from your federal tax return counts. This includes wages, self-employment income, investment income, and taxable retirement distributions. It does NOT include pre-tax 401(k) contributions, HSA contributions, or traditional IRA deductions—these reduce your AGI and therefore lower your payment.

Should I file taxes separately to lower student loan payments?

For IBR and PAYE, filing separately can dramatically lower payments if your spouse earns significantly more than you, but you'll pay higher taxes and lose many tax benefits (IRA deductions, education credits). SAVE and REPAYE count spousal income regardless. Run the numbers both ways—sometimes the tax penalty exceeds the loan payment savings.

How can I reduce my discretionary income to lower payments?

Maximize pre-tax deductions to lower your AGI: contribute to traditional 401(k)/IRA (not Roth), HSA, and FSA accounts. These reduce taxable income, which reduces AGI, which reduces discretionary income and your monthly payment. For self-employed borrowers, business expense deductions also help.

Discretionary Income Calculator

Calculate your discretionary income for federal student loan income-driven repayment (IDR) plans. Compare IBR, PAYE, REPAYE, and SAVE plan payments.

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Student Loans

Discretionary Income Calculator

Calculate your payment for Income-Driven Repayment (IDR) plans

Income Information

Adjusted Gross Income (AGI)(Form 1040, Line 11)

Filing Status

Family Size(You + spouse + dependents)

State of Residence(AK & HI have higher guidelines)

Loan Information

Total Federal Student Loan Balance

Repayment Plan

5% for undergraduate, 10% for graduate loans. 225% poverty line. Lowest payments. Forgiveness after 10-20 years.

Key Financial Terms

Understand the essential concepts behind this calculator

IBR Plan (Income-Based Repayment)

An income-driven repayment plan requiring 10-15% of discretionary income with forgiveness after 20-25 years, ideal for borrowers whose debt exceeds their income.

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ICR Plan (Income-Contingent Repayment)

The oldest income-driven plan with 20% discretionary income payments or a 12-year fixed amount, with forgiveness after 25 years—the only IDR option for Parent PLUS loans.

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Income Driven Repayment (IDR)

Federal student loan repayment plans that cap monthly payments at a percentage of your discretionary income, with potential loan forgiveness after 20-25 years.

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PAYE Plan (Pay As You Earn)

An income-driven repayment plan with 10% discretionary income payments, capped at the Standard amount, with forgiveness after 20 years for recent borrowers.

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View all financial terms in our glossary →

Frequently Asked Questions

Common questions about the Discretionary Income Calculator

Discretionary income is your Adjusted Gross Income (AGI) minus 150% of the federal poverty guideline for your family size and state. For example, if your AGI is $50,000 and 150% of poverty line is $20,000, your discretionary income is $30,000. IDR plans charge 10-20% of this amount annually (divided into 12 monthly payments).

🎓 Student Loan Data Sources

Federal Student Loan Interest Rates (2024-2025):

• Undergraduate Direct Loans: 6.53%
• Graduate Direct Unsubsidized: 8.08%
• Direct PLUS Loans: 9.08%
→ Source: Federal Student Aid - Interest Rates

Income-Driven Repayment Plans:

• SAVE Plan: 5% of discretionary income (undergraduate), 10% (graduate), 0% below 225% FPL
• PAYE Plan: 10% of discretionary income, capped at 10-year standard
• IBR Plan: 10-15% of discretionary income based on loan date
• ICR Plan: Lesser of 20% discretionary income or fixed 12-year payment
→ Source: Federal Student Aid - Income-Driven Repayment Plans

Public Service Loan Forgiveness (PSLF):

• Requires 120 qualifying monthly payments (10 years)
• Must work full-time for qualifying employer (government/non-profit)
• Remaining balance forgiven tax-free after 120 payments
→ Source: Federal Student Aid - PSLF Program

Average Student Loan Debt (Class of 2023):

• Bachelor's degree borrowers: $28,950 average debt
• Total outstanding student loan debt (U.S.): $1.75 trillion
• Average monthly payment: $200-$299 for most borrowers
→ Source: Education Data Initiative - Student Loan Debt Statistics

Refinancing Rates (2025):

• Private refinancing rates: 4.5% - 9.5% (varies by credit, term)
• Note: Refinancing federal loans means losing federal protections (IDR, PSLF, forbearance)
→ Source: CFPB - Student Loan Refinancing

Important: Student loan rules change frequently. Always verify current program requirements at StudentAid.gov before making decisions.

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⚠️ Important Disclaimer

This Discretionary Income Calculator provides estimates for educational and informational purposes only. Actual results may vary significantly based on individual circumstances, market conditions, regulatory changes, and other factors beyond the scope of this calculator.

The calculations and projections provided are based on assumptions and historical data that may not reflect future performance.Past performance does not guarantee future results.

This tool is not financial advice, tax advice, legal advice, or investment advice. For personalized guidance tailored to your specific situation, please consult with qualified professionals including:

Certified Financial Planner (CFP)
Certified Public Accountant (CPA) for tax matters
Licensed attorney for legal matters
Registered Investment Advisor (RIA) for investment decisions

Data Accuracy: All data sources, statistics, and rates were verified as accurate as of October 2025. Tax rates, market conditions, and other financial data change over time. Always verify current rates and consult official sources.

No Warranties: While we strive for accuracy, we make no warranties or guarantees regarding the accuracy, completeness, or reliability of any information provided. Use this tool at your own risk.