Calculate Your Discretionary Income for IDR Plans

If you’re struggling to afford federal student loan payments, you may be able to lower them with an income-driven repayment plan. Your new monthly payment will be capped at 5%, 10%, 15% or 20% of your discretionary income, depending on the plan. Your eligibility will depend on the type of federal loan you have.

Use the top calculator to estimate payments under existing income-driven repayment plans.

To calculate payments under the Education Department's newest income-driven replacement plan, dubbed SAVE, use the second calculator. The new plan caps repayment of your discretionary income at 5% — starting July 2024 for undergraduate borrowers. SAVE also redefines discretionary income.

» MORE: Who should get on ‘SAVE’, the new student loan IDR Plan?

This new payment plan uses 225% of the poverty line for your family size in payment calculations instead of 150% — leading to lower discretionary income and monthly payments.

Income-based repayment calculator for existing plans

Source: Health and Human Services Federal Poverty Guidelines for 2023

New income-driven repayment plan calculator

Source: Health and Human Services Federal Poverty Guidelines for 2023

Discretionary income explained

Discretionary income matters for federal student loans because the Education Department uses it to calculate payments for income-based repayment and other income-driven plans. By accounting for your necessities, discretionary income helps determine how much you could reasonably pay each month. If yours is low enough, your payment may be reduced to $0 a month.

» MORE: How to submit an income-driven repayment application

Of course, people have different needs — or things they consider needs. The government isn’t going to have borrowers submit receipts and defend their spending choices. Instead, it uses a standardized discretionary income definition to make things as fair as possible.

How is discretionary income calculated?

To calculate discretionary income for most student loan repayment plans, the Education Department:

• Finds the correct federal poverty guideline for your location and family size.

• Multiplies that number by 1.5.

• Subtracts that number from your adjusted gross income.

Income-Contingent Repayment, which sets payments at 20% of discretionary income, uses 100% of the poverty line instead of 150%.

Adjusted gross income is the amount you pay taxes on. You’ll find it on your most recent tax return on Line 11 if you filed Form 1040; or Line 1 on 1040-ES.

» MORE: What happens to student loans when you get married?

Other student loan calculators

Student loan refinance calculator: Compare your current loan payment or multiple payments with a refinanced student loan.

Student loan consolidation calculator: Compare your payments under federal loan consolidation plans with your current bills.

Parent PLUS loans calculator: Estimate your monthly payments on federal direct PLUS loans.

Daily student loan interest calculator: Estimate the amount of interest that your loan accrues daily and between payment periods.

Weighted average interest rate calculator: Determine what the average rate on your current loans is.

Student loan calculator: Determine the monthly payment on new student loans you take out, federal or private.