How to Use the Income-Driven Repayment (IDR) Calculator
Income-Driven Repayment (IDR) plans, such as the SAVE plan, set your federal student loan payment based on your income and family size rather than your loan balance. The calculation starts with your discretionary income — the amount of your Adjusted Gross Income (AGI) above 225% of the federal poverty line for your family size — and applies a percentage rate to it.
Borrowers with only undergraduate loans typically pay 10% of discretionary income, while those with any graduate loans generally see a lower blended rate around 5-10% depending on the specific mix of loans. If your AGI falls below the 225% threshold, your discretionary income is $0 and your required monthly payment drops to $0 — you stay in good standing, and depending on the plan, some or all of the unpaid interest may be subsidized.
These figures use 2024 federal poverty guidelines for the 48 contiguous states as an estimate; guidelines are updated annually and differ for Alaska and Hawaii, so check the current numbers on StudentAid.gov before making repayment decisions.
Frequently Asked Questions
IDR plans like SAVE set your payment based on a percentage of your discretionary income, income above a poverty-line threshold, rather than your loan balance, so your payment can be $0 if your income is low enough.
Under the SAVE plan, borrowers with only undergraduate loans typically pay 10% of discretionary income, while those with any graduate loans generally pay a blended rate closer to 5-10% depending on the loan mix.
If your AGI is below 225% of the poverty line for your family size, your discretionary income is $0 and your required monthly payment is $0, though interest may still be subsidized depending on the plan.