Discretionary Income Calculator for IDR Plans
Use our discretionary income calculator to determine your monthly student loan payments on income-driven repayment plans.
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If you’re struggling to afford federal student loan payments, you may be able to lower them with an income-driven repayment plan. These plans cap monthly payments at 10%, 15% or 20% of your discretionary income, depending on the plan. Your eligibility depends on the type of federal loan you have.
Use the discretionary income calculator below to estimate payments for income-driven repayment plans.
Income-based repayment calculator
What is discretionary income?
The Education Department currently uses discretionary income to calculate payments for income-based repayment and other income-driven plans. Its calculation aims to factor out income used to cover essentials and instead base monthly payments on income left for “discretionary” items. The formula doesn't specifically track your personal expenses like rent and groceries; rather, it considers family size, state of residence and federal poverty guidelines.
If your discretionary income is low enough, your monthly payment may be $0.
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How is discretionary income calculated?
To calculate discretionary income for most student loan repayment plans:
Find the federal poverty guideline for your location and family size.
Multiply that number by 150% for Income-Based Repayment and Pay as You Earn plans, or 100% for the Income-Contingent Repayment plan.
Subtract that number from your adjusted gross income to get your discretionary income.
Monthly payment amounts under PAYE are generally 10% of your discretionary income, 15% under IBR and 20% for ICR.
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.
A new student loan repayment plan?
Changes to income-driven repayment plans loom ahead of a U.S. Senate vote on President Donald Trump’s “one big, beautiful bill,” which includes a new Repayment Assistance Plan (RAP) for student loan borrowers. This plan is an income-based repayment plan that uses gross income — rather than discretionary income — to calculate payments. We're following the bill's progress and will update this story as it develops.
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