At NerdWallet, we stick to strict standards of editorial integrity to help you decide with full confidence. Many or all the products featured listed here are from your partners. Here’s how we make money.
If you’re struggling to afford federal education loan payments, you might be able to lower them with an income-driven repayment schedule.?Your brand-new payment per month will be capped at 10%, 15% or 20% of your discretionary income, with respect to the plan. Make use of this calculator to estimate payments under income-based repayment and other?income-driven plans.
Income-based repayment calculator
What is discretionary income?
Discretionary income is how much money you’ve left after paying taxes and necessary expenses, like food and shelter. It doesn’t element in investment property on things like entertainment, shopping or any other non-essential purchases.
Discretionary income matters for federal student loans since the Education Department uses it to calculate payments for income-based repayment along with other income-driven plans. By comprising your necessities, discretionary income helps?figure out how much you could reasonably pay each month.?If yours is low enough, your payment may be reduced to $0 per month.
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 utilizes a standardized discretionary income definition to create things as fair as possible.
How is discretionary income calculated?
To calculate discretionary income for student loans, the Education Department:
- Finds the right federal poverty guideline for your location and family size.
- Multiplies that number by 1.5.
- Subtracts time out of your adjusted revenues.
Adjusted gross income may be the amount you have to pay taxes on. Its in your newest taxes online 37 if you filed Form 1040; Line 21 on 1040A; or Line 4 on Form 1040-EZ.
Other education loan calculators
Student loan refinance calculator: Compare your present loan payment or multiple payments with a refinanced student loan.
Student loan consolidation calculator: Compare your payments under federal debt consolidation plans together with your current bills.
Parent PLUS loans calculator: Estimate your monthly payments on?federal direct PLUS loans.
Daily student loan interest calculator: Estimate the quantity of interest that your loan accrues daily and between payment periods.
Weighted average interest rate calculator: Figure out what?the average rate on your current loans is.
Student finance calculator: Determine?the payment per month on new student education loans you are taking out, federal or private.
- Want to take action?
Compare income-driven repayment plans
- Want to dive deeper?
Discover 5 legit methods to find education loan help
- Want to understand more about related?
Learn about education loan forgiveness options