Income-Based Repayment Calculator: IBR, PAYE, and SAVE Plans Explained

Navigating federal student loan repayment can feel overwhelming, especially when acronyms like IBR, PAYE, and SAVE all promise lower payments. This guide cuts through the confusion, shows you exactly how to calculate your payment, and helps you decide which plan puts the most money back in your pocket.

Use our Student Loan Calculator to model your specific loan balance and income scenario.

What Is Income-Driven Repayment?

Income-driven repayment (IDR) plans cap your monthly student loan payment as a percentage of your discretionary income — the gap between your adjusted gross income and a poverty line multiplier. After 20 or 25 years of qualifying payments, any remaining balance is forgiven.

The four main plans are IBR, PAYE, ICR, and SAVE. The right choice depends on when you borrowed, your loan type, and your income trajectory.

How Discretionary Income Is Calculated

Every IDR plan starts with the same formula:

Discretionary Income = AGI − (Poverty Guideline × Plan Multiplier)

For 2026, the federal poverty guideline for a single person is approximately $15,060. Plans use 150% or 225% of that figure as the floor, meaning income below that threshold is protected entirely.

Plan	Poverty Multiplier	Payment Rate	Forgiveness
IBR (new borrowers)	150%	10% of discretionary	20 years
IBR (old borrowers)	150%	15% of discretionary	25 years
PAYE	150%	10% of discretionary	20 years
SAVE (undergraduate)	225%	5% of discretionary	20–25 years
SAVE (graduate)	225%	10% of discretionary	25 years

Payment Examples by Income Level

Single borrower, no dependents, $50,000 loan balance

At $40,000 annual income (AGI):

• IBR/PAYE: ($40,000 − $22,590) × 10% ÷ 12 = $145/month
• SAVE (undergrad): ($40,000 − $33,885) × 5% ÷ 12 = $25/month
• Standard 10-year payment: approximately $530/month

At $60,000 annual income:

• IBR/PAYE: ($60,000 − $22,590) × 10% ÷ 12 = $312/month
• SAVE (undergrad): ($60,000 − $33,885) × 5% ÷ 12 = $109/month
• Standard 10-year payment: approximately $530/month

At $80,000 annual income:

• IBR/PAYE: ($80,000 − $22,590) × 10% ÷ 12 = $478/month
• SAVE (undergrad): ($80,000 − $33,885) × 5% ÷ 12 = $192/month
• Standard 10-year payment: approximately $530/month

At $80K income, IBR nearly matches the standard payment — meaning IBR offers little advantage unless your balance is much larger or your income is expected to grow.

Which Plan Should You Choose?

Choose SAVE if:

• You have primarily undergraduate loans
• Your income is low relative to your debt
• You want the interest subsidy that prevents balance growth

Choose PAYE if:

• You took out loans after October 1, 2007 and have Direct Loans only
• You want a payment cap (never exceeds the 10-year standard amount)
• You might have a high income later in your career

Choose IBR if:

• You have FFEL loans that don’t qualify for PAYE or SAVE
• You borrowed before 2007 and need flexibility

Public Service Loan Forgiveness (PSLF) and IDR

If you work for a government agency or qualifying nonprofit, PSLF forgives your remaining balance after just 120 qualifying payments (10 years) — completely tax-free. Pairing an IDR plan with PSLF is the most powerful strategy for borrowers with high debt and public-sector careers.

Use our Student Loan Calculator to compare total lifetime cost under each scenario.

The Forgiveness Timeline

Under IBR and PAYE, any remaining balance after 20 years (undergraduate) or 25 years (graduate, or old IBR) is canceled. However, that forgiven amount is currently treated as taxable income. On a $70,000 forgiveness, you might owe $15,000–$20,000 in taxes in year 20. Many financial planners recommend setting aside money in a taxable investment account each year to prepare.

Recertification: The Annual Requirement You Cannot Miss

Every year you must submit updated income and family size documentation. If you miss this deadline:

1. Your payment temporarily resets to the standard 10-year amount
2. Unpaid interest may capitalize (get added to your principal)
3. Your forgiveness clock does not reset, but the payment spike hurts your cash flow

Set a reminder 90 days before your anniversary date and recertify online at studentaid.gov.

Bottom Line

SAVE currently offers the lowest payments for most borrowers with undergraduate debt. IBR remains the fallback for older loans. Always run the numbers with our Student Loan Calculator and compare total lifetime payments — not just the monthly figure — before committing to a plan.