Income-Based Repayment (IBR) Calculator

Personal Information

State of Residence

Family Size

Income Information

Adjusted Gross Income

Annual Income Growth

Income Information

Were any of your federal student loans disbursed before July, 2014?

Yes

Current Federal Student Loan Balance

Average Weighted Interest Rate on Federal Loans

Calculator Results

	Current	IBR	Savings
First Month's Payment
Last Month's Payment
Total Forgiveness	$0
Total Cost

Switching to IBR would lower your current monthly student loan payment to , which is lower than your current payment. As your income increases, so will your monthly payments under IBR. Assuming annual income growth of , your last monthly payment would be , which is lower than your current payment. Overall, you would receive in student loan forgiveness by switching to IBR. However, switching to IBR would increase the total cost of your loan by .

How to use this student loan income-based repayment calculator

Here’s how to use the IBR calculator above.

1. Enter your information

To calculate your new payment and total loan cost, provide the following information:

State of residence
Family size
Details about your adjusted gross income and anticipated growth rate of your income, if known. An estimate for income may also be used, but it is important to note that the calculator results are based heavily on these inputs.

You will also need to provide:

When your federal student loans were disbursed
The current balance of those loans
The average interest rate across all loans

You can gather all of these details from your current student loan servicer.

2. Compare your new IBR payment to your current plan

Once you’ve completed the data entry, the calculator populates your new potential IBR payment. You will also see how that compares to your current plan and any savings you may see when making the switch.

The calculator also generates how much more you will pay on your loans by switching to an income-based option, as well as the potential amount of forgiveness, should you qualify in the future.

Each of these details should drive your decision on whether or not to pursue income-based repayment for your federal student loans.

What is the income-based repayment plan?

When graduation comes, repaying a substantial amount of student loan debt can feel like a burden. Some students find it difficult to find a job that pays a high enough salary right out of college to cover the required payments, particularly with the standard repayment plan of 10 years for federal student loans.

Fortunately, there are several income-driven repayment plans available that limit required monthly payments based on borrowers’ income, helping them avoid default.

The Income-Based Repayment Plan, also known as IBR, is one of the most common programs available for borrowers with federal student loan debt.

How IBR works

The plan allows student loan borrowers to cap their monthly student loan payments at 10% of their discretionary income. For borrowers who already had federal student loans prior to July 1, 2014, monthly payments under IBR are capped at 15% of discretionary income.

In either case, the payment cannot be more than what the minimum payment would be under the standard 10-year repayment plan. Additionally, borrowers are able to lower their monthly payments because the repayment term is extended well beyond the standard 10-year plan.

You may have 20 or 25 years to repay your loans under IBR, and the remaining loan balance is forgiven at that time, so long as you remain on-time with your payments throughout the plan.

Although switching to the IBR Plan is not a fool-proof method for staying on track with student loan payments, the move does help borrowers who are struggling to keep up with higher monthly loan minimums. You can stay on IBR for as long as you want.

An example

Using the calculator above, we can see how the Income-Based Repayment Plan can help a borrower who needs some relief from monthly student loan payments.

An individual who is a Washington, D.C. resident with a one-member family, adjusted gross income of $50,000, and $50,000 in student loan debt could reduce their monthly payment by $162 with IBR, lowering the borrower’s current payment of $561 down to $399 can help improve their monthly cash flow.

Factor	Details
Family size	1
Adjusted gross income	$50,000
Student loan debt	$50,000
Income growth rate	3.5%
Average weighted interest rate	6.5%
Loan disbursement date	Before 2014
Current monthly payment	$561
New monthly payment with IBR	$399
Monthly payment reduction	$162

Pros & cons of IBR

Pros

Avoid default

Monthly payments are calculated based on your discretionary income, so borrowers who cannot afford their monthly loan payments do not have to pay or can pay very little without defaulting.
Forgiveness eligibility

The potential for loan forgiveness on any remaining balance after 20 or 25 years of payments.

Cons

Higher overall cost

In most cases, the total cost of borrowing is higher under IBR plans because the repayment term is extended and more interest accrues over time.
Must recertify income annually

As your income rises, so may your student loan payments under an IBR Plan. Borrowers must recertify their income based on tax returns each year, and if there is a jump in pay, monthly payments under IBR can be high (though no higher than they would be under the standard plan).
Forgiven balance is taxable

Borrowers who utilize IBR may not pay off any of the principal on their loan balances. This could lead to a substantial amount forgiven in the future, but this is a taxable event for most borrowers.

Is IBR right for you?

The Department of Education offers the Income-Based Repayment Plan to borrowers who are in good standing with their federal student loans. The plans are meant to provide some respite for borrowers who have a low income, a high student loan balance, or a combination of the two.

While IBR can lower your monthly payment initially, the total cost of repayment increase given the minimal principal payments and extended repayment term as compared to the Standard 10-Year Repayment term (you can check your payments and total interest costs on that plan with our Student Loan Payment Calculator).

Borrowers need to consider their potential to earn more in the future, and how higher income will impact their IBR Plan.

Overall, income-based repayment helps those who need some assistance staying current with their student loan payments. Before making the decision to move to IBR, consider how it compares to your current repayment plan and look into other income-driven repayment plans such as:

Check out our other student loan calculators