Student Loan Forgiveness Calculator 2026
Calculate IDR plan payments (IBR/PAYE/SAVE), forgiveness amount, and projected tax on forgiveness.
Under Income-Based Repayment (IBR), monthly payments are 10% of discretionary income. On $50,000 income with $60,000 in debt, your IBR payment is approximately $280/month — compared to $667 on standard repayment. After 20 years, remaining balance is forgiven (taxability depends on future legislation).
Monthly IDR Payment
$262.71
Total Paid Over 20 Years
$63,050.00
Amount Forgiven
$53,984.67
Est. Tax on Forgiveness
$11,876.63
Net Savings vs Standard
$0.00
IBR: 10% of discretionary income (≤2014 borrowers) or 10% (post-2014). Forgiveness after 20-25 years.
IBR: 10% of discretionary income (≤2014 borrowers) or 10% (post-2014). Forgiveness after 20-25 years.
About This Calculator
Income-driven repayment (IDR) plans adjust your monthly payment based on income and family size, not loan balance. There are four main federal IDR plans, each with different payment calculations and forgiveness timelines.
The SAVE plan (Saving on a Valuable Education), introduced in 2023, is the most generous: payments on undergraduate loans are capped at 5% of discretionary income (income above 225% of federal poverty line). Borrowers with original balances under $12,000 may qualify for forgiveness in as few as 10 years.
Public Service Loan Forgiveness (PSLF) offers tax-free forgiveness after 120 qualifying payments while employed full-time in public service. This is the most valuable forgiveness program: a physician earning $200K with $300K in med school debt who works for a qualifying hospital for 10 years can receive $250,000+ in tax-free forgiveness.
How to Use
- 1Enter your student loan balance and interest rate.
- 2Enter your current annual income and family size.
- 3Select your IDR plan (IBR, PAYE, SAVE) to see the monthly payment.
- 4Review how much interest accrues vs your payment — if payment is below interest, negative amortization occurs.
- 5See estimated forgiveness amount and timeline.
Formula & Methodology
IBR/PAYE Payment = 10% × (AGI − 150% of Federal Poverty Line) ÷ 12. SAVE Payment = 5% × (AGI − 225% of Poverty Line) ÷ 12 (for undergraduate loans). Poverty Line (2026, single): approximately $15,650. Forgiveness after 20 years (undergraduate) or 25 years (graduate) of qualifying payments.
Frequently Asked Questions
Is student loan forgiveness taxable?
It depends on the program: PSLF forgiveness is always tax-free. IDR forgiveness (after 20–25 years) was historically taxable as ordinary income, but the American Rescue Plan Act made IDR forgiveness tax-free through 2025. Future treatment is uncertain under pending legislation. State tax treatment varies independently of federal rules.
How do I qualify for PSLF?
PSLF requirements: (1) Direct federal loans (consolidate FFEL/Perkins first), (2) Full-time employment at qualifying employer (government or 501(c)(3)), (3) Enrolled in a qualifying IDR plan, (4) Make 120 qualifying monthly payments. Payments don't need to be consecutive. Submit annual Employment Certification Forms to track progress.
What happens if my IDR payment doesn't cover interest?
Under the SAVE plan, the government covers the difference between your monthly payment and accrued interest on subsidized loans, and 50% of the difference on unsubsidized loans. Under IBR and PAYE, unpaid interest capitalizes at certain events (consolidation, leaving the plan). Negative amortization means your balance grows even while making payments.
Sources & References
- Federal Student Aid — IDR Plans Comparison
- Federal Student Aid — SAVE Plan Details
- IRS — Canceled Debt and Insolvency
Last updated: 2026-04-12