Student Loan Repayment Plan Comparison (Standard / IBR / PAYE / SAVE)
Live- Income-driven plans forgive remaining balance at 20 or 25 years; forgiven amount may be taxable depending on the program and tax-year rules. Public Service Loan Forgiveness (PSLF) provides tax-free forgiveness after 120 qualifying payments and is not modelled here.
Federal student loan borrowers in the US have multiple repayment plans to choose from, and the right plan depends on income, family size, and tolerance for paying interest over a longer period in exchange for lower monthly payments. The Standard 10-year plan is the default and pays the loan off fastest but has the highest monthly payment. Income-driven plans (IBR, PAYE, SAVE) base the monthly payment on a percentage of discretionary income (income above 150 or 225 percent of the federal poverty line) and forgive any remaining balance after 20 or 25 years.
This calculator takes your loan balance, interest rate, adjusted gross income, and family size, and returns the monthly payment under each of the five plans. The federal poverty line for a single-person household in 2025 is $15,650, with an additional $5,500 per family member; the calculator applies this scaling automatically.
A rough sanity check: a $35,000 balance at 6.5 percent with $55,000 AGI and a single-person household pays about $397 per month on the Standard 10-year plan, $497 per month under IBR (15 percent of discretionary income above 150 percent FPL), $331 per month under PAYE (10 percent), and $182 per month under SAVE (10 percent above 225 percent FPL). The Standard plan pays the loan off in 10 years; income-driven plans forgive the balance after 20 or 25 years if not paid off earlier.
The SAVE plan has been in legal flux since 2024 due to ongoing litigation; the 10-percent-of-discretionary-income formula above 225 percent FPL is the version that was in effect during the calculator's tax-year window. Borrowers should check Studentaid.gov for the current SAVE status and any program-eligibility changes. PSLF (Public Service Loan Forgiveness) for borrowers in qualifying public-sector jobs provides tax-free forgiveness after 120 qualifying payments and is not modelled here.
How the income-driven plans differ
The three income-driven repayment plans all base your monthly payment on a percentage of discretionary income (income above some multiple of the federal poverty line), but the formulas differ in three ways: the percentage, the FPL multiplier, and the forgiveness period.
IBR (Income-Based Repayment) takes 15 percent of discretionary income above 150 percent FPL. Forgiveness comes after 25 years (300 monthly payments). IBR is the oldest income-driven plan and is available to borrowers with eligible Direct Loans and Federal Family Education Loans.
PAYE (Pay As You Earn) takes 10 percent of discretionary income above 150 percent FPL. Forgiveness comes after 20 years (240 payments). PAYE is restricted to borrowers who took out their first loan after 1 October 2007 and have at least one Direct Loan disbursed after 1 October 2011.
SAVE (Saving on a Valuable Education) is the successor to REPAYE. It takes 10 percent of discretionary income above 225 percent FPL, with forgiveness after 20 years for undergraduate loans (25 years for graduate). The 225 percent FPL threshold (instead of 150) is the most generous in the income-driven plan landscape; for many low-to-middle-income borrowers the SAVE monthly payment is roughly half of the PAYE payment on the same income. SAVE has been subject to litigation since 2024; check current status before relying on the figures.
When the Standard plan is best
The Standard 10-year plan is best for borrowers whose discretionary income is high enough that the income-driven plan would still require a payment close to (or higher than) the Standard payment. In that case, the Standard plan pays off the loan in 10 years with the least total interest paid; income-driven plans drag the loan out longer and incur more interest even though the monthly payment may be lower.
A fast rule of thumb: if the income-driven payment is 80 percent or more of the Standard payment, Standard is usually the better choice. Below 80 percent, the income-driven plan may make sense if cash flow is a real constraint or if forgiveness is realistic given career trajectory.
PSLF and tax-bomb considerations
Two special cases sit alongside the income-driven plans. Public Service Loan Forgiveness gives tax-free forgiveness to borrowers in qualifying public-sector jobs (government, 501(c)(3) nonprofits) after 120 qualifying monthly payments. The 120 payments do not need to be consecutive but must be made under an income-driven plan. If you are eligible for PSLF and intend to pursue it, the right strategy is usually to minimise monthly payments under SAVE (or PAYE) for 10 years until forgiveness kicks in.
The tax bomb is the income-tax owed when a forgiven loan balance is included as ordinary income at the end of the 20 or 25 year forgiveness period. PSLF forgiveness is tax-free; IBR, PAYE, and SAVE forgiveness is technically taxable under IRC Section 61, though the American Rescue Plan Act temporarily made it tax-free through 2025. Beyond 2025 the tax-bomb risk returns unless Congress extends the relief.
Refinancing into private loans
A fourth option not modelled here is refinancing federal loans into private loans, typically at lower rates for borrowers with strong credit. The trade-off is losing access to all federal repayment plans (Standard, Extended, income-driven, PSLF) permanently. Refinancing is appropriate for high-income, high-credit borrowers who will not use income-driven plans or PSLF; it is the wrong choice for borrowers who might rely on those programs.
Private refinancing rates as of 2025 typically run 5 to 8 percent for fixed-rate loans, depending on credit profile. For a 6.5 percent federal loan, a high-credit borrower might save 1 to 2 percentage points by refinancing, but loses optionality on income-driven plans and PSLF.
What this calculator does not include
Loan capitalization (when interest accrues during deferment and gets added to principal). Negative amortization scenarios in income-driven plans (where the monthly payment is below the monthly interest accrual). The SAVE plan's exclusion of unpaid interest from monthly balance growth (a borrower-friendly feature unique to SAVE). PSLF eligibility verification or qualifying-payment tracking. The tax bomb on forgiven balances. Marriage and joint vs separate filing effects on income-driven payments. State-specific repayment assistance programs. Private student loan options. Refinancing scenarios. For comprehensive student-loan planning, use Studentaid.gov's official loan simulator alongside this calculator.
Frequently asked questions
It depends on income and balance. The Standard 10-year plan minimises total interest paid but has the highest monthly payment. Income-driven plans (IBR, PAYE, SAVE) lower the monthly payment but may extend the loan and result in more total interest, with forgiveness after 20 to 25 years. SAVE is typically the cheapest monthly payment for most borrowers due to its 225 percent FPL threshold and 10 percent rate.
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