Student Loan Forgiveness Calculator
Estimate your savings from Public Service Loan Forgiveness (PSLF) or income-driven repayment forgiveness.
Compare repayment strategies.
Student loan forgiveness programs cancel part or all of your remaining loan balance after you meet specific requirements. The two main paths are Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) forgiveness.
Public Service Loan Forgiveness (PSLF): After making 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer (federal, state, or local government, or a 501(c)(3) nonprofit), the remaining balance is forgiven completely tax-free.
Income-Driven Repayment (IDR) Forgiveness: After 20 or 25 years of income-driven payments (depending on your plan), any remaining balance is forgiven. However, the forgiven amount may be treated as taxable income, creating a potential “tax bomb.”
How IDR payments are calculated:
Monthly Payment = (AGI - 150% of Poverty Line) × Payment Percentage / 12
Where:
- AGI = your Adjusted Gross Income
- Poverty Line = the federal poverty guideline for your family size (e.g., $15,060 for a single person in the continental US, plus $5,380 per additional family member)
- Payment Percentage = 10% for SAVE/PAYE plans, 15% for IBR
IDR Plan Comparison:
| Plan | Payment Rate | Forgiveness Timeline |
|---|---|---|
| SAVE/REPAYE | 10% of discretionary income | 20-25 years |
| PAYE | 10% of discretionary income | 20 years |
| IBR | 15% of discretionary income | 25 years |
Practical Example: Loan balance: $80,000 at 6% interest. Income: $50,000. Family size: 1. Poverty line: $15,060. 150% = $22,590. Discretionary income: $50,000 - $22,590 = $27,410. Monthly SAVE payment: $27,410 x 10% / 12 = $228/month Standard 10-year payment would be about $889/month — so IDR saves $661/month but stretches the repayment period.
Key question: Will you pay less total through forgiveness (payments plus any tax on the forgiven amount) than by paying off the loan under the standard 10-year plan?
Tips:
- PSLF forgiveness is tax-free, making it significantly more valuable than IDR forgiveness
- Submit your PSLF Employment Certification Form annually to track qualifying payments
- File taxes as “married filing separately” if your spouse’s income would increase your IDR payment significantly
- IDR forgiveness tax treatment may change — through 2025, forgiven student loans are temporarily tax-free under the American Rescue Plan Act