Student loan income based repayment married calculator

Income-Based Repayment Plan Calculator

Try Our Free IBR Calculator!

Life happens, and sometimes you need to choose between paying rent or your unaffordable monthly student loan bill. With our free income-based repayment plan calculator, you can see if you are eligible for a lower monthly payment. Your new monthly payment will be dependent on factors such as income and family size, as well as life changes.

Fill out your information in the income-based repayment plan calculator below to see what your federal student loan payments could be.

Personal Info

Adjusted gross income Enter the amount of your total taxable income, which is what is recorded on IRS Form 1040, 1040A, or 1040EZ.

$

Family size Enter the amount of family members including yourself, your spouse, and your children who will be at supported by you.

State of residence

Annual income growth Enter your best estimate of the percentage your income will grow. Typically, this is an average of 3.5%, but The Department of Education has a 5% baseline.

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Loan Info

Were any of your federal student loans disbursed before July, 2014? “New borrowers” (post-July 2014) have decreased forgiveness term at 20 years and monthly payment amount at 10% if your income.

Total federal student loan balance

$

Avg. weighted interest rate Multiply each of your loan’s total amount owed by the corresponding interest rate. Add these together, then divide by the total amount owed.

%

Current monthly payment Your current monthly payment is dependent on what you entered in your Total Federal Student Loan Balance.

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OriginalIBRSavings
First month’s payment $383 $129 $254
Last month’s payment $383 $383 $0
Total balance paid $45,960 $68,857 $22,897
Total forgiveness $0 $10,688 $10,688
Repayment term ~10 years ~25 years ~15 years
   

Your results are in! You would have a monthly payment* of $85 on IBR, a difference of $298 from your current payment. Make note that your payments may increase if you earn more income in the future. Let’s assume with an annual income growth of 3.5%, you would have a final monthly payment amount* of $317. Fast-forward ~25 years of making payments: Your total amount paid would be $56,054 with $26,206 received in forgiveness. Compare this to your current plan, in which you would pay $45,960 over the next ~10 years.

*Monthly payment amounts presented here are estimates only and are based on several assumptions that may not apply to you. To discuss actual monthly payment amounts, contact your loan servicer or student loan professional.

Ready to apply for IBR, Call Now!

The easiest way to estimate your monthly repayments is to use our loan simulator tool below.

Generally, your monthly payments under Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) are calculated as 10% or 15% of your "discretionary income", which is your income minus 150% of the poverty level for your family size and state. If you earn below 150% of the poverty level, your required loan payment will be $0. If you earn more, your loan payment will be 10% or 15% of whatever you earn above that amount.

I know its a bit complex but its worth getting your head around. I recommend again you use the loan simulator to help.


Note about changes due to COVID-19:

There have been changes to the federal student loan program as a part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that passed in Congress on March 27, 2020, to help those affected by the Coronavirus.

Until December 31, 2022, borrowers have the option to suspend payments without penalty, if needed. If you are pursuing forgiveness through an income-driven repayment plan, skipped payments will still count towards the time required to be eligible.

You can learn more in our federal student loans guide.


How to Use This Student Loan Income-Based Repayment Calculator

With the IBR calculator above, you simply enter your information to calculate what your new payment will be and the total loan cost. This includes your state of residence, your family size, and 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 information about when your federal student loans were disbursed, the current balance of those loans, and the average interest rate across all loans. You can gather all of these details from your current student loan servicer.

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. This assumes a growth rate on income of 3.5%, an average weighted interest rate of 6.5%, and disbursement of loans that took place before 2014. Lowering the borrower’s current payment of $561 down to $399 can help improve their monthly cash flow.

Pros & Cons of IBR

Pros

  • 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.
  • There is the potential for loan forgiveness on any remaining balance after 20 or 25 years of payments.


Cons

  • 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.
  • 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).
  • Borrowers who utilize IBR may not be paying 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

Bottom Line

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, be sure to consider how it compares to your current repayment plan and its pros and cons. Also, be sure to look into the other income-driven repayment plans such as Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR).

>> Read More: Check out our other student loan calculators

How is income based repayment calculated when married?

If you file taxes jointly with your spouse or choose the Revised Pay As You Earn Plan (REPAYE), your joint income will be used to calculate your income-driven payment amount. Any time a joint income is used, your payment is prorated if your spouse also has federal student loan debt.

Does my spouse's income count for student loan repayment?

The laws and regulations for income-driven repayment (IDR) plans require payments to be calculated based on a combined household income, including your spouse's income if you are married.

How does IBR work for married couples?

If you are married and both you and your spouse have student loans, the IBR formula considers you and your spouse's joint federal student loan debt as well as your joint income if you file taxes jointly.

Does IBR take into spouse income?

In conclusion, if you choose PAYE, IBR, or ICR and file a joint income tax return with your spouse—or if you choose REPAYE (regardless of whether you file jointly or separately)—we will use your combined income to calculate your IDR payment.