Discretionary Income Calculator

Background.

A discretionary income calculator computes the single number that determines your monthly bill on an income-driven federal student loan repayment plan: the portion of your income the government does not protect from loan payments. Discretionary income is defined, across every plan that uses it, as your Adjusted Gross Income minus a multiple of the HHS federal poverty guideline for your family size — the multiple and the payment percentage applied to the result are what actually differ from plan to plan. This page uses the 2026 HHS Poverty Guidelines, effective January 13, 2026, and models the three federal repayment plans that remain open on the discretionary-income formula as of this writing: Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR).

The income-driven repayment landscape changed substantially in 2026, and this calculator's scope reflects that directly. The SAVE plan — which had protected 225% of the poverty guideline, the most generous discretionary-income buffer ever offered — was blocked by federal courts and is being wound down; it is not offered as a selectable option here because presenting it as choosable would imply a live plan that no longer exists. In its place, the Repayment Assistance Plan (RAP) launched July 1, 2026 under the reconciliation law commonly known as the One Big Beautiful Bill Act. RAP does not use discretionary income at all — its monthly payment is a straight sliding-scale percentage of AGI, from 1% to 10%, rising by one percentage point for each additional $10,000 of AGI (with a flat $10 minimum payment for AGI at or below $10,000). Because RAP's formula is structurally different, it is out of scope for a discretionary-income calculator and is not modeled here.

What remains discretionary-income-based, and what this calculator does model, are IBR, PAYE, and ICR. IBR (for borrowers who took out their first federal loan on or after July 1, 2014, and PAYE) protect 150% of the poverty guideline and charge 10% of the resulting discretionary income annually; IBR for borrowers with an earlier first loan protects the same 150% but charges a higher 15%. ICR protects only 100% of the poverty guideline — the smallest buffer of the three — and charges 20% of discretionary income, though ICR borrowers' actual payment is capped at the lesser of that 20% calculation or what a fixed 12-year repayment plan adjusted for income would produce, a comparison this calculator does not attempt to replicate. Per the transition rules set out when RAP launched, IBR remains open indefinitely as a permanent statutory plan, while PAYE and ICR are both scheduled to close to further enrollment no later than July 1, 2028, at which point remaining borrowers in those two plans are transitioned to IBR or RAP.

HHS publishes three separate sets of poverty guidelines each year — one for the 48 contiguous states and DC, and separate, higher guidelines for Alaska and Hawaii that reflect their higher cost of living — and this calculator applies the correct set based on the state group you select. Enter your AGI, family size, state group, and repayment plan to see your poverty guideline, the protected income amount that guideline implies under your plan, your discretionary income, and an illustrative annual and monthly payment. This is an educational illustration of each plan's core formula, not a substitute for the certified calculation your loan servicer performs using your actual certified income documentation — always confirm your real payment amount at studentaid.gov or with your servicer directly. Reviewed on 2026-07-27.

What is discretionary income calculator?

Discretionary income, in the context of federal student loan repayment, is the portion of a borrower's Adjusted Gross Income that exceeds a specified multiple of the HHS federal poverty guideline for their family size and state of residence. It is the base figure that every income-driven repayment (IDR) plan applies its payment percentage to, in place of calculating a payment from the loan balance, interest rate, and a fixed term the way a standard repayment plan does. Two variables determine a given plan's discretionary-income result: the poverty-guideline multiple (how much income is protected before any payment is calculated) and the payment percentage (how much of the remaining, unprotected income is owed annually). Historically, plans have used a range of multiples from 100% (Income-Contingent Repayment, the least generous protection) up to 225% (the discontinued SAVE plan, the most generous protection ever offered), with 150% being the long-standing middle ground used by IBR and PAYE. The Repayment Assistance Plan that launched July 1, 2026 breaks from this discretionary-income framework entirely, calculating its payment as a direct percentage of gross AGI instead.

How to use this calculator.

1. 01Enter your Adjusted Gross Income (AGI) from Form 1040, line 11.
2. 02Enter your family size as defined by your loan servicer — generally you, your spouse if applicable, and your tax dependents.
3. 03Select your state group: 48 contiguous states plus DC, Alaska, or Hawaii. HHS publishes separate, higher poverty guidelines for Alaska and Hawaii.
4. 04Select your repayment plan: PAYE or new-borrower IBR (150%, 10%), original pre-2014 IBR (150%, 15%), or ICR (100%, 20%).
5. 05Read your 2026 poverty guideline, the protected income amount your plan implies, and your discretionary income.
6. 06Read the illustrative annual and monthly payment, then confirm your actual certified payment with your loan servicer or at studentaid.gov.

The formula.

Reviewed on 2026-07-27 against the 2026 HHS Poverty Guidelines (effective 2026-01-13) and current studentaid.gov plan descriptions. The calculator first looks up the 100% poverty guideline for the selected state group and family size: for the 48 contiguous states and DC, the base is $15,960 for a family of one, plus $5,680 for each additional family member; Alaska uses a base of $19,950 plus $7,100 per additional member; Hawaii uses a base of $18,360 plus $6,530 per additional member. That guideline is multiplied by the selected plan's protection multiple — 1.50 (150%) for PAYE and both IBR variants, or 1.00 (100%) for ICR — to produce the protected income amount. Discretionary income is AGI minus that protected amount, floored at zero so a borrower whose income is below the protected threshold is never shown a negative figure. The illustrative annual payment multiplies discretionary income by the plan's payment percentage: 10% for PAYE and new-borrower IBR, 15% for original pre-July-2014 IBR, or 20% for ICR — and the monthly figure divides that by 12. ICR borrowers' actual required payment is technically the lesser of this 20%-of-discretionary-income figure and what a fixed 12-year standard payment adjusted for income would produce; this calculator reports only the discretionary-income side of that comparison, since the alternate calculation depends on loan-specific amortization details outside this page's scope. SAVE is not modeled because it has been blocked in litigation and is being discontinued. RAP, which launched July 1, 2026, is not modeled because its payment is 1% to 10% of gross AGI directly — rising one percentage point per $10,000 of AGI, with a flat $10 minimum for AGI at or below $10,000 — with no discretionary-income calculation involved at all.

A worked example.

Frequently asked questions.

References& sources.

1. [1]U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (2026). Poverty Guidelines, effective January 13, 2026.
2. [2]Federal Student Aid, U.S. Department of Education — Income-Driven Repayment (IDR) Plans.
3. [3]Congressional Research Service — The Repayment Assistance Plan (RAP) in the FY2025 Reconciliation Law.