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This Income-Based Repayment Calculator implements the improved version of income-based repayment as enacted by the Health Care and Education Reconciliation Act of 2010 on March 30, 2010. The legislation cut the monthly loan payments under income-based repayment by one third from 15% of discretionary income to 10% of discretionary income and accelerated loan forgiveness from 25 years to 20 years. Only new borrowers of new loans made on or after July 1, 2014 are eligible for the improved income-based repayment plan. (President Obama announced a proposal in October 2011 to make the new income-based repayment plan available two years earlier. The new income-based repayment plan most likely will be available starting July 1, 2013 to borrowers who have at least one federal student loan in FY2012 or a later year and no loans prior to FY2008.) Current borrowers are eligible for the existing 15% version of the income-based repayment plan. Please use the 15% version of the income-based repayment calculator for borrowers who do not qualify for the 10% version of the income-based repayment plan.

This calculator compares the cost of repaying Federal student loans using the Income-Based Repayment (IBR) option and the standard repayment option, including the net present value of those payments.

The Income-Based Repayment option was proposed as part of the College Cost Reduction and Access Act of 2007 and became available on July 1, 2009.

Please click on the field names for help in using this calculator. For more information about discount rates, see also the discussion of net present value.

A married borrower who files a separate federal income tax return should include only his or her own loans. Public Law 110-153 modified the treatment of income for married borrowers who file separate federal income tax returns. Accordingly, this calculator will include the spouse's income only when the borrower files as married filing jointly.

Community property states generally attribute half of the earnings of a married couple to each spouse, so in those states, the AGI on the tax return of a married borrower who files a separate tax return will usually include half of the couple's combined earnings, plus any other separate income of the borrower. Therefore, depending on the spouse's earnings, the borrower's AGI on a separate return could be higher or lower than the borrower's own earnings.