This calculator implements a proposal by Mark Kantrowitz for an extreme simplification of the federal need analysis methodology. It argues that if the loan repayment cap in the income-based repayment program is sufficient to evaluate ability to pay after a student graduates college, it should also be sufficient to evaluate ability to pay during the student's college career.

The College Cost Reduction and Access Act of 2007 (P.L. 110-84) established a new income-based repayment program for federal education loans. This repayment program caps the monthly payment at 15% of discretionary income, where discretionary income is defined as the amount by which AGI exceeds 150% of the poverty line. This is somewhat more generous than income-contingent repayment, which caps the monthly payment at 20% of discretionary income, where discretionary income is defined as the amount by which AGI exceeds 100% of the poverty line.

This is the policy version of the calculator, which allows student aid policy advocates to experiment with different percentages of discretionary income and different definitions of discretionary income. The non-policy version of the calculator is based on the IBR formula, but with the ability to pay divided by the number of children in college.

Please note that this calculator implements an experimental proposal for an alternate need analysis formula. The results are not official and may differ significantly from the actual EFC figures. Actual EFC figures can be calculated using FinAid's Financial Aid Estimation Form, which implements the Federal Need Analysis Methodology.