Student loan forgiveness calculator Estimate how much of your student loan balance will be forgiven under an income-driven repayment (IDR) plan, how much you'll pay in total, and track your projected balance over time.
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Enter values Provide balance, monthly payment, rate, and IDR term above to estimate your loan forgiveness.
Income-driven repayment forgiveness and total cost projection
A student loan forgiveness calculator estimates how much of your federal student loan balance will be forgiven at the end of an income-driven repayment (IDR) plan. It simulates monthly payments against accruing interest over your repayment term to show the remaining balance that gets discharged, the total amount you will actually pay, and how your balance changes year by year.
How the forgiveness simulation works
Each month, the calculator applies one month of interest to your outstanding balance (annual rate divided by 12), then subtracts your monthly IDR payment. If the payment is less than the interest charge, your balance grows — this is called negative amortization and is common on IDR plans where payments are tied to income rather than the loan amount.
This cycle repeats for the full IDR term (typically 20 or 25 years). Whatever balance remains at the end is the projected forgiven amount. If your payments are large enough to pay off the loan before the term ends, forgiveness is zero and you will have repaid the debt in full.
Balance(m) = Balance(m-1) × (1 + r/12) − Payment
Each month's ending balance equals the prior balance plus one month of interest, minus the IDR payment. The forgiven amount is max(0, Balance at final month).
Income-driven repayment plan types
Federal student loans offer several IDR plans, each with different payment formulas and forgiveness timelines. The SAVE plan (formerly REPAYE) caps payments at 5–10% of discretionary income with forgiveness after 20–25 years. ICR, IBR, and PAYE have similar structures with varying income percentages and term lengths.
The key variable across all plans is your monthly payment amount relative to the interest that accrues. When payments don't cover the monthly interest, your balance grows over time even though you are making payments — and the forgiven amount at the end will be larger than your original loan.
Public Service Loan Forgiveness (PSLF)
Borrowers working full-time for qualifying government or nonprofit employers may be eligible for PSLF after 120 qualifying payments (10 years) instead of 20–25 years. PSLF forgiveness is tax-free at the federal level, which is a significant advantage over standard IDR forgiveness.
To model PSLF, set the IDR term to 10 years. The forgiven amount shown is what would be discharged after 120 payments. Because the repayment window is shorter, the forgiven amount under PSLF is typically much larger than under a 20- or 25-year IDR plan.
The tax implications of forgiveness
Under current law, IDR forgiveness (non-PSLF) is treated as taxable income in the year it is discharged. This means if $60,000 is forgiven, you may owe federal and state income tax on that amount — sometimes called the 'tax bomb.' The American Rescue Plan Act temporarily exempted forgiven student loan amounts from federal tax through 2025, but this provision is set to expire.
Planning for the tax impact is an important part of evaluating whether IDR forgiveness is financially beneficial. Compare the total of your IDR payments plus the estimated tax on forgiveness against what you would pay under a standard 10-year repayment plan.
Negative amortization and balance growth
When your IDR payment is less than the monthly interest charge, the unpaid interest gets added to your principal balance. Over a 20-year term, it is common for borrowers to owe more than their original loan amount even after making every payment on time.
The balance-over-time chart in this calculator visualizes this effect. A rising red line means your balance is growing due to negative amortization. The green line shows cumulative payments increasing steadily. Where the two lines diverge most is where forgiveness provides the greatest financial relief.
Limitations and assumptions
This calculator uses a fixed monthly payment and fixed interest rate for the entire term. In reality, IDR payments are recertified annually and change as your income changes. Interest rates on federal loans are fixed at origination but borrowers with multiple loans may have different rates across them.
The calculator does not account for deferment, forbearance, or periods of non-payment. It also does not model the tax liability on forgiven amounts. For a comprehensive repayment strategy, consult the Federal Student Aid loan simulator or a qualified financial advisor.
Frequently asked questions
How much of my student loan will be forgiven?
The forgiven amount depends on your loan balance, interest rate, monthly IDR payment, and repayment term. If your payments don't fully cover the interest each month, your balance grows and more is forgiven at the end of the term. Enter your specific numbers to see the projection.
What is an income-driven repayment plan?
An IDR plan sets your monthly payment as a percentage of your discretionary income (typically 5–20%) rather than a fixed amount based on loan balance. After 20–25 years of qualifying payments, any remaining balance is forgiven.
Is student loan forgiveness taxable?
Standard IDR forgiveness is generally treated as taxable income in the year of discharge. PSLF forgiveness is tax-free at the federal level. The American Rescue Plan Act temporarily exempted all student loan forgiveness from federal tax through 2025.
What is the difference between PSLF and IDR forgiveness?
PSLF requires 120 qualifying payments (10 years) while working for a government or nonprofit employer, and forgiveness is tax-free. Standard IDR forgiveness requires 20–25 years of payments regardless of employer, and the forgiven amount is typically taxable.
What is negative amortization?
Negative amortization occurs when your monthly payment is less than the interest that accrues. The unpaid interest is added to your principal, causing your balance to grow over time even though you are making payments.
Should I pay more than my IDR minimum?
It depends on your goals. Paying more reduces interest costs and total amount paid, but it also reduces the amount forgiven. If you expect significant forgiveness, paying only the IDR minimum and saving the difference may be more cost-effective, especially if pursuing PSLF.
How do I know my IDR payment amount?
Your loan servicer calculates your IDR payment based on your income and family size, typically 5–20% of discretionary income. You can find your current payment on your servicer's website or use the Federal Student Aid Loan Simulator for estimates.
What happens if my income increases?
Higher income means higher IDR payments at your next annual recertification. This reduces the forgiven amount because you pay down more of the balance. This calculator uses a fixed payment — adjust the payment amount to model different income scenarios.
Can private student loans be forgiven?
No. IDR plans and federal forgiveness programs (PSLF, IDR forgiveness) apply only to federal student loans. Private loans have their own repayment terms set by the lender and generally do not offer forgiveness options.
What is the SAVE plan?
SAVE (Saving on a Valuable Education) replaced REPAYE in 2023. It calculates payments at 5% of discretionary income for undergraduate loans (10% for graduate) and provides an interest subsidy so balances don't grow when payments are less than the monthly interest charge.
