Student Loan Forgiveness Calculator
Enter your loan details and income to estimate how much of your federal student debt could be forgiven - either through Public Service Loan Forgiveness (PSLF) after 120 qualifying payments, or through an Income-Driven Repayment (IDR) plan after 20 or 25 years. The calculator shows your monthly IDR payment, the balance remaining at forgiveness, total amount paid, and the estimated tax liability on any forgiven amount. Switch between PSLF mode and IDR mode to compare both paths.
How student loan forgiveness works
Federal student loan forgiveness works through two main pathways. The first is Public Service Loan Forgiveness (PSLF), which cancels the remaining balance after exactly 120 qualifying monthly payments while working full-time for a government agency or a 501(c)(3) nonprofit. PSLF forgiveness is always tax-free, regardless of the amount. The second pathway is through Income-Driven Repayment (IDR) plans, which set your monthly payment as a percentage of your discretionary income and forgive any remaining balance after 20 or 25 years. IDR forgiveness may be taxable as ordinary income in the year you receive it, so planning ahead for the potential tax bill - sometimes called the "tax bomb" - is an important part of the strategy.
How this calculator estimates your forgiveness
The calculator computes your monthly IDR payment using the formula: discretionary income (your AGI minus a plan-specific percentage of the Federal Poverty Level for your family size) multiplied by the plan's payment rate, divided by 12. For example, the SAVE plan subtracts 225% of FPL from your AGI, then takes 5% of the result for undergraduate loans. The balance is then projected forward using your interest rate for the remaining months on the plan, and whatever balance remains at the end of the term is treated as forgiven. For PSLF, it counts the payments you have already made, projects the balance over the remaining qualifying payments, and shows the cancellation amount. The net savings figure compares your total out-of-pocket cost (payments plus any estimated tax) against the standard 10-year repayment total.
Choosing between PSLF and IDR forgiveness
PSLF is generally the better deal when it applies because the forgiveness is tax-free and comes after only 10 years of payments, often leaving a large unpaid balance that is simply cancelled. IDR forgiveness takes 20-25 years and the cancelled amount may be taxable, so it works best when the monthly payment reduction is significant and the loan balance is high relative to income. A useful rule of thumb: if your total debt is more than your annual income, IDR or PSLF usually saves money compared to the standard plan. If your debt is much less than your income, the standard 10-year plan may actually cost less in total even though the monthly payment is higher. You can run both modes in this calculator and compare the net savings figure to decide which path fits your situation.
The SAVE plan and recent legal developments
The SAVE (Saving on a Valuable Education) plan was introduced in 2023 to replace REPAYE. It offers the lowest discretionary income calculation (225% FPL exclusion) and a 5% rate on undergraduate loans. However, federal courts placed SAVE in an administrative forbearance in 2024 and the legal status of the plan remained contested through 2025-2026. Borrowers affected by this litigation had payments paused but were not accumulating PSLF-qualifying payments during the freeze. If you are currently in SAVE forbearance, contact your loan servicer about switching to PAYE or IBR, which remained available and continued to accumulate qualifying payments during the same period. This calculator models the published SAVE terms and does not account for any additional litigation outcomes.
IDR plan comparison
| Plan | Payment rate | FPL exclusion | Term | Tax on forgiveness | PSLF eligible |
|---|---|---|---|---|---|
| SAVE | 5% (undergrad) / 10% (grad) | 225% FPL | 20-25 yrs | Potentially taxable | Yes |
| PAYE | 10% discret. income | 150% FPL | 20 yrs | Potentially taxable | Yes |
| IBR (new) | 10% discret. income | 150% FPL | 20 yrs | Potentially taxable | Yes |
| IBR (original) | 15% discret. income | 150% FPL | 25 yrs | Potentially taxable | Yes |
| ICR | 20% discret. income | 100% FPL | 25 yrs | Potentially taxable | Yes |
| PSLF (any IDR) | Same as chosen IDR | Same as plan | 120 payments | Tax-free | Required |
2026 Income-Driven Repayment plans for federal student loans. SAVE rules subject to federal court proceedings.
Frequently asked questions
Is student loan forgiveness taxable?
It depends on the pathway. PSLF forgiveness is always federal income-tax-free by statute, no matter the amount forgiven. IDR forgiveness (after 20-25 years) was temporarily tax-free through 2025 under the American Rescue Plan Act, but that exemption has since expired. Under current law, IDR forgiveness is treated as ordinary income in the year it occurs, potentially triggering a large tax bill. Some states do not follow the federal exclusion even during the temporary period, so state taxes may apply as well. Always consult a tax professional before relying on forgiveness as a financial plan.
What counts as a qualifying PSLF payment?
A PSLF-qualifying payment must be: made after October 1, 2007; on a qualifying repayment plan (any IDR plan, or the standard 10-year plan); for the full amount due; no later than 15 days after the due date; and made while you are working full-time for a qualifying employer. Payments made during certain deferments or forbearances do not count, with some exceptions under the PSLF waiver. You should submit an Employment Certification Form annually - and whenever you change jobs - so the Department of Education can confirm your payment count.
What is the "tax bomb" and how should I prepare for it?
The tax bomb is the potential large income tax bill that arrives in the year your IDR forgiveness is granted. If $80,000 is forgiven, that amount could be added to your taxable income for that year, possibly pushing you into a higher bracket and resulting in a tax bill of $15,000-$25,000 or more. The standard strategy is to open a high-yield savings account now and set aside a portion of your monthly payment savings each month so the money is available when the bill comes due. A rough starting point: multiply the expected forgiven amount by your marginal tax rate. A tax professional or financial planner who specializes in student loans can help you model the exact liability and build a savings plan.
Can I switch IDR plans to maximize forgiveness?
Yes, you can switch plans, but the effect on forgiveness timing depends on which plans you move between. Prior payment counts carry over in some circumstances, but a switch can also reset or complicate the forgiveness clock. If you switch from PAYE (20-year term) to IBR (original, 25-year term), for example, you add five years to your timeline. Generally, sticking to one plan and re-certifying income annually is simpler. If you are targeting PSLF, the plan choice matters less because forgiveness occurs at 120 payments regardless; pick whichever IDR plan gives you the lowest monthly payment to maximize the forgiven amount.
Does refinancing my loans affect forgiveness eligibility?
Yes, refinancing federal loans into private loans immediately disqualifies them from all federal forgiveness programs - PSLF, IDR forgiveness, and any future government relief. Once federal loans are refinanced privately, there is no way to reverse the process and restore PSLF or IDR eligibility. Refinancing makes sense only if you have high-income certainty, a high interest rate, and no intention of pursuing forgiveness. If you have any chance of qualifying for PSLF or IDR forgiveness, keep your loans federal.
How does family size affect my IDR payment?
A larger family size lowers your IDR payment because the Federal Poverty Level threshold used to calculate discretionary income rises with each additional family member. For 2026, the FPL for a family of one is $15,960, and each additional member adds $5,680. If your plan excludes 225% of FPL (SAVE) and your family grows from one to three people, your FPL threshold increases by about $11,360, reducing your discretionary income by that amount and lowering your monthly payment proportionally. You re-certify family size annually, so changes in household composition can meaningfully shift your payment from year to year.
What if I can't afford my IDR payment?
If your calculated IDR payment is higher than you can afford, re-certify your income immediately - if your earnings have dropped, your payment will drop too. If your income is very low relative to the FPL threshold, your calculated payment could reach $0, and even $0 payments count as qualifying payments for PSLF and toward IDR forgiveness under most plans. You can also contact your servicer about hardship forbearance or deferment for short-term relief, but keep in mind that forbearance periods generally do not count toward PSLF or IDR forgiveness unless you are in a special forbearance connected to a court-ordered plan pause.