FinanceCalcs
Student Loan Forgiveness Calculator
Calculate your projected loan forgiveness amount under Public Service Loan Forgiveness (PSLF) or income-driven repayment plans — IBR, PAYE, and SAVE. See total payments made, balance forgiven, and compare all paths side by side.
Enter your loan balance, income, and family size to see which forgiveness path saves you the most.
Student Loan Forgiveness Calculator
Forgiven: $0
- Loan Balance
- Cum. Payments
Repayment Plan Comparison
| Plan | Starting Payment | Forgiveness Term | Total Paid | Balance Forgiven | Total Cost* | vs. Standard Plan |
|---|
*Total cost = total payments + forgiven balance (forgiven IDR amounts may be taxable income; PSLF forgiveness is tax-free). Lower total paid is generally better for PSLF; lower total cost is generally better for IDR.
"Student loan forgiveness is not free money — it requires years of qualifying payments and program compliance. Know the rules before you rely on it."
-- Student Loan Planning Principle
How student loan forgiveness works
There are two main federal paths to student loan forgiveness: Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) forgiveness.
PSLF forgives remaining Direct Loan balances after 120 qualifying monthly payments (10 years) while working full-time for a government or qualifying nonprofit employer. Payments must be made on a qualifying IDR plan or Standard 10-year plan. PSLF forgiveness is tax-free. Because it only requires 10 years of payments, high-balance borrowers working in public service typically save the most.
IDR forgiveness forgives remaining balances after 20–25 years of qualifying payments under IBR, PAYE, or SAVE. Unlike PSLF, forgiven amounts under IDR forgiveness are currently treated as taxable income in the year of forgiveness (through 2025; tax treatment is subject to change). The larger the forgiven balance, the larger the potential tax bill.
IDR payments are calculated as a percentage of discretionary income — income above 100–225% of the federal poverty level, depending on the plan. Lower income relative to debt generally means lower payments and more forgiveness.
lightbulb PSLF vs. IDR — Quick Comparison
| PSLF | IBR/PAYE | SAVE | |
|---|---|---|---|
| Forgiveness after | 10 years | 20–25 years | 10–25 years |
| Employer requirement | Yes (govt/nonprofit) | No | No |
| Payment cap | Standard 10-yr | 10–15% disc. income | 5–10% disc. income |
| Tax on forgiveness | Tax-free | Taxable* | Taxable* |
| Interest subsidy | Via IDR plan | Partial (IBR) | Full (unpaid interest covered) |
| Best for | High balance, public service | Moderate balance, private sector | Low income, high balance |
*IDR forgiveness tax treatment subject to change. Through 2025 it is excluded from taxable income under the American Rescue Plan.
Forgiveness FAQs
What loans qualify for PSLF?
Only federal Direct Loans qualify. FFEL loans and Perkins loans do not qualify directly, but may be consolidated into a Direct Consolidation Loan to become eligible. Private loans never qualify. Check your loan types at studentaid.gov before relying on PSLF.
Do I have to work in public service the entire 10 years?
Yes — all 120 qualifying payments must be made while working full-time for an eligible employer. Payments made in non-qualifying employment don't count. If you leave public service, your payment count pauses (it doesn't reset) and resumes if you return to qualifying employment.
What is the SAVE plan?
SAVE (Saving on a Valuable Education) is the newest and most generous IDR plan, replacing REPAYE. Key features: payments are 5% of discretionary income for undergraduate loans (10% for graduate), discretionary income is calculated at 225% of the poverty line (vs. 150% for other plans), unpaid monthly interest is fully covered by the government (no balance growth), and forgiveness timelines of 10 years for balances under $12,000 scaling to 20–25 years for higher balances.
Is forgiven student loan debt taxable?
PSLF forgiveness is always tax-free. IDR forgiveness is generally taxable as ordinary income in the year it occurs — though the American Rescue Plan excluded IDR forgiveness from federal taxes through 2025. Future tax treatment is subject to legislative change. A large forgiven balance creates a significant "tax bomb" — plan accordingly.
Forgiveness terminology
Discretionary Income
The income base used to calculate IDR payments — your AGI minus a poverty line multiple (100–225% depending on the plan). Lower discretionary income means lower monthly payments and potentially more forgiveness.
Federal Poverty Level (FPL)
Annual federal income thresholds used to determine eligibility for assistance programs. Updated each year. IDR plans exempt 100–225% of FPL from discretionary income calculations, with higher exemptions resulting in lower payments.
PSLF (Public Service Loan Forgiveness)
Forgives remaining Direct Loan balances after 120 qualifying payments while employed full-time at a government or 501(c)(3) nonprofit. Tax-free forgiveness. Submit an Employment Certification Form (ECF) annually to verify employer eligibility.
IBR (Income-Based Repayment)
Caps payments at 10% of discretionary income (new borrowers after 7/2014) or 15% (prior borrowers). Forgiveness after 20 or 25 years. Payments never exceed the Standard 10-year payment amount.
PAYE (Pay As You Earn)
Caps payments at 10% of discretionary income. Forgiveness after 20 years. Available only to borrowers who had no federal loan balance before October 2007 and received a disbursement after October 2011.
Capitalized Interest
Unpaid interest added to the loan principal. On standard loans, unpaid interest capitalizes when switching repayment plans, after deferment, or at other trigger events — increasing the balance on which future interest accrues. The SAVE plan eliminates capitalization in most situations.
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