On a $35,000 loan at 6%, the standard 10-year plan costs about $389 a month and roughly $11,630 in total interest. An income-driven plan at 5–15% of discretionary income can cut the payment to $70–$260 a month here, and any balance left after 20–25 years is forgiven — but interest keeps growing and the forgiven amount may be taxable. This tool shows both paths side by side so you can compare the 20-year cost range before you choose.
2025–26 federal undergrad loans: 6.00%
Used to estimate your IDR payment
| Measure | Standard 10-year | Income-driven range |
|---|---|---|
| Monthly payment | $389 | $152 – $457 |
| Total paid over 20 years | $46,629 (paid off by year 10) | $36,525 – $44,248 |
| Balance forgiven at 20 years | $0 | $45,540 – $0 (may be taxable) |
| Estimated total interest | $11,629 | Interest accrues if payments fall below it |
Planning estimate only. IDR payments are modeled at 5% (SAVE, as enacted, 20-year forgiveness) to 15% (legacy IBR, 25-year forgiveness) of discretionary income (AGI minus 150% of the 2025 federal poverty guideline). SAVE is paused by court order and IDR rules change — verify current terms with your loan servicer. Forgiven balances may be taxable. Not financial advice.
The standard plan uses the classic amortization formula: your loan balance, monthly interest rate, and a 120-month term produce a fixed monthly payment. The income-driven range follows the federal formula — payments are a percentage of discretionary income, defined as AGI minus 150% of the federal poverty guideline for your household size. We simulate two bookends: 5% of discretionary income with 20-year forgiveness (SAVE as enacted) and 15% with a 25-year window (legacy IBR), then report the 20-year total-cost range. When the payment is lower than monthly interest, the balance grows rather than shrinks — that is why IDR can end with a large forgiven balance.
If your standard payment is affordable, the standard plan almost always wins on total cost: it is finished in 10 years. If your cash flow is tight or your income is modest relative to the loan, income-driven repayment can keep payments near zero — a real lifeline — at the price of a longer payoff, continued interest growth, and a possibly taxable forgiven balance. Public Service Loan Forgiveness (PSLF) is a separate path: qualifying public-service employees can get forgiveness after 120 payments regardless of plan. Decide on cash-flow need first, then verify every number with your servicer.
We model discretionary income as your AGI minus 150% of the 2025 federal poverty guideline for your household size (the formula federal student aid uses for SAVE and IBR). We then apply a range of IDR formulas: 5% of discretionary income with 20-year forgiveness (SAVE, as enacted) up to 15% with 25-year forgiveness (legacy IBR). The range reflects that rules differ by plan and borrower cohort. Retrieved from studentaid.gov, 2026-08-20.
The SAVE plan is paused by court order as of this writing, and its future is uncertain. We model SAVE as enacted for planning purposes only. Income-driven repayment rules change frequently — verify your plan options and current terms with your loan servicer before making a decision.
Potentially, yes. Until the end of 2025, temporary federal tax relief made forgiven balances tax-free; the rules have since changed and forgiveness events on or after January 1, 2026 may be treated as taxable income. Consult a tax professional about your specific situation.
Yes, when your payment under IDR is low enough that you receive forgiveness at the 20- or 25-year mark, total payments can be lower than the standard 10-year plan. The trade-off is that interest keeps accruing, the loan stays on your credit for longer, and the forgiven balance may be taxed. The tool shows a total-cost range so you can see both scenarios.
If your income comfortably supports the standard payment, it is usually the lowest-total-cost option because the loan is cleared in 10 years. Income-driven plans exist to make payments manageable when cash flow is tight. The right choice depends on your income trajectory and goals.
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