REPAYE Calculator

Estimate Your Monthly REPAYE Payment

The Revised Pay As You Earn (REPAYE) plan is a federal student loan repayment option that bases your monthly payment on your income and family size. Use this calculator to estimate your potential monthly payment.

Your Estimated REPAYE Results

Formula Explanation: Your REPAYE monthly payment is calculated as 10% of your discretionary income. Discretionary income is the difference between your Adjusted Gross Income (AGI) and 150% of the poverty guideline for your family size. State income taxes paid are deductible from your AGI before calculating discretionary income. Unpaid interest may accrue if your payment doesn’t cover the full interest.

Key Assumptions:

• Payment is 10% of discretionary income.
• Discretionary Income = AGI – (1.5 * Poverty Guideline) – State Taxes.
• Poverty Guideline is based on the HHS poverty guidelines for the contiguous US states (Alaska and Hawaii have different guidelines).
• This calculation does not include potential waivers or specific hardship adjustments.
• Interest capitalization rules may apply if payments are insufficient to cover interest.

REPAYE Repayment Schedule Simulation

Loan Amortization Table (Yearly)

Year	Starting Balance	Annual Payment	Principal Paid	Interest Paid	Ending Balance

What is the REPAYE Plan?

The REPAYE (Revised Pay As You Earn) plan is a federal student loan repayment option designed to make student loan payments more manageable by tying them directly to your income. It’s one of the most popular income-driven repayment (IDR) plans available for federal Direct Loans. Unlike some other IDR plans, REPAYE has specific eligibility requirements and features that set it apart. Understanding the REPAYE plan is crucial for borrowers who want to control their monthly payments and ensure they have a clear path toward loan forgiveness or repayment within a reasonable timeframe. This REPAYE calculator is designed to give you a quick estimate of your potential monthly payments.

Who Should Consider the REPAYE Plan?

The REPAYE plan is particularly beneficial for borrowers who:

• Have high debt relative to their income.
• Are experiencing financial hardship or have a low income.
• Want a predictable monthly payment that adjusts annually with income changes.
• Are pursuing public service or other careers that may lead to loan forgiveness after 20 or 25 years.
• Have Grad PLUS loans or Direct Consolidation Loans that include Grad PLUS loans, as these are eligible under REPAYE (unlike the SAVE plan, which has different rules for these loan types).

It’s important to note that while REPAYE offers benefits, it also has specific rules regarding interest and potential payment increases if your income rises significantly. For many, it represents a good balance between affordability and structured repayment. Consider using our student loan repayment calculator to explore various scenarios.

Common Misconceptions About REPAYE

Several common misunderstandings surround the REPAYE plan:

• Misconception: Payments are always low. While often lower than standard plans, payments can increase if your income rises substantially.
• Misconception: Interest is always forgiven. REPAYE offers an interest subsidy, but if your payment doesn’t cover the accruing interest, the unpaid portion can be added to your principal (capitalized) under certain circumstances, increasing your total debt.
• Misconception: It’s the best plan for everyone. Depending on your income trajectory, loan types, and forgiveness goals, other IDR plans or even the standard repayment plan might be more suitable.
• Misconception: You must be married. REPAYE considers spousal income differently than other IDR plans. If married, your spouse’s income and federal loan debt are generally included in the calculation unless you file taxes separately. This REPAYE payment estimator can help clarify how these factors might influence your payment.

Accurate information is key to choosing the right repayment strategy. Explore our loan repayment options guide for more details.

REPAYE Formula and Mathematical Explanation

The core of the REPAYE plan lies in calculating your monthly payment based on your income and family size. The formula is designed to be affordable and adjustable.

Step-by-Step Derivation

1. Determine Adjusted Gross Income (AGI): This is your income reported on your federal tax return after certain deductions.
2. Calculate Poverty Guideline Adjustment: Multiply the relevant federal poverty guideline for your family size by 1.5. This figure represents the portion of income considered necessary for basic living expenses and is therefore excluded from “discretionary” income. The poverty guidelines are issued annually by the Department of Health and Human Services (HHS).
3. Subtract Deductible Taxes: Subtract any monthly state income taxes you pay. This deduction acknowledges that state taxes reduce the income available for loan repayment.
4. Calculate Discretionary Income: Subtract the adjusted poverty guideline amount (Step 2) and monthly state taxes (Step 3) from your AGI (Step 1).
   Discretionary Income = AGI - (1.5 * Poverty Guideline) - Monthly State Taxes
5. Calculate Monthly Payment: Your monthly payment is 10% of your calculated discretionary income.
   Monthly REPAYE Payment = 0.10 * Discretionary Income
6. Annual Recertification: You must recertify your income and family size annually. If your income increases, your payment will increase. If your income decreases, your payment will decrease.

Variable Explanations

Let’s break down the components used in the REPAYE calculation:

REPAYE Calculation Variables

Variable	Meaning	Unit	Typical Range / Notes
Adjusted Gross Income (AGI)	Your income after specific deductions, from your tax return.	USD (Annual)	Varies widely. Used as the starting point for income calculations.
Family Size	Number of individuals in your household.	Count	Usually 1 or more. Affects poverty guideline.
Poverty Guideline	Federal threshold defining poverty for different household sizes. Varies by year and location (contiguous US, Alaska, Hawaii).	USD (Annual)	Updated annually by HHS. Example for 1 person (2023 contiguous US): ~$14,580.
Discretionary Income	Portion of income above 150% of poverty guideline, minus state taxes.	USD (Annual)	Can be zero or negative if income is low relative to family size/taxes.
Monthly REPAYE Payment	Your calculated monthly payment under the plan.	USD (Monthly)	Generally lower than standard plans, but can fluctuate. Capped at the standard payment amount.
Monthly State Taxes	Estimated monthly amount paid in state income tax.	USD (Monthly)	Deductible portion. Varies by state and income.
Total Federal Direct Loan Balance	Sum of outstanding principal on all federal Direct Loans.	USD	Varies widely. Influences payoff time and total interest paid.
Average Interest Rate	Average annual interest rate across all eligible federal Direct Loans.	Percent (%)	Varies based on loan origination dates. Crucial for interest accrual.
Repayment Period	The intended duration of the loan repayment plan.	Years	REPAYE can have terms up to 20 years (for loans not needing consolidation) or 25 years (for consolidation loans). However, the calculation here uses a parameter up to 30 years for illustrative purposes, though REPAYE’s statutory limit is 25 years.

Practical Examples (Real-World Use Cases)

Let’s illustrate how the REPAYE calculator works with two distinct scenarios:

Example 1: Early Career Professional

Scenario: Sarah is a recent graduate working in a non-profit organization. She has significant student loan debt but a modest starting salary. She files her taxes as Head of Household with one dependent child.

• Inputs:
  • Adjusted Gross Income (AGI): $45,000
  • Family Size: 2 (herself + child)
  • Total Federal Direct Loan Balance: $60,000
  • Average Interest Rate: 5.0%
  • Repayment Period: 25 Years
  • Monthly State Tax Paid: $100
• Calculator Output (Estimated):
  • Poverty Guideline Estimate (Family Size 2, 2023 Contiguous US): $1.5 * 21,960 = $32,940
  • Discretionary Income: $45,000 – $32,940 – ($100 * 12) = $10,860
  • Estimated Monthly Payment: 10% of $10,860 / 12 = $90.50
  • Primary Result: $90.50 / month
  • Intermediate Values: Discretionary Income: $10,860; Poverty Guideline Estimate: $32,940; Deductible Interest Portion: ~$18.00 (calculated based on payment vs. accrued interest)
• Financial Interpretation: Sarah’s low income relative to her family size results in a very low monthly payment. This makes her loans manageable while she builds her career. She should be aware that her payment might not cover the full monthly interest, leading to potential interest capitalization over time, but the 25-year term aims for eventual loan forgiveness.

Example 2: Mid-Career Professional with Higher Income

Scenario: David is a few years into his career and earns a higher salary. He is single and has a moderate amount of student debt. He files taxes as Single.

• Inputs:
  • Adjusted Gross Income (AGI): $80,000
  • Family Size: 1
  • Total Federal Direct Loan Balance: $40,000
  • Average Interest Rate: 6.0%
  • Repayment Period: 20 Years
  • Monthly State Tax Paid: $250
• Calculator Output (Estimated):
  • Poverty Guideline Estimate (Family Size 1, 2023 Contiguous US): $1.5 * 14,580 = $21,870
  • Discretionary Income: $80,000 – $21,870 – ($250 * 12) = $55,130
  • Estimated Monthly Payment: 10% of $55,130 / 12 = $459.42
  • Primary Result: $459.42 / month
  • Intermediate Values: Discretionary Income: $55,130; Poverty Guideline Estimate: $21,870; Deductible Interest Portion: ~$0 (payment covers accrued interest)
• Financial Interpretation: David’s higher income leads to a significantly larger monthly payment compared to Sarah. His payment likely covers the full monthly interest, meaning his principal balance will decrease steadily, and he’ll pay off his loans within the 20-year term without substantial interest capitalization. He might also consider if the standard 10-year plan would be more financially advantageous given his income. This REPAYE calculator helps visualize this trade-off.

How to Use This REPAYE Calculator

Our REPAYE calculator is designed for simplicity and clarity. Follow these steps to get your estimated monthly payment:

1. Enter Your Adjusted Gross Income (AGI): Find this amount on your most recent federal tax return (Line 11 on Form 1040 for 2022 and later). Enter it as an annual figure.
2. Specify Your Family Size: This includes you and, if applicable, your spouse and any dependents you claim on your tax return.
3. Input Your Total Federal Direct Loan Balance: Sum the outstanding principal amounts for all your federal Direct Loans (e.g., Stafford, PLUS, Perkins if consolidated into Direct).
4. Enter Your Average Interest Rate: Calculate the average interest rate across all your federal Direct Loans. You can find individual rates in your loan servicer’s account.
5. Select Your Repayment Period: Choose the term corresponding to your loan type (20 years for loans not requiring consolidation, 25 years for consolidation loans).
6. Add Monthly State Income Tax: Enter the average monthly amount you pay in state income tax.
7. Click ‘Calculate REPAYE Payment’: The calculator will process your inputs.

How to Read the Results

• Primary Result (Monthly Payment): This is your estimated monthly payment under the REPAYE plan. It’s highlighted for easy viewing. Note that this payment is capped at what you would pay under the 10-year standard repayment plan.
• Intermediate Values: These provide context:
  • Discretionary Income: The calculated amount of your income subject to the 10% payment calculation.
  • Poverty Guideline Estimate: The baseline income considered essential for your family size, used to determine discretionary income.
  • Deductible Interest Portion: Estimates how much of your monthly interest might not be covered by your payment, which could potentially be capitalized.
• Formula Explanation & Key Assumptions: Read these sections carefully to understand the logic behind the calculation and important caveats.
• Repayment Schedule Simulation: The table and chart visualize how your loan balance might change over time, showing principal and interest paid annually. This is a projection based on consistent income and interest rates.

Decision-Making Guidance

Use the results to make informed decisions:

• Affordability: Can you comfortably afford the estimated monthly payment?
• Loan Payoff vs. Forgiveness: Compare the REPAYE payment to the standard 10-year payment. If your income is high, the standard plan might lead to faster payoff and less total interest paid. If your income is low, REPAYE offers a path to forgiveness after 20 or 25 years.
• Impact of Income Changes: Remember that your payment will change annually. Use the calculator to model potential payment increases if you anticipate a salary raise.
• Interest Capitalization: If your calculated payment is less than the monthly interest accrued, understand the potential for interest capitalization and how it increases your total debt.

This REPAYE payment calculator is a tool, not definitive financial advice. Consult with a financial advisor or your loan servicer for personalized guidance.

Key Factors That Affect REPAYE Results

Several variables significantly influence your REPAYE monthly payment and overall loan experience. Understanding these factors is crucial for effective financial planning:

1. Adjusted Gross Income (AGI): This is the primary driver of your REPAYE payment. Higher AGI means higher discretionary income and a higher monthly payment. Conversely, a lower AGI results in a lower payment. Annual recertification ensures your payment aligns with your current income.
2. Family Size: A larger family size increases the poverty guideline threshold, meaning more of your income is considered non-discretionary. This leads to lower discretionary income and a lower monthly payment. Accurate reporting of family size is essential.
3. Federal Poverty Guidelines: These annual benchmarks set by the government determine the income level considered necessary for basic needs. As these guidelines are updated yearly, your payment could slightly adjust even if your income and family size remain constant. The multiplier of 1.5 for REPAYE significantly impacts the calculation.
4. State Income Taxes Paid: REPAYE allows you to deduct your state income taxes from your AGI when calculating discretionary income. Borrowers in states with high income taxes may see a noticeable reduction in their calculated monthly payment compared to those in states with no income tax.
5. Total Loan Balance and Interest Rate: While these don’t directly affect your calculated monthly REPAYE payment (which is based solely on income and family size), they are critical for determining:
   • Total interest paid over the life of the loan.
   • Whether your payment covers the accruing interest. If not, unpaid interest may capitalize, increasing your principal balance and total repayment cost.
   • The timeline for loan forgiveness. REPAYE offers forgiveness after 20 years (for undergraduate loans) or 25 years (for graduate or consolidation loans).

   A higher balance or interest rate increases the likelihood of interest capitalization if your payment is low. Explore our student loan interest calculator for more insights.

6. Loan Type and Consolidation: The type of federal loans you have determines eligibility and the maximum repayment period under REPAYE. Most Direct Loans are eligible. If you have older loans (like FFEL), you might need to consolidate them into a Direct Consolidation Loan to qualify for REPAYE and its 25-year forgiveness term. This consolidation process itself can affect your interest rate and total repayment amount.
7. Spousal Income (if applicable): If you are married and file taxes jointly, your spouse’s income and loan debt are included in the REPAYE calculation, potentially increasing your payment significantly. If you file separately, only your income is considered, but you generally cannot pursue forgiveness of Direct Consolidation Loans that contain Parent PLUS loans made to others if filing separately. Understanding tax filing status is key.
8. Annual Recertification: Failing to recertify your income and family size annually can have consequences. Your servicer may revert you to the standard repayment plan, and any unpaid interest may be capitalized. Consistent recertification ensures your payment remains affordable and you stay on track for forgiveness.

Frequently Asked Questions (FAQ)

1. What is the difference between REPAYE and SAVE?

The Saving on Axtualant Repayment (SAVE) plan, formerly REPAYE, replaced the original REPAYE plan for most borrowers on July 1, 2023. While SAVE shares similarities like basing payments on income and family size, it offers more favorable terms, including a lower payment calculation (5% or 10% of discretionary income depending on loan type) and a more generous interest subsidy that prevents unpaid interest from accumulating even if your payment is less than the interest due. The REPAYE calculator above uses the 10% rate characteristic of the original REPAYE plan for demonstration, but borrowers should verify their eligibility and benefits under the current SAVE plan.

2. Does REPAYE include spousal income?

Yes, under REPAYE, if you are married and file your federal taxes jointly, your spouse’s income and federal loan debt are included in the calculation for your monthly payment. If you file taxes separately, your spouse’s information is excluded, but this may impact your eligibility for loan forgiveness, especially concerning consolidation loans including Parent PLUS loans. The SAVE plan offers more flexibility regarding spousal income if you file separately.

3. What happens to unpaid interest under REPAYE?

Under the original REPAYE plan, if your monthly payment does not cover the interest that accrues each month, the government subsidizes half of the unpaid interest. The other half of the unpaid interest may be added (capitalized) to your principal balance annually if you remain on the plan. This capitalization can increase your total debt over time. The newer SAVE plan offers a more robust interest subsidy, preventing any unpaid interest from capitalizing.

4. Can my REPAYE payment be $0?

Yes, if your income is low enough relative to your family size and the federal poverty guidelines, your calculated discretionary income could be zero or negative. In such cases, your REPAYE monthly payment will be $0. However, you still need to complete the annual recertification process to maintain this $0 payment status and remain on the plan.

5. How often do I need to update my information for REPAYE?

You must recertify your income and family size annually. This typically involves submitting documentation like pay stubs or a tax return transcript to your loan servicer. Failure to recertify within the specified timeframe (usually 10 days before your recertification deadline) can result in your payment increasing to the standard amount and potential capitalization of unpaid interest.

6. What is the maximum repayment period for REPAYE?

Under the REPAYE plan, the maximum repayment period is 20 years for borrowers whose loans were all taken out for undergraduate study. For borrowers with any graduate or professional study loans, or who have consolidated their loans, the maximum repayment period is 25 years. After this period, any remaining loan balance is typically forgiven.

7. Does REPAYE work for all federal student loans?

REPAYE is available for all federal Direct Loans, including Direct Subsidized, Direct Unsubsidized, Direct PLUS (taken out by students), and Direct Consolidation Loans. It does not cover Federal Family Education Loan (FFEL) Program loans or Perkins loans unless they have been consolidated into a Direct Consolidation Loan. Parent PLUS loans are only eligible if consolidated.

8. What happens if I switch from REPAYE to another plan?

If you switch from REPAYE to the standard 10-year repayment plan, your payments will likely increase, but you will pay off your loan faster and potentially pay less total interest over time. If you switch to another income-driven plan (like SAVE, IBR, or ICR), your payment calculation might change based on that plan’s specific rules. Importantly, any unpaid interest that may have capitalized under REPAYE will remain added to your loan balance.

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