🎓 Student Loan Forgiveness Calculator
Calculate potential student loan forgiveness
ℹ️ Important Note
This calculator provides estimates for income-driven repayment plans. Actual forgiveness amounts depend on specific program requirements, eligibility, and program rules. Loan forgiveness may be taxable. Consult with your loan servicer and a tax professional for accurate information about your specific situation.
Number of people in household
Typically 20-25 years for income-driven plans
How to Use This Calculator
Enter Loan Amount
Input your total student loan balance. This is the amount you currently owe.
Enter Income and Family Size
Enter your annual income and family size. These determine your discretionary income and income-driven payment amount.
Enter Forgiveness Period
Enter the forgiveness period (typically 20-25 years for income-driven repayment plans). This is how long you'll make payments before remaining balance is forgiven.
Review Forgiveness Estimate
See estimated amount forgiven, monthly payment, total payments, and tax considerations. Note: This is an estimate - actual amounts depend on program rules and eligibility.
Formula
Discretionary Income = Annual Income - (Poverty Line × 1.5)
Monthly Payment = (Discretionary Income × 10%) ÷ 12
Amount Forgiven = Loan Amount - (Monthly Payment × 12 × Years)
Example Calculation:
If loan $50,000, income $40,000, family size 1, 20 years:
• Discretionary income = $40,000 - ($13,590 × 1.5) = ~$19,615
• Monthly payment = ($19,615 × 10%) ÷ 12 = ~$163/month
• Total payments = $163 × 12 × 20 = ~$39,120
• Amount forgiven = $50,000 - $39,120 = ~$10,880
About Student Loan Forgiveness Calculator
A student loan forgiveness calculator helps you estimate potential loan forgiveness under income-driven repayment plans. Income-driven repayment plans cap your monthly payment at a percentage of your discretionary income (typically 10-15%), and after making payments for 20-25 years (depending on the plan), any remaining balance may be forgiven. This calculator provides estimates based on simplified assumptions - actual forgiveness depends on specific program requirements, eligibility, payment history, and program rules. Loan forgiveness may be taxable income.
When to Use This Calculator
- Forgiveness Planning: Estimate potential loan forgiveness
- Income-Driven Plans: Understand income-driven repayment benefits
- Financial Planning: Plan for potential forgiveness and taxes
- Decision Making: Decide if income-driven plans make sense
Understanding Loan Forgiveness
- Income-Driven Plans: REPAYE, PAYE, IBR, ICR cap payments at % of income
- Forgiveness Period: 20-25 years of payments (varies by plan)
- Tax Implications: Forgiven amount may be taxable income
- Eligibility: Must meet program requirements and make qualifying payments
Why Use Our Calculator?
- ✅ Forgiveness Estimate: See potential amount forgiven
- ✅ Payment Calculation: Understand income-driven payments
- ✅ Tax Planning: Plan for potential tax on forgiveness
- ✅ Decision Support: Make informed repayment decisions
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is student loan forgiveness?
Student loan forgiveness means the remaining balance of your student loans is canceled after meeting certain requirements. Under income-driven repayment plans, remaining balances may be forgiven after 20-25 years of qualifying payments. Public Service Loan Forgiveness (PSLF) forgives loans after 10 years of qualifying payments for public service workers.
Is loan forgiveness taxable?
Loan forgiveness may be taxable income, depending on the program. Forgiveness under income-driven repayment plans is typically taxable, while Public Service Loan Forgiveness (PSLF) is tax-free. The forgiven amount is reported as income on your tax return in the year it's forgiven. Consult a tax professional for advice on your specific situation.
How do income-driven repayment plans work?
Income-driven repayment plans cap your monthly payment at a percentage of your discretionary income (typically 10-15%). Discretionary income is your income minus 150% of the poverty line. After making payments for 20-25 years (depending on the plan), any remaining balance may be forgiven. Plans include REPAYE, PAYE, IBR, and ICR.
Should I pursue loan forgiveness?
Whether to pursue loan forgiveness depends on your situation. Consider: (1) Your income and payment capacity, (2) Loan balance and interest rates, (3) Potential tax on forgiveness, (4) Career plans (PSLF requires public service), (5) Long-term financial goals. If you have high loan balances relative to income, forgiveness may be beneficial. Consult with your loan servicer and a financial advisor.