When you see repayment estimates for income-driven repayment (IDR) plans, keep in mind they’re just estimates, not final numbers. These calculations are based on several assumptions about your income, family, loans, and future circumstances.
Some of them might not match your real-life situation. Here’s a detailed breakdown of what’s assumed during the estimation process. This page is also updated regularly as new features or improvements are made to the system.
What We Assume About You
To calculate your repayment plan, we make a few key assumptions about your life and finances:
- Your income will grow by the same percentage each year. It doesn’t consider promotions, job loss, or big salary changes.
- Your family size stays the same every year, unless you specifically say it will change next year. Then, we only apply that new size starting from that point onward.
- Your marital status stays the same, meaning you don’t get married or divorced during repayment.
- You always file your taxes the same way—for example, “single” or “married filing jointly.”
- The poverty guidelines, which help determine your payment amount, will adjust annually based on inflation projections by the U.S. Department of Health and Human Services.
- The income percentage factors used in the ICR (Income-Contingent Repayment) Plan will also adjust based on inflation predictions.
- Inflation is estimated using a measure called the NSA CPI-U (Consumer Price Index for Urban Consumers), as projected by the Congressional Budget Office (CBO).
- After year 10, since the CBO only estimates inflation for up to 10 years, we assume the inflation rate from year 10 continues for all the following years.
Assumptions About Your Loans
1. Interest Rates
For loans with variable interest rates, we assume that the current interest rate stays the same forever, even though in reality, it might change.
2. Consolidation Loans
- We assume your consolidation loans don’t include parent PLUS loans. If they did, your repayment options would be limited to the ICR Plan only.
- The repayment period for consolidation loans is based only on the size of the new consolidated loan—not on any other federal or private loans you may have.
3. Repayment Incentives
If you currently receive a repayment incentive, like a 0.25% interest rate discount for using auto-pay, we assume you’ll continue getting it. If you don’t have one now, we assume you won’t receive one in the future.
Assumptions About Loans in Your Account
Some loans are not included in the IDR estimates or application. These include:
- Loans you’ve already paid off
- Loans in default
- Cancelled, discharged, or forgiven loans
- Health Professions Student Loans
- Nursing Student Loans
- Health Education Assistance Loans
If you notice a loan is missing, you should contact your loan servicer to clarify.
Also:
- We estimate how much time is left to repay each loan based on the data we have.
- If you switch repayment plans, miss payments, or pause repayment (forbearance/deferment), your remaining time and amount might change.
- We assume the repayment plan you are in now is the only one you’ve ever used, which may not reflect past changes.
Manually Added Loans
If you manually enter loans on your application:
- We assume those loans are just starting repayment, so you have the full term ahead of you.
- We assume you haven’t made any qualifying payments yet.
- We treat all manually added loans as undergraduate loans, except for Grad PLUS loans, which are for graduate or professional studies.
How Your Payments Are Estimated
1. Using IRS Information
If you agree to let StudentAid.gov connect with the IRS, your monthly payments are calculated using IRS data—like your income, tax filing status, and family size.
If your tax filing status doesn’t match IRS records, we use whatever the IRS has.
2. If IRS Data Is Unavailable
If you don’t provide IRS access, if there’s a technical issue, or if your IRS info is outdated, then:
- You’ll be asked to submit proof of your income (like pay stubs).
- Your servicer will review your documents and calculate your monthly payment manually.
3. Consistent Repayment Assumption
We assume you will always make full, on-time payments. If you ever fall behind, pause payments, or switch plans, your actual results may differ.
4. Monthly Payment Range
The estimated range does not include your past payments—only future payments from the current day forward.
5. Total Amount Paid
The total amount shown is the estimated future amount you’ll pay. Past payments are not counted in this estimate.
Spouse’s Loans and Their Impact
If you’re married and choose “Married Filing Jointly,” adding your spouse’s eligible student loans can change your payment:
- For IBR and PAYE plans, your payment will be reduced proportionally depending on the share of total loan debt you carry compared to your spouse.
- For ICR plans, your payment won’t change just by adding your spouse’s loans—unless you both request joint repayment of Direct Loans, which will then factor in both sets of loans.
Public Service Loan Forgiveness (PSLF)
If you’re using the PSLF simulator, we assume that:
- Every payment you make from now on will be on time.
- You’ll continue to work in a qualifying public service job during repayment.
- We include any confirmed past qualifying payments based on employment certification.
IDR Interest Benefits
Some IDR plans have a benefit where the government pays part of the interest if your monthly payment doesn’t cover all of it.
- We assume any past deferments were not economic hardship deferments, as our system doesn’t always have enough data to confirm that.
Final Thoughts
These estimates are meant to give you a general idea of your loan repayment under income-driven plans. However, real life can be different—your income might change, you might get married, switch jobs, or enter deferment.
Always double-check the details with your loan servicer, especially before making any major financial decisions. The more accurate and updated your personal information is, the more precise your repayment estimates will be.
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