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Discretionary Income Calculator
Estimate the discretionary income behind income-driven student loan repayment and your likely monthly payment. Enter your numbers and press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
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How discretionary income works
Income-driven repayment plans do not look at your full income. They subtract a living allowance, set as a multiple of the federal poverty guideline for your household size, and only the income above that line counts. That remaining figure is your discretionary income, and your monthly payment is a fixed share of it.
Most older plans use 150% of the poverty line, while the newer SAVE plan uses 225%, which protects more income and produces lower payments. Choose the multiple that matches your plan to see the difference.
A quick example
A single borrower earns $60,000 with a household of one. The 2024 poverty guideline is $15,060, and 150% of that is $22,590. Discretionary income is $60,000 minus $22,590, or $37,410. At 10%, the annual payment is $3,741, about $312 a month. Under SAVE at 225%, the protected amount rises and the payment falls.
Things to keep in mind
This is an estimate. Your servicer uses your verified adjusted gross income, family size and the official guidelines to set the real payment. For current plan rules and the loan simulator, see the Federal Student Aid site. You can also explore our other free calculators.
Frequently asked questions
What is discretionary income?
For federal student loan repayment, discretionary income is your adjusted gross income minus a multiple of the federal poverty guideline for your household size and state. It is the income left over after a baseline allowance for living costs, and it sets your monthly payment on income-driven plans.
How is discretionary income calculated?
Take your adjusted gross income and subtract the poverty guideline for your household size multiplied by the plan factor. Most plans use 150% of the poverty line, while the SAVE plan uses 225%. If the result is below zero, your discretionary income is treated as zero.
How much will my monthly payment be?
Income-driven plans charge a fixed share of discretionary income, often 10%, divided by 12 for a monthly figure. This calculator applies the percentage you choose so you can compare plans, but your servicer sets the official amount.
Which poverty guidelines are used?
This tool uses the 2024 federal poverty guidelines for the 48 contiguous states and the District of Columbia. Alaska and Hawaii use higher figures, so residents there should treat the result as a rough estimate.
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