01Start with the disbursement date and loan program
Repayment choices changed on July 1, 2026. Loans first disbursed on or after that date generally use RAP or Tiered Standard. Loans from before that date may retain Standard, Extended and IBR; PAYE remains useful as a current-payment reference for eligible existing borrowers but ends no later than July 1, 2028. SAVE ended by court order in March 2026 and is not an available choice.
The rate presets are for the 2026–27 aid year: first disbursements from July 1, 2026 through June 30, 2027. January 2027 does not end that aid year or reset an existing fixed-rate loan. This build assumes no 2027–28 rate; for any other disbursement year, enter the actual fixed rate from the loan disclosure.
Tiered Standard fixes the term from principal when entering the plan: 10 years under $25,000, 15 years from $25,000, 20 years from $50,000 and 25 years from $100,000. It has a $50 monthly minimum except for a smaller final payment. Unlike the legacy 10-year Standard plan, Tiered Standard does not qualify for PSLF.
Direct Parent PLUS loans do not directly qualify for RAP, IBR or PAYE. Some pre-July 2026 consolidation histories change IBR eligibility; this aggregate calculator does not infer that history.
02RAP uses AGI bands, not discretionary income
RAP applies 1% to 10% of whole AGI in $10,000 bands, divides by 12 and subtracts $50 for each dependent claimed on the tax return. The minimum is $10 a month. At exactly $70,000 of AGI, the band is 6%, so the starting payment is $350 before any dependent reduction or spouse-debt proration — not $408.
Married filing jointly uses joint AGI. When both spouses have eligible federal loans, the household payment is prorated by each spouse’s share of combined eligible debt, with the $10 floor applied after proration. Married filing separately uses only the borrower’s AGI and the dependents claimed on that return.
- $10,000 or less: $120 a year, or $10 a month.
- $60,001–$70,000: 6% of AGI a year.
- $90,001–$100,000: 9%; above $100,000: 10%.
- RAP has no 10-year Standard-payment cap.
03Interest waivers and principal matches are separate ledger entries
After a full, on-time RAP payment, qualifying unpaid current-month interest is not charged. If the payment reduces principal by less than $50, the Department reduces principal by the lesser of $50 or the total monthly payment, minus the borrower payment already applied to principal. It is not automatically a $50 credit.
For a $35,000 loan at 6.5% with $15,000 of AGI and no dependents, the payment is $12.50. First-month interest is about $189.58, so $177.08 is waived and the principal match is $12.50. Principal falls by $12.50, not $50. Larger extra payments can change both benefits, which is why the schedule separates cash paid, interest waived and principal matched.
The model assumes extra payments accompany each required payment and do not advance the due date. Pay-ahead treatment can eliminate subsidies in months without an on-time payment; confirm the servicer’s allocation before using it.
04Legacy IBR and PAYE need different assumptions
New IBR generally uses 10% of discretionary income over 20 years; earlier IBR uses 15% over 25 years. PAYE uses 10% over 20 years. Discretionary income is AGI above 150% of the applicable poverty guideline, and payments are capped at the 10-year Standard amount. New enrollment also requires the applicable financial-hardship test. Calculated payments below $5 become $0; payments from $5 up to $10 become $10.
The verified 2026 HHS base guideline for one person is $15,960 in the contiguous states and DC, $19,950 in Alaska and $18,360 in Hawaii. Each additional person adds $5,680, $7,100 or $6,530 respectively. Later projected years inflate that base and AGI separately using your entered assumptions; those future values are not represented as published 2027 guidelines.
PAYE and IBR interest subsidies are not permanent. Only eligible subsidized-loan interest during the first three consecutive years is covered, subject to the actual history. After that window, unpaid interest remains accrued interest outside principal until a capitalization event. The model tracks that bucket instead of compounding it every month.
05Forgiveness, PSLF and taxes are not interchangeable
RAP has a 30-year qualifying-payment horizon. IBR is 20 or 25 years depending on borrower era, and PSLF requires 120 qualifying payments with qualifying employment and certification. Existing credited months matter, and extra payments do not accelerate the PSLF employment clock.
The federal exclusion that broadly made IDR cancellation tax-free expired after 2025. IDR forgiveness is now generally federally taxable unless a specific exception applies. PSLF and qualifying death or disability discharges are important exceptions. The calculator applies your entered rate only as a rough estimate to non-PSLF IDR cancellation; it does not calculate bracket stacking, insolvency or state tax.
- Nominal net cost = borrower payments plus the entered non-PSLF IDR tax estimate.
- Government waivers and principal matches are not counted as borrower cash payments.
- A current PAYE payment is excluded from lifetime winners because the plan ends no later than July 1, 2028.
06Extra payments, amortization and private refinancing
Monthly, annual and dated one-time extras use the same plan in both the baseline and accelerated comparison. Fixed loans can finish earlier with less interest. On IDR, extras can reduce interest and forgiveness, but they can also change RAP subsidies. The monthly CSV includes every payment, waiver, match, capitalization and remaining balance; the annual view and real PDF summarize the same ledger.
A private refinance is simply a fixed-rate scenario at the rate and term you enter. It is not a quoted offer. Refinancing a federal loan permanently gives up federal IDR, PSLF and other federal protections, so a lower private rate alone does not establish the better decision.
07What this aggregate estimate cannot know
One principal balance and one rate cannot reproduce several loans with different rates, subsidy status, eligibility or servicer allocation. Federal loans normally accrue daily interest, while this comparison uses end-of-period monthly ledgers. Use a balance-weighted rate for planning and the existing Debt Payoff calculator when you need per-account avalanche or snowball ordering.
Confirm current eligibility, qualifying-payment counts, capitalization, recertification and the exact payoff amount with Federal Student Aid and your servicer. Recertification problems can raise the required payment or affect credit; they do not justify a generic claim that every prior forgiveness month is reset.