A student loan forgiveness simulator projects your loan balance and total payments across three repayment paths: standard 10-year, income-driven repayment (IDR/SAVE) with 20-25 year forgiveness, and Public Service Loan Forgiveness (PSLF) at 10 years. See exactly which path costs least given your income and employer type.
Your Loan & Income Profile
Standard 10-Year
IDR Forgiveness
PSLF (10-Year)
Remaining Loan Balance Over Time
Cumulative Payments Over Time
Year-by-Year Projection
| Year | AGI | Standard Payment | Balance |
IDR Payment | Balance |
|---|
How the Student Loan Forgiveness Simulator Works
Choosing the wrong student loan repayment strategy can cost you tens of thousands of dollars. A $65,000 balance at 6.5% interest looks very different under a standard 10-year plan ($726/month, $22,000 in interest) versus IDR (income-based payments for 20-25 years, potential forgiveness) versus PSLF (10-year forgiveness if you work for a qualifying employer). This simulator projects all three paths side-by-side with your specific income trajectory.
Standard 10-Year Repayment
The standard plan divides your balance into 120 equal monthly payments. For $65,000 at 6.5%, that's approximately $726/month. You pay roughly $22,000 in total interest and are debt-free in 10 years. This is the fastest route to zero balance and the least total interest paid — but it requires the highest monthly payment. If your income is comfortable relative to your balance, the standard plan is usually the best financial choice.
IDR (Income-Driven Repayment) Forgiveness
IDR payments are set at 10% of your discretionary income (AGI minus 225% of the Federal Poverty Level). For a single person earning $62,000 with a family size of 1, discretionary income is $62,000 - ($15,650 × 2.25) = $26,788, and payment is $223/month. The remaining balance is forgiven after 20 years for undergraduate loans. Under current law, this forgiven amount may be taxable — the simulator estimates that tax liability. If your income grows significantly over time, payments increase, changing the final balance at forgiveness.
PSLF: The Best Deal for Public Service Workers
If you work for a qualifying government or 501(c)(3) employer, PSLF forgives your remaining balance after just 10 years (120 qualifying payments) — completely tax-free. For a borrower with $65,000 at low-income IDR payments of $223/month, 10 years of PSLF payments = $26,760 paid total, and the remaining balance (~$58,000+) is forgiven tax-free. Compare that to $87,000+ through standard repayment. PSLF is the most powerful program but requires continuous public service employment for 10 years.
The Tax Bomb on IDR Forgiveness
Unlike PSLF, IDR forgiveness currently triggers a taxable event in the year of forgiveness. If $45,000 is forgiven and you're in the 22% bracket, you owe approximately $9,900 in extra taxes that year. The simulator adds this estimated tax to your IDR total cost so you can compare apples-to-apples. Note: Congress has intermittently exempted forgiveness from taxes — the tax picture may change before your forgiveness date. PSLF forgiveness is permanently tax-free by statute.
FAQ
Is this student loan forgiveness simulator free?
Yes, completely free with no signup required. All calculations use 2026 federal poverty guidelines and run locally in your browser. Your financial data is never sent to any server.
What is the difference between IDR forgiveness and PSLF?
IDR (Income-Driven Repayment) forgiveness takes 20-25 years of qualifying payments, and the forgiven amount is taxable income in the year of forgiveness. PSLF (Public Service Loan Forgiveness) forgives after just 10 years (120 payments) for public service employees, and the forgiven amount is completely tax-free. PSLF can be dramatically cheaper for high-balance borrowers in public service.
What counts as public service for PSLF?
PSLF qualifying employers include federal, state, local, and tribal government agencies; 501(c)(3) nonprofits; and other nonprofits providing specific public services. This includes teachers, nurses, social workers, government employees, and employees of qualifying nonprofits. Private sector employment doesn't qualify. You must also have Direct Loans (not FFEL) and be on an IDR plan.
How is the IDR payment calculated?
IDR payment equals 10% of discretionary income, where discretionary income is your AGI minus 225% of the Federal Poverty Level for your family size. For 2026, the FPL for a single person is approximately $15,650. So at $65,000 AGI (single, no dependents), discretionary income is $65,000 - ($15,650 × 2.25) = $65,000 - $35,213 = $29,787. Payment = $29,787 × 10% / 12 = $248/month.
Will forgiven IDR loan amounts be taxed?
Under current law (post-ARPA), federal student loan forgiveness through IDR programs may be taxable income in the year of forgiveness unless Congress extends the tax exemption. The simulator estimates the approximate tax on the forgiven amount based on your AGI at forgiveness time. PSLF forgiveness is explicitly tax-free under the tax code.
What if my loan balance is growing under IDR?
This can happen when your IDR payment is less than the monthly interest accruing on your loan. Under the SAVE plan, the federal government subsidizes unpaid interest for subsidized loans — your balance won't grow above the original principal. The simulator shows the actual balance trajectory for each path so you can see this effect.
Which repayment path saves the most money overall?
It depends on your loan balance, income, and employer type. For public service workers with high balances relative to income, PSLF is almost always the winner — you pay less and owe nothing after 10 years tax-free. For private sector workers with low income, IDR may forgive a substantial balance. For borrowers who can afford aggressive payments, the standard 10-year plan has the lowest total interest paid.