How this number is made
Several income-driven plans set the payment at a percent of discretionary income, and discretionary income is often adjusted gross income minus 150% of the poverty guideline. The percent and the poverty line change with the plan and the year. Both are inputs.
- Use the poverty guideline for your household size, not a guess from another year, if you know it.
- Ten percent is a common share. Some plans use a different one. Type yours.
Formula
Discretionary income = AGI − 1.5 × poverty guideline. Payment per year = that amount × the percent. Monthly = yearly ÷ 12. Neither can go below zero.
Worked example
With the figures already in the form, monthly income-driven payment is $262.71.
Questions
Will the loan be paid off?
Not necessarily. If the payment is below the interest, the balance grows unless the plan has a subsidy. Forgiveness at the end, and whether it is taxed, is not computed here.
Which plan is this?
Whichever plan uses the percent and the 150% exclusion you typed. It is not a determination of eligibility.