Estimate federal student loan forgiveness under PSLF, a PAYE-style 20-year path, and an IBR-style 25-year path. Model remaining balance, optional state-tax exposure, and total cost.
Federal student loan forgiveness can reduce the long-run cost of repayment, but the payoff depends on which forgiveness path you are actually pursuing. Public Service Loan Forgiveness (PSLF) cancels the remaining balance after 120 qualifying payments for borrowers working full-time for eligible public-service employers. Outside PSLF, a remaining balance on an income-driven path may still be forgiven after the required repayment period if you remain eligible and do not pay the balance off first.
This estimator compares a PSLF path, a PAYE-style 20-year path, and an IBR-style 25-year path using the same starting balance, rate, income, and family size. It shows how much you might still owe at the forgiveness point, how much you would pay along the way, and what optional state-tax exposure could look like for non-PSLF forgiveness.
The output is a planning worksheet, not a servicer quote. Federal Student Aid says court actions are still affecting the IDR landscape, including SAVE, so the page focuses on current PAYE-style and IBR-style comparison math rather than treating SAVE as an active option.
Forgiveness paths can look cheaper or more expensive depending on how long you stay in qualifying employment, how quickly your balance amortizes, and whether a state taxes the forgiven amount. This worksheet gives you one side-by-side view of the main trade-offs before you confirm the live rules in Loan Simulator or with your servicer.
Discretionary Income = AGI - 150% x 2026 HHS Poverty Guideline. PAYE-style Payment = min(Standard 10-year payment, 10% x discretionary income / 12). IBR-style Payment = min(Standard 10-year payment, 15% x discretionary income / 12). PSLF Forgiveness = remaining balance after 120 qualifying payments. PAYE-style forgiveness = remaining balance after 240 total payments. IBR-style forgiveness = remaining balance after 300 total payments. Optional State Tax = forgiven amount x estimated state tax rate.
Result: PSLF forgiveness: ~$102,457 after 96 more payments | PAYE-style forgiveness: ~$150,821 with ~$7,541 estimated state tax | IBR-style forgiveness: ~$123,975 with ~$6,199 estimated state tax
With an $80,000 balance at 6% and $50,000 of income, the 2026 poverty-guideline model produces about $217/month on the PAYE-style path and about $326/month on the IBR-style path. In this constant-income example, the balance still grows over time because the income-driven payment is lower than the monthly interest for long stretches. PSLF still forgives the balance much sooner if the borrower qualifies.
PSLF can produce a much larger economic benefit because it forgives earlier and is not modeled here with any tax cost, but it requires sustained qualifying employment. Borrowers who do not expect to stay in qualifying public service often have to compare slower income-driven repayment paths instead.
When the payment on an income-driven path is lower than the monthly interest, the balance can remain elevated for years. That makes the monthly payment more manageable, but it also means the loan may still have a large balance at the forgiveness point.
If your state taxes non-PSLF forgiveness, it may still make sense to save gradually for that one-time cost. This page lets you estimate that state-tax exposure, but it does not replace checking the current state rules for the year you expect forgiveness.
Both PSLF and long-horizon IDR forgiveness depend on qualifying-payment counting. Use StudentAid and your servicer records to confirm your count because court actions, payment-count adjustments, and plan availability can all affect what counts and which plan you can actually use.
Last updated:
This worksheet compares three simplified federal-loan scenarios under constant-income assumptions. The PSLF path projects the remaining balance after 120 total qualifying payments using a PAYE-style 10% discretionary-income payment and treats PSLF forgiveness as tax-free. The 20-year path uses a PAYE-style payment cap, and the 25-year path uses an IBR-style 15% discretionary-income payment cap for older-borrower IBR math.
Discretionary income is estimated from annual income minus 150% of the 2026 HHS poverty guideline for the 48 contiguous states and D.C. The page does not model SAVE because StudentAid says federal court action is still blocking SAVE implementation, and it treats non-PSLF forgiveness as a potential state-tax issue only because current StudentAid guidance points borrowers to state tax exposure rather than a federal tax bill.
PSLF is a federal program that forgives the remaining balance on qualifying Direct Loans after 120 qualifying monthly payments while you work full-time for an eligible government or nonprofit employer. The worksheet models PSLF as tax-free and much faster than a long-horizon IDR-only path.
On an eligible income-driven repayment plan, any balance still remaining after the required 20- or 25-year repayment period can be forgiven. StudentAid says current rules and available plans can shift with court action and program updates, so use this page as a scenario worksheet rather than as a servicer determination.
PSLF forgiveness is not modeled here with any tax cost. For non-PSLF forgiveness, current StudentAid guidance warns mainly about possible state income tax, not a federal tax bill, but the state treatment depends on where you file. Use the optional state-tax field only as a planning estimate.
If the IDR payment is lower than the monthly interest, the balance can stay high or even grow for long stretches. That is why long-horizon forgiveness paths can sometimes show a larger balance at forgiveness than the original amount borrowed.
This worksheet uses discretionary income equal to AGI minus 150% of the 2026 HHS poverty guideline for the 48 contiguous states and D.C. The PAYE-style path uses 10% of discretionary income capped at the standard 10-year payment, while the IBR-style path uses 15% capped at the standard payment.
No. PSLF and the federal IDR forgiveness framework apply to federal loans, not private student loans. Private lenders may offer hardship programs, but they generally do not offer a government-style forgiveness system.