Income Contingent Repayment Calculator

Estimate your monthly student loan payments on the Income-Contingent Repayment (ICR) plan.

What is the Income Contingent Repayment (ICR) Plan?

The Income-Contingent Repayment (ICR) plan is a federal student loan repayment program that calculates your monthly payments based on your annual income, family size, and total loan debt. It is one of several income-driven repayment (IDR) plans designed to make student loan debt more manageable for borrowers. Under the ICR plan, your payment is recalculated each year and is capped at the lesser of two amounts: 20% of your discretionary income, or what you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income. This makes it a critical tool for those seeking affordable payments, and this income contingent repayment calculator can provide a clear estimate of your obligations.

The ICR plan is particularly notable because it is the only income-driven repayment option available to parent PLUS loan borrowers, provided they first consolidate them into a Direct Consolidation Loan. After making qualifying payments for 25 years, any remaining loan balance on the ICR plan may be forgiven, though the forgiven amount could be considered taxable income.

The Income Contingent Repayment Calculator Formula

The ICR payment is the lesser of two calculations. Our income contingent repayment calculator determines both to find your payment.

1. The Discretionary Income Method: Your monthly payment is 20% of your discretionary income, divided by 12.
2. The 12-Year Fixed Method: The amount you would pay on a loan with a 12-year fixed repayment schedule, multiplied by an income percentage factor.

For most borrowers, the first method based on discretionary income is the one that applies. Discretionary income for ICR is defined as your Adjusted Gross Income (AGI) minus 100% of the U.S. Federal Poverty Guideline for your family size.

Formula: Monthly Payment = (AGI - Poverty Guideline) * 0.20 / 12

Variables Explained

Variable	Meaning	Unit	Typical Range
Adjusted Gross Income (AGI)	Your total gross income minus specific deductions, found on your tax return.	USD ($)	$20,000 – $150,000+
Family Size	The number of individuals in your household.	Count	1 – 8+
Poverty Guideline	A federal threshold based on family size, used to calculate discretionary income.	USD ($)	$15,060 – $55,000+ (varies annually)
Loan Balance	The total principal and accrued interest on your federal loans.	USD ($)	$10,000 – $250,000+

Practical Examples

Example 1: Recent Graduate

A single borrower with an AGI of $45,000, a family size of 1, and a $30,000 loan balance at 5% interest.

• AGI: $45,000
• Poverty Guideline (for 1): ~$15,060
• Discretionary Income: $45,000 – $15,060 = $29,940
• Annual Payment (20%): $29,940 * 0.20 = $5,988
• Estimated Monthly ICR Payment: $5,988 / 12 = $499.00

This demonstrates how the income contingent repayment calculator derives a payment directly from income levels.

Example 2: Mid-Career with Family

A borrower with an AGI of $80,000, a family of 3, and a $75,000 loan balance at 6% interest.

• AGI: $80,000
• Poverty Guideline (for 3): ~$25,820
• Discretionary Income: $80,000 – $25,820 = $54,180
• Annual Payment (20%): $54,180 * 0.20 = $10,836
• Estimated Monthly ICR Payment: $10,836 / 12 = $903.00

How to Use This Income Contingent Repayment Calculator

Follow these steps to accurately estimate your monthly payment:

1. Enter Your Adjusted Gross Income (AGI): Find this value on your most recent federal tax return.
2. Enter Your Family Size: Count yourself and any dependents you support. If married and filing jointly, include your spouse.
3. Enter Your Loan Balance: Input the total amount of your Direct federal student loans. If you have Parent PLUS loans, you must explore using a student loan consolidation calculator first to be eligible for ICR.
4. Enter Your Average Interest Rate: Use the weighted average rate for all your federal loans.
5. Click “Calculate”: The calculator will display your estimated monthly payment and a breakdown of the calculation.

Key Factors That Affect Income-Contingent Repayment

• Adjusted Gross Income (AGI): This is the most significant factor. As your AGI increases, your payment will also increase.
• Family Size: A larger family size increases the poverty guideline amount, which in turn lowers your discretionary income and your monthly payment.
• Tax Filing Status: If you are married, filing taxes jointly will combine your and your spouse’s income, potentially increasing your payment. Filing separately may be a strategic option to consider.
• Loan Consolidation: For Parent PLUS borrowers, consolidation is a mandatory first step to access the ICR plan.
• Annual Recertification: You must recertify your income and family size each year. Failure to do so can result in your payment reverting to a higher amount.
• Loan Forgiveness Goals: If you are working towards Public Service Loan Forgiveness (PSLF), ICR payments count as qualifying payments. See our PSLF calculator for more details.

Frequently Asked Questions (FAQ)

What happens if my income is very low?

If your AGI is less than or equal to 100% of the poverty guideline for your family size, your discretionary income is considered $0, and your monthly payment will be $0.

Can private student loans be used with the ICR plan?

No, the Income-Contingent Repayment plan is only available for federal student loans. Private loans have their own repayment terms set by the lender.

Is the forgiven loan amount after 25 years always taxable?

Typically, yes. Under current law, the amount forgiven under IDR plans like ICR is treated as taxable income for that year. However, legislative changes can affect this.

Is ICR better than other IDR plans like SAVE or IBR?

Not always. Plans like SAVE (Saving on a Valuable Education) often offer lower monthly payments (based on 10% of discretionary income) and have more generous poverty guideline exemptions. ICR’s main advantage is being the only option for consolidated Parent PLUS loans. Our student loan repayment calculator can compare different plans.

How do I apply for the ICR plan?

You can apply directly on the Federal Student Aid website (StudentAid.gov) by completing the Income-Driven Repayment Plan application.

What is the “income percentage factor” used in the 12-year fixed calculation?

It is a multiplier provided by the Department of Education that adjusts the standard 12-year payment based on your income level. This calculation is complex, but our income contingent repayment calculator handles it for you.

Does interest still accrue on the ICR plan?

Yes. If your monthly payment is less than the interest that accrues each month, your loan balance may grow over time. However, the goal of the plan is an affordable payment, leading to forgiveness after 25 years.

Do I have to recertify my income every year?

Yes, you must submit updated income and family size information annually to remain on the plan and have your payment recalculated.

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