Federal student loans have built-in interest forgiveness for all of the income-driven repayment plans except for the income-contingent repayment plan.  This calculator will tell you how much interest forgiveness you might receive on your federal student loans based on the criteria entered into the loan information section.

Income-Based Repayment Interest Forgiveness

In the income-based repayment plan(IBR), any unpaid interest on the subsidized portion of your loan is forgiven for the first three years.  This applies only if your monthly IBR payment is less than the accruing interest on the subsidized portion of your loans, and not in the event where you fail to make a payment that is due.  The interest that would normally be due and capitalize on the loan does not do so and is considered forgiven.

Pay-As-You-Earn Interest Forgiveness

The Pay-As-You-Earn(PAYE) repayment plan provides the same amount of interest forgiveness as the IBR program, which is full forgiveness of unpaid interest for the first three years.  The difference between the IBR and PAYE plan is that the PAYE plan provides for a lower monthly payment.  Since you are required to pay less, the interest forgiveness amount increases over the IBR.

Revised-Pay-As-You-Earn Interest Forgiveness

The revised-pay-as-you-earn(REPAYE) provides for the most interest forgiveness.  Not only does it provides full interest forgiveness on the subsidized portion of your loan for the first three years, but it also provides 50% forgiveness thereafter on the subsidized portion.  For the unsubsidized portion of your loans, PAYE provides 50% forgiveness on interest from your first payment until the last.

Things to Know

Pay on Time

To qualify for interest forgiveness you must make sure you are paying your loans on time, and in the amount that is calculated when you submit your income to your lender.  To see what your payment might be in any of the income-driven repayment plans, you can use our student loan payment calculator.  For more information on interest forgiveness, you can visit this page.

Snapshot in Time

This calculator is a snapshot of your current student loan and financial status.  It assumes your income will not change over the life of the loan.  This is unlikely for most people, so depending on how your income changes, your payment would be impacted which would affect the overall interest forgiveness you receive on the loan.  Without knowing how much you will earn every year of your loan, its impossible to calculate an exact interest forgiveness.  Use this calculator as a tool to see which payment plan may be best for you, and how much forgiveness you may receive. Understand that it’s not an exact number and would be impossible to predict exactly how much interest forgiveness you would receive.

Recertifying Your Income

On an annual basis, you must recertify your income with your lender to remain in an income-driven repayment plan.  If you fail to do this, your lender will change your payment plan to a standard payment plan, which offers no interest forgiveness.

Subsidized and Unsubsidized Breakdown

Interest forgiveness happens independently on both subsidized and unsubsidized portion of your loans.  We need to know the loan balance for each to accurately calculate the amount of interest forgiveness you would receive.  If your loan balances have greatly varrying interest rates, use the weighted average interest rate calculator to see what your average rate is across all your loans.