Student Loan to Income Calculator
Calculate student loan debt-to-income from balance and starting salary.
Returns monthly payment and affordability rating under the 10% income guideline.
Student loan repayment as a percentage of income is one of the most important metrics for evaluating whether a degree is financially sustainable. The general rule from financial planners is that monthly loan payments should not exceed 8–10% of gross monthly income.
The affordability formula:
Payment-to-Income Ratio (%) = Monthly Loan Payment ÷ Gross Monthly Income × 100
Gross Monthly Income = Annual Salary ÷ 12
Federal income-driven repayment (IDR) plans base payments on income:
IDR Monthly Payment = (Discretionary Income × Plan Rate) ÷ 12
Discretionary Income = Adjusted Gross Income − (150% × Federal Poverty Line)
IDR plan rates:
| Plan | Payment Rate | Forgiveness |
|---|---|---|
| SAVE (new) | 5–10% | 20–25 years |
| PAYE | 10% | 20 years |
| IBR (new borrowers) | 10% | 20 years |
| IBR (older borrowers) | 15% | 25 years |
| ICR | 20% | 25 years |
Worked example: A social worker earns $48,000/year ($4,000/month gross). Student loan balance: $55,000 at 6.5%, 10-year standard plan.
- Standard payment: $625/month
- Payment ratio: $625 ÷ $4,000 = 15.6%, above the recommended 10% threshold
- On an income-driven plan the payment is a share of discretionary income rather than of the balance. Suppose the protected amount works out at $23,000: discretionary income is $48,000 − $23,000 = $25,000, and at a 10% rate that is $2,500 a year, or about $208/month, roughly 5.2% of gross income. The standard plan and the income-driven one differ by a factor of three here, which is the whole point of the comparison.
A caution on those plan figures: the protected-income multiple and the plan rates have been moving, and SAVE in particular has been through litigation. Take the arithmetic above as the shape of the calculation, not as current policy, and check the plan terms at studentaid.gov before budgeting against them.
Debt-to-income benchmarks:
| Ratio | Assessment |
|---|---|
| Under 8% | Manageable, minimal financial strain |
| 8–12% | Moderate, monitor other debt levels |
| 12–20% | High, consider IDR or refinancing |
| Over 20% | Severe, financial counseling recommended |
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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