Paye Vs Save Calculator

Navigating student loan repayment options can be overwhelming, especially with multiple income-driven repayment plans available. The PAYE vs SAVE Student Loan Calculator is designed to simplify this decision by helping borrowers compare two popular repayment plans—Pay As You Earn (PAYE) and Saving on A Valuable Education (SAVE). This tool estimates your monthly payments, total repayment amount, and potential loan forgiveness under each plan, based on your financial profile.

Whether you want to minimize your monthly payment or reduce the total interest paid, this calculator empowers you to make informed decisions tailored to your unique circumstances.

What is the PAYE vs SAVE Student Loan Calculator?

This calculator is an interactive financial tool that compares two major federal student loan repayment plans—PAYE and SAVE—by estimating:

• Monthly payments
• Total amount paid over the repayment period
• The potential amount forgiven after the repayment term
• The estimated repayment duration

Using key inputs like your current loan balance, interest rate, adjusted gross income (AGI), family size, state of residence, and tax filing status, the calculator projects personalized results to help you evaluate which plan might be best for you.

How to Use the PAYE vs SAVE Student Loan Calculator: Step-by-Step

Step 1: Enter Your Current Student Loan Balance

Input the total outstanding amount you owe on your student loans in dollars. This forms the base for all repayment calculations.

Step 2: Provide Your Interest Rate

Enter the annual interest rate on your loan as a percentage. This impacts how interest accrues over time.

Step 3: Fill in Your Adjusted Gross Income (AGI)

Enter your annual AGI from your tax return. This number helps the calculator determine your discretionary income.

Step 4: Specify Your Family Size

Include the number of people in your household. This affects poverty guideline calculations used in determining repayment amounts.

Step 5: Select Your State of Residence

Choose your state or territory. The calculator uses specific poverty guideline figures for 48 continental states, Alaska, or Hawaii.

Step 6: Choose Your Tax Filing Status

Select your filing status from “Single,” “Married Filing Jointly,” or “Married Filing Separately.” This helps refine your repayment estimate.

Step 7: Click “Calculate”

The calculator processes your data and simulates repayment scenarios under PAYE and SAVE plans, showing results such as monthly payments, total paid, loan forgiveness, and repayment years.

Step 8: Review and Compare Results

See a side-by-side comparison of PAYE vs SAVE plans to understand which aligns better with your financial goals.

Practical Example

Imagine you have a student loan balance of $50,000 at a 6.8% interest rate. Your AGI is $45,000, you support a family of 3, you live in one of the 48 continental states, and your filing status is “Single.”

• Under the PAYE plan, the calculator estimates a monthly payment of approximately $300, a total repayment amount around $60,000, and loan forgiveness after 20 years for any remaining balance.
• Under the SAVE plan, the monthly payment might be slightly lower at $280, total payments could be less due to no interest accrual on unpaid amounts, and loan forgiveness after 25 years.

This comparison allows you to weigh monthly affordability against total cost and loan forgiveness timelines.

Features & Benefits of the PAYE vs SAVE Calculator

• User-Friendly Interface: Simple form inputs and clear results presentation ensure ease of use.
• Accurate Simulations: Incorporates poverty guidelines, family size adjustments, and tax filing considerations for realistic estimates.
• Side-by-Side Plan Comparison: Enables quick visual evaluation of PAYE vs SAVE plans.
• Customizable Inputs: Adaptable to individual borrower profiles, including state-specific poverty thresholds.
• Interactive Feedback: Progress bar and dynamic results enhance user experience.
• Sharing & Copying Results: Easily share your repayment plan comparison with advisors or family.

Use Cases

• Recent Graduates: Determine the most manageable repayment plan based on your current income and loan balance.
• Mid-Career Professionals: Reassess repayment plans after income changes or family growth.
• Financial Advisors: Provide clients with a quick, reliable comparison of income-driven repayment options.
• Loan Counselors: Use as a teaching aid to help borrowers understand their repayment options.
• Policy Researchers: Analyze repayment scenarios based on demographic inputs.

Tips for Getting the Most from the Calculator

• Use your most recent tax return data for accurate AGI.
• Consider family size carefully; changes affect your poverty guideline and repayment.
• Review your current loan interest rate to ensure realistic projections.
• Experiment with different filing statuses if your situation varies year to year.
• Use the reset button to start fresh with new data inputs.
• Copy and share your results for consultation or record-keeping.

FAQ: PAYE vs SAVE Student Loan Calculator

1. What is the difference between PAYE and SAVE plans?

PAYE caps payments at 10% of discretionary income with 20 years of repayment, while SAVE offers lower payments for undergraduates, no interest accrual on unpaid amounts, and a longer forgiveness timeline.

2. Can I use this calculator for private loans?

No, it’s designed for federal student loan repayment plans only.

3. What is discretionary income?

Discretionary income is the portion of your income above 150% (PAYE) or 225% (SAVE) of the federal poverty guideline based on your family size and state.

4. How accurate are the results?

They are estimates based on 2024 poverty guidelines and simplified assumptions; actual payments may vary.

5. Does the calculator consider loan consolidation?

No, it assumes your current loan balance and interest rate.

6. Can I use this if I have multiple loans?

Yes, but input the total combined balance and a weighted average interest rate.

7. How does family size affect payments?

Larger family sizes increase poverty guidelines, reducing discretionary income and monthly payments.

8. Why does state of residence matter?

Poverty guidelines vary by state, affecting your discretionary income calculation.

9. Does the filing status impact monthly payment?

Yes, because tax filing status can affect your AGI and thus discretionary income.

10. Can I rely solely on this calculator for loan decisions?

It’s a helpful tool but consult a loan servicer or financial advisor for personalized advice.

11. What happens after the forgiveness period ends?

Remaining balances may be forgiven but could be considered taxable income under PAYE.

12. Does SAVE plan’s forgiveness occur sooner?

SAVE plans have forgiveness after 20 years for undergraduate loans or 25 years for graduate loans.

13. Are payments tax-deductible?

Student loan interest paid may be tax-deductible depending on your situation.

14. Can I switch plans after choosing one?

Yes, you can switch repayment plans if you qualify.

15. What if my income changes?

Payments adjust annually based on updated income and family size.

16. How does the calculator handle unpaid interest?

For PAYE, unpaid interest may accrue; for SAVE, unpaid interest does not grow.

17. Is this calculator suitable for married couples filing jointly?

Yes, input combined income and family size.

18. What if I file taxes separately but live with my spouse?

Input your filing status and income accordingly for more accurate results.

19. Can I save my results?

You can copy and share results manually; the calculator does not save data.

20. Does it work on mobile devices?

Yes, the responsive design adapts to various screen sizes for mobile use.

Conclusion

Choosing the right student loan repayment plan is critical for financial health, especially when balancing monthly budgets and long-term debt reduction. The PAYE vs SAVE Student Loan Calculator offers a clear, practical way to estimate and compare your repayment options based on realistic financial factors. By leveraging this tool, you gain confidence in selecting a plan that best fits your life today and into the future.

Take control of your student loan journey — try the PAYE vs SAVE calculator today and make repayment decisions that work for you!