# What is my discretionary income?

Works out your discretionary income for federal student loan income-driven repayment (IBR, PAYE or ICR) from your income, family size and the 2026 poverty guideline.

- Page: https://www.acalculator.org/finance/discretionary-income-calculator
- JSON spec: https://www.acalculator.org/finance/discretionary-income-calculator.json
- Version: bf4ca08c70be

## Default answer

Example with the default inputs (Adjusted gross income $50,000.00, Family size 1, Where you live 48 states and DC, Repayment plan IBR, new borrower (150%, 10%), Poverty guideline year 2026): Your discretionary income is $26,060.00 a year, and the plan’s payment is about $217.17 a month.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| agi | Adjusted gross income | Your AGI from your latest federal tax return (with your spouse’s if you file jointly). |
| size | Family size | You, your spouse, and children and others you support, as your loan servicer counts them. |
| state | Where you live | Alaska and Hawaii have their own, higher poverty guidelines. |
| plan | Repayment plan | The plan sets how much of the guideline is protected and the share of the rest you pay. |
| year | Poverty guideline year | Servicers use the guideline in effect when they process your income. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| discretionary | Discretionary income a year | AGI minus the protected share of the poverty guideline, never below zero. |
| monthlyIncome | Discretionary income a month | Discretionary income divided by 12. |
| payment | Monthly payment | The plan’s share of discretionary income, divided by 12. |
| protected | Protected income | 150% (or 100% for ICR) of the poverty guideline for your family size. |
| guideline | Poverty guideline | The HHS poverty guideline for your family size, state and year. |

## Method

Discretionary income = AGI − 150% (IBR, PAYE) or 100% (ICR) × (first person + (family size − 1) × each added person), at least 0; payment = 10%, 15% or 20% of it ÷ 12.

## Assumptions

- HHS poverty guidelines for 2026 (or 2025), for the 48 states and DC, Alaska or Hawaii.
- IBR and PAYE payments are capped at the 10-year standard payment; ICR is the smaller of 20% of discretionary income and a 12-year payment adjusted for income. Those caps are not applied.
- The Repayment Assistance Plan (RAP), open from July 1, 2026, uses AGI without a poverty guideline, so it has no discretionary income.

## Worked examples

1. agi = $50,000.00, size = 1, state = 48, plan = ibr, year = 2026 gives guideline = $15,960.00, protected = $23,940.00, discretionary = $26,060.00, monthlyIncome = $2,171.67, payment = $217.17. Source: 34 CFR 685.209 (https://www.ecfr.gov/current/title-34/subtitle-B/chapter-VI/part-685/subpart-B/section-685.209): AGI − 150% of the guideline; HHS 2026 guideline $15,960 (https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines).
2. agi = $75,000.00, size = 4, state = 48, plan = paye, year = 2026 gives guideline = $33,000.00, protected = $49,500.00, discretionary = $25,500.00, payment = $212.50.
3. agi = $40,000.00, size = 2, state = AK, plan = icr, year = 2026 gives guideline = $27,050.00, discretionary = $12,950.00, payment = $215.83. Source: ICR 100% and 20% (34 CFR 685.209).
4. agi = $30,000.00, size = 3, state = 48, plan = ibr-old, year = 2026 gives protected = $40,980.00, discretionary = $0.00, payment = $0.00. Source: 34 CFR 685.209: discretionary income is the greater of $0 and the difference.
5. agi = $60,000.00, size = 2, state = HI, plan = ibr, year = 2025 gives guideline = $24,320.00, discretionary = $23,520.00, payment = $196.00.

## FAQ

### How is discretionary income calculated for student loans?

It is your adjusted gross income minus 150% of the HHS poverty guideline for your family size and state (IBR and PAYE), or minus 100% of it (ICR). It is never below zero.

### What is 150% of the poverty guideline in 2026?

For one person in the 48 states and DC, it is 1.5 × $15,960 = $23,940. For a family of 4 it is 1.5 × $33,000 = $49,500.

### How much is my IBR payment?

Borrowers since July 1, 2014 pay 10% of discretionary income a year, divided by 12; earlier borrowers pay 15%. With $26,060 of discretionary income, 10% is $2,606 a year, or $217.17 a month.

### What if my income is below 150% of the poverty guideline?

Then your discretionary income is $0 and your IBR or PAYE payment is $0 a month.

### Does the new Repayment Assistance Plan use discretionary income?

No. The Repayment Assistance Plan (RAP), open from July 1, 2026, charges 1% to 10% of adjusted gross income, minus $50 a month for each dependent. It does not subtract a poverty guideline.

## Sources

- Electronic Code of Federal Regulations, 34 CFR 685.209, Income-driven repayment plans (definition of discretionary income): https://www.ecfr.gov/current/title-34/subtitle-B/chapter-VI/part-685/subpart-B/section-685.209 (retrieved 2026-10-05)
- Federal Student Aid, Income-Driven Repayment Plans: https://studentaid.gov/manage-loans/repayment/plans/income-driven (retrieved 2026-10-05)
- U.S. Department of Health and Human Services, ASPE, HHS Poverty Guidelines for 2026: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines (retrieved 2026-10-05)
- Federal Register, Annual Update of the HHS Poverty Guidelines (2025), 90 FR 5917: https://www.federalregister.gov/documents/2025/01/17/2025-01377/annual-update-of-the-hhs-poverty-guidelines (retrieved 2026-10-05)