This information is for the detailed people out there who are interested in how your student loan payment is calculated. We can feel your excitement!

**Why do we have discretionary income?** The government built income-driven plans to make sure everybody can afford their loans regardless of their income or the amount they owe.

How much you can afford is based on 10-20% of your discretionary income and the percentage depends on which plan you qualify for - PAYE, REPAYE, IBR or ICR.

Calculate your discretionary income - The chart below is the 2020 Poverty Guidelines according to the US Department of Health and Human Services. The poverty line is based on your family size.

**Step 1: ** Multiply the dollar amount based on your family size by 1.5. (Example - Your family has 4 people. That is $26,200. $26,200 x 1.5 = 39,300)

**Step 2:** Take the adjusted gross income or AGI from your prior tax return. Let’s say that is $60,000. This number is not your pre-tax salary. You would receive a standard deduction. Take $60,000 and subtract the number from step 1 $39,300. That is 20,700.

**Step 3**: If you are on PAYE or REPAYE, then 10% of this amount is your annual payment. If we continue the example above, it would be $2070 annually. Divided by 12 payments would make the payment $172.5 per month.

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