What Is Public Service Loan Forgiveness (PSLF)?

Public Service Loan Forgiveness is a federal program that forgives the remaining balance on qualifying federal student loans after:

• 120 qualifying monthly payments
• While working full-time for a qualifying employer
• Under an eligible repayment plan

If you meet all requirements, the remaining balance is forgiven tax-free at the federal level.

Most borrowers working in government, public schools, nonprofit hospitals, or 501(c)(3) organizations use PSLF as a long-term repayment strategy.

What Is a PSLF Calculator?

A PSLF calculator estimates:

1. Your monthly payment under an income-driven repayment (IDR) plan
2. Your total out-of-pocket cost until month 120
3. The projected forgiveness amount
4. Whether you will pay off the loan before reaching 120 payments

Instead of guessing, you see realistic projections based on your income, family size, loan balance, and interest rate.

How the PSLF Calculator Works

The calculator you provided follows three main steps:

1. Calculate your SAVE plan monthly payment
2. Simulate loan repayment over the remaining PSLF months
3. Estimate the forgiveness amount

Let’s break that down in plain English.

Step 1: Calculate SAVE Plan Monthly Payment

The calculator uses the SAVE repayment plan, which is one of the main income-driven repayment plans.

SAVE Plan Key Rule

Your monthly payment is based on:

• Your Adjusted Gross Income (AGI)
• Your family size
• Your state (poverty guidelines differ for Alaska and Hawaii)
• Your loan mix (undergraduate vs graduate)

Poverty Guideline Adjustment

Under SAVE:

• 225% of the federal poverty line is protected
• You only pay a percentage of income above that amount

Formula in simple terms:

Discretionary Income = AGI – (225% of poverty guideline)

If the result is negative, your payment is $0.

Loan Type Mix Matters

SAVE charges:

• 5% of discretionary income for undergraduate loans
• 10% for graduate loans
• A weighted average if you have both

The calculator includes a slider to choose your loan mix. That helps estimate your true monthly payment.

Step 2: Simulate Repayment Until 120 Payments

PSLF requires 120 qualifying payments.

The calculator asks:

• How many qualifying payments have you already made?
• How many months remain?

Then it simulates each remaining month:

• Adds interest
• Applies your SAVE payment
• Uses SAVE’s interest subsidy rule

Important SAVE Feature

If your monthly payment does not cover interest:

• The unpaid interest does not grow your balance
• The government subsidizes the difference

This prevents “negative amortization,” where balances grow over time.

That feature is built directly into the calculator logic.

Step 3: Estimate Forgiveness

After simulating all remaining months, the calculator shows:

• Total out-of-pocket cost
• Remaining balance at month 120
• Estimated tax-free forgiveness amount

If your payment is high enough to fully pay off the loan before 120 months, the calculator shows an alert:

Loan Paid Off Early – No forgiveness will be necessary.

That helps borrowers decide whether PSLF is truly beneficial in their case.

Inputs Required for Accurate Results

To use a PSLF forgiveness calculator correctly, you need:

1. Current Loan Balance

Your total outstanding federal student loan balance.

2. Average Interest Rate

Use a weighted average if you have multiple loans.

3. Qualifying PSLF Payments Already Made

Enter how many certified payments you have completed (0–120).

4. Adjusted Gross Income (AGI)

Found on your most recent tax return.

5. Family Size

Includes you, spouse, and dependents.

6. State of Residence

The calculator adjusts poverty guidelines for:

• Contiguous 48 states
• Alaska
• Hawaii

7. Loan Type Mix

Percentage of undergraduate vs graduate loans.

What the Results Mean

After clicking “Calculate Forgiveness,” the tool displays:

Estimated Monthly Payment

Your projected SAVE payment.

Months Remaining

How many qualifying payments you still need.

Projected Tax-Free Forgiveness

The balance expected to be wiped out after 120 payments.

Total Out-of-Pocket Cost

How much you are projected to pay from now until forgiveness.

Example Scenario

Let’s look at a realistic example.

• Loan balance: $60,000
• Interest rate: 6.5%
• AGI: $55,000
• Family size: 1
• 0 qualifying payments so far
• 100% graduate loans

In many cases like this:

• Monthly SAVE payment may be modest
• Total paid over 10 years could be far less than $60,000
• A significant balance may be forgiven

Now compare that to someone earning $120,000.

Their payment could be high enough to fully pay off the loan before 120 months. In that case, PSLF would not create additional benefit.

The calculator helps you see which category you fall into.

Why a PSLF Calculator Is Important

Many borrowers make decisions based on assumptions.

Common mistakes include:

• Assuming forgiveness will be huge without checking income impact
• Ignoring how family size affects payment
• Not realizing high income may eliminate forgiveness
• Forgetting interest subsidy rules

A PSLF calculator gives you clarity.

It turns policy rules into personal numbers.

When PSLF Makes the Most Sense

PSLF often works best for:

• Public school teachers
• Government employees
• Nonprofit hospital staff
• Social workers
• Public defenders
• Military service members

It is especially powerful when:

• Loan balance is high
• Income is moderate
• Career is long-term public service

Limitations of a PSLF Calculator

While useful, calculators make assumptions:

• Income remains constant
• Family size stays the same
• Employment remains qualifying
• SAVE plan rules do not change

Real life can differ.

Think of the calculator as a planning tool, not a guarantee.

How to Use This Calculator Strategically

Instead of using it once, try this:

Run Multiple Scenarios

Test:

• Higher income
• Lower income
• Adding a child
• Switching to mostly undergrad loans

Compare PSLF vs Standard Repayment

If your payment is high enough to eliminate forgiveness, you may want to compare:

• Standard 10-year plan
• Aggressive payoff strategy
• Refinancing (if not pursuing PSLF)

Key Takeaways

A Public Service Loan Forgiveness calculator helps you:

• Estimate SAVE monthly payments
• Project tax-free forgiveness
• Understand total repayment cost
• Avoid surprises
• Make confident long-term decisions