Personal Finance · 2026 tables built in
Discretionary Income Calculator
Calculate your discretionary income two ways: the U.S. Department of Education definition used for federal student loan plans (AGI minus 150% of the 2026 HHS poverty guideline), and the BEA-style budgeting definition (after-tax income minus necessities). Then see what it means for an income-driven repayment payment.
🏛️ Dept of Education definition
This is the legal definition behind every income-driven student loan plan: discretionary income = AGI − 150% × federal poverty guideline for your household size and state. Uses the 2026 HHS poverty guidelines built into this page.
Discretionary income (Dept of Education)
Worked example
🧮 Next step: a discretionary income of $26,060/yr becomes roughly $217.17/month on a 10% IDR plan. Explore the IDR What-If tab, or get the full payment + forgiveness estimate in the Student Loan Calculator.
📊 BEA-style budgeting definition
The Bureau of Economic Analysis framework: discretionary income = disposable income (after-tax) − spending on necessities (housing, food, clothing, health care, utilities, transportation). A budgeting lens — not a legal definition. BEA's published series use national-accounts categories; this tab applies the same idea to your own budget.
Discretionary income (BEA-style)
⚠️ The two definitions on this page are not interchangeable. A lender or loan plan that asks for "discretionary income" almost always means the Dept of Education formula (previous tab) — never substitute your BEA-style number.
💳 IDR payment what-if
Turn a discretionary income figure into a quick estimated monthly IDR payment: payment = discretionary income × plan % ÷ 12. For amortization, forgiveness timelines, and $0-payment rules, use the full Student Loan Calculator (IDR Estimator).
Tip: calculate this first in the Dept of Education tab, then press "Use my result".
Estimated monthly IDR payment
📋 2026 HHS poverty guidelines (built-in table)
The exact figures this calculator uses. Vintage: 2026 HHS Poverty Guidelines — Federal Register document 2026-00755 (filed January 14, 2026; published January 15, 2026; effective January 13, 2026). Reflects a 2.63% CPI-U price increase between calendar years 2024 and 2025. For households larger than 8, add per extra person: $5,680 (contiguous + DC), $7,100 (Alaska), $6,530 (Hawaii).
| Household size | 48 contiguous + DC | Alaska | Hawaii |
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📜 Source: U.S. Department of Health & Human Services, "Annual Update of the HHS Poverty Guidelines", Federal Register 2026-00755. Hawaii figures here are the corrected Federal Register values (increment $6,530).
📖 How discretionary income works
The two definitions
1. Department of Education (student loans). A legal formula: take your AGI from your tax return and subtract 150% of the federal poverty guideline for your household size and state. The result — never below $0 — is the income base that income-driven repayment plans take a percentage of (10% or 15%, divided by 12 for the monthly payment).
2. BEA / budgeting. An economic concept: after-tax income minus spending on necessities. What is left is available for saving, investing, or non-essential spending. Useful for budgeting and affordability analysis, but it has no legal standing in loan programs.
Why the number matters
On an IDR plan, every extra dollar of discretionary income costs you 10–15 cents per year in loan payments — so a correct household size and the right state table genuinely move your payment. In budgeting, tracking discretionary income over time tells you whether lifestyle costs are creeping faster than income.
Common mistakes
Using gross salary instead of AGI · using the contiguous-states table while living in Alaska or Hawaii · forgetting that household size includes everyone the program counts (generally: you, your spouse, and dependents) · mixing the BEA and Dept-of-Ed definitions.
❓ Frequently asked questions
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