Income-Driven Repayment Plans in 2026: Which Plans Exist, Which Are Ending, and How to Choose

The One Big Beautiful Bill Act restructured income-driven repaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments.. Three IDR plans are being phased out, a new one launches in July 2026, and the eligibility rules have changed for the plan that remains.

• SAVESAVE Plan (SAVE)The Saving on a Valuable Education Plan, a federal income-driven repayment plan introduced in 2023 to replace REPAYE. Its implementation has been subject to ongoing litigation, and enrolled borrowers have faced court-ordered forbearance periods. is gone. The plan was vacated by court order on March 10, 2026, and the OBBBA eliminates it by statute.
• RAP launches July 1, 2026. The Repayment Assistance Plan replaces SAVE as the primary IDR option.
• PAYEPay As You Earn (PAYE)A federal income-driven repayment plan that caps monthly payments at 10% of discretionary income and forgives remaining debt after 20 years. It is only available to borrowers who took out their first federal loans on or after October 1, 2007. and ICRIncome-Contingent Repayment (ICR)The oldest federal income-driven repayment plan, with payments generally set at 20% of discretionary income or a fixed 12-year amount, whichever is lower. It is the only IDR plan available to Parent PLUS borrowers after consolidation. sunset July 1, 2028. Borrowers on those plans must switch to IBRIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments. or RAP by that date.
• IBR is permanent — and easier to get. The OBBBA removed the partial financial hardshipPartial Financial HardshipA federal eligibility standard used historically for IBR and PAYE, where a borrower qualifies if their calculated IDR payment is lower than the payment they would owe under a 10-year Standard Repayment Plan. requirement, so any borrower with eligible loans can now enroll.

What Happened to Income-Driven Repayment Plans

Congress overhauled the IDR system through the One Big Beautiful Bill Act, signed July 4, 2025. The law consolidates four IDR plans to two — IBR and RAP — by July 1, 2028.

• July 4, 2025 — OBBBA signed. The law created RAP, removed the partial financial hardship requirement for IBR, and set deadlines for phasing out SAVE, PAYE, and ICR.
• March 10, 2026 — SAVE vacated. The Eastern District of Missouri vacated the SAVE regulation. Borrowers who were on SAVE or in SAVE forbearance must now choose a different plan.
• July 1, 2026 — RAP launches. New borrowers (loans first disbursed on or after this date) are limited to RAP and the Standard Repayment PlanStandard Repayment PlanThe default federal repayment plan, which spreads loan payments evenly over 10 years — or up to 30 years for consolidation loans. It usually results in the lowest total interest paid among federal plans.. Existing borrowers may switch to RAP voluntarily.
• July 1, 2028 — PAYE and ICR end. Borrowers still enrolled at that date are automatically moved to RAP or IBR.

If you took out loans before July 1, 2026, you still have access to IBR, RAP, and any legacy plan that hasn’t yet sunset. If your loans are first disbursed on or after July 1, 2026, your only IDR option is RAP.

Related:

• Student Loan Changes on July 1, 2026
• One Big Beautiful Bill Act: What Changed for Student Loan Repayment

Which IDR Plans Are Available Now

Four IDR plans still exist as of March 2026, though two are on borrowed time.

Income-Based Repayment (IBR) is the only legacy IDR plan that survives permanently. IBR comes in two versions: Old IBR (15% of discretionary incomeDiscretionary IncomeFor federal income-driven repayment plans, a borrower's adjusted gross income minus a set percentage of the federal poverty guideline for their family size. Monthly IDR payments are calculated as a percentage of this amount., 25-year forgiveness) for borrowers who had loans before July 1, 2014, and New IBR (10% of discretionary income, 20-year forgiveness) for borrowers who took out their first loan on or after that date. Both versions cap payments at the 10-year Standard amount and allow $0 payments when your income is at or below 150% of the poverty guideline. The OBBBA removed the partial financial hardship requirement, so IBR is now open to any borrower with eligible Direct Loans or FFEL loans.

Related: Income-Based Repayment (IBR)

Repayment Assistance Plan (RAP) launches July 1, 2026. RAP replaces the discretionary income formula with a tiered percentage-of-AGI calculation across 11 income brackets. Payments range from 1% to 10% of your adjusted gross incomeAdjusted Gross Income (AGI)A borrower's total taxable income minus specific deductions, as reported on a federal tax return. Federal income-driven repayment payments are generally calculated using AGI., with a $10/month minimum — there are no $0 payment months under RAP. Unpaid interest is waived each month, not capitalized, so your balance cannot grow through negative amortization. RAP provides up to $50/month toward principal reduction when your payment doesn’t cover it. Forgiveness comes after 30 years. RAP has no payment cap — high-income borrowers may pay more than under IBR.

Related: Repayment Assistance Plan (RAP)

Income-Contingent Repayment (ICR) sunsets July 1, 2028. ICR calculates payments as the lesser of 20% of discretionary income or what you would pay on a 12-year fixed plan adjusted for income. Forgiveness comes after 25 years. ICR is the only IDR plan that accepts consolidated Parent PLUS loans — but only if you consolidate before July 1, 2026. After that date, no Parent PLUS borrower can access IDR through consolidation.

Related: Income-Contingent Repayment (ICR)

Pay As You Earn (PAYE) sunsets July 1, 2028. PAYE uses 10% of discretionary income with a payment cap at the 10-year Standard amount and offers forgiveness after 20 years. PAYE still requires partial financial hardship and is limited to borrowers who meet specific loan-origination-date requirements. If you are currently enrolled in PAYE, you may remain until the 2028 sunset. New enrollments remain available, but the plan ends in under two years.

Related: PAYE vs. RAP

How IDR Payments Are Calculated

IBR, PAYE, and ICR calculate payments from discretionary income. RAP replaces that formula with a tiered percentage of your full AGI. The two systems produce different payments for the same borrower.

Legacy plans (IBR, PAYE, ICR) calculate payments from discretionary income — your AGI minus 150% of the federal poverty guideline for your family size. The poverty guideline creates a protected income floor: if your AGI falls below 150% of the guideline, your discretionary income is zero, and your payment under IBR or PAYE is $0. Each plan then takes a percentage of that discretionary amount (10% for PAYE and New IBR, 15% for Old IBR, 20% for ICR) and divides it by 12 for the monthly payment. IBR and PAYE caps that result in the 10-year Standard Repayment amount.

RAP skips the poverty guideline entirely. Your AGI is placed into one of 11 income brackets, and the corresponding percentage (1% to 10%) of your full AGI becomes your annual payment, divided by 12. A $50/month deduction applies for each dependent you claim on your tax return — subtracted from the monthly payment, not from income. The minimum payment is $10/month regardless of income. There is no cap.

The practical difference: legacy plans protect a larger income floor but can produce higher payments above that floor (especially Old IBR at 15%). RAP starts charging from the first dollar of income, but at a lower rate for lower brackets, and it waives unpaid interest rather than capitalizing it.

Both systems use only your income if you file as married filing separatelyMarried Filing Separately (MFS)A federal tax filing status for married couples in which each spouse files an individual tax return. On most IDR plans, filing separately allows a borrower's payment to be based on their own income rather than household income.. Filing jointly includes your spouse’s income.

Related:

• Does Spouse Income Count for Income-Driven Repayment?
• Does Married Filing Separately Affect Student Loans?

Why are IDR Plans important?

The right IDR plan depends on when you borrowed, what you owe, and what you’re trying to accomplish.

If your loans are first disbursed on or after July 1, 2026: RAP is your only IDR option. You do not need to compare plans.

If you were on SAVE: You have a 90-day window starting July 1, 2026, to select a new plan. IBR and RAP are the primary choices. IBR offers $0 payments when your income is low enough and caps payments when your income is high. RAP waives unpaid interest and provides a principal subsidy, but has a $10 minimum and no cap. The comparison depends on your income, family size, and whether you are pursuing PSLFPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer..

Related: Should You Switch From SAVE to IBR?

If you are pursuing PSLF: All IDR plans qualify. The goal is the lowest monthly payment, since PSLF forgiveness comes after 120 payments, regardless of the amount paid. New IBR or RAP typically produces the lowest payment, depending on your income relative to the poverty guideline and your family size. Run the numbers for your situation.

Related: Which Repayment Plans Qualify for PSLF?

If you have Parent PLUS loans: ICR through consolidation is the only IDR option for Parent PLUS borrowers, and you must consolidate before July 1, 2026. After that date, no Parent PLUS loanParent PLUS LoanA federal Direct PLUS Loan taken out by the biological, adoptive, or stepparent of a dependent undergraduate student. The parent is legally responsible for repayment, not the student. — new or existing — can access IDR. This is a permanent deadline.

Related: Parent PLUS Loan Consolidation

If you are a high earner: IBR’s payment cap matters here. Under IBR, your payment never exceeds the 10-year Standard amount, no matter how much you earn. RAP has no cap — at higher incomes, RAP payments can exceed what you would pay under the Standard plan. If you earn well above the poverty guideline and your loan balance is moderate, IBR may produce a lower payment.

Related: IBR vs. RAP

How to Apply for an IDR Plan

You apply through your loan servicerLoan ServicerThe company that manages a borrower's federal student loan account, processes payments, and handles applications for repayment plans, deferment, forbearance, and forgiveness on behalf of the U.S. Department of Education. or at StudentAid.gov/idr. The application asks for income documentation — either through the IRS Data Retrieval Tool (which pulls your tax return automatically) or by uploading recent pay stubs.

You must recertify your income and family size every year. If you miss the recertification deadline, your payment reverts to the amount due under the Standard Repayment Plan, and on legacy plans, any outstanding interest capitalizes.

Processing times may be longer during the July 2026 transition period. Borrowers switching from SAVE who wait until late in the transition window may experience gaps in their repayment timeline if processing backlogs develop.

Related: How to Change Your Repayment Plan

If you are unsure which servicer handles your loans, look it up on StudentAid.gov or contact a federal loan servicer.

Related: Federal Loan Servicers

IDR ForgivenessIDR ForgivenessThe forgiveness of any remaining federal student loan balance after a borrower has completed 20 or 25 years of qualifying payments under an income-driven repayment plan, depending on the specific plan.

All IDR plans forgive the remaining balance after a set number of qualifying payments. IBR forgives after 20 years (New IBR) or 25 years (Old IBR). PAYE forgives after 20 years. ICR forgives after 25 years. RAP forgives after 30 years.

PSLF is available on all IDR plans after 120 qualifying payments while employed full-time by a qualifying public service employer. PSLF forgiveness is tax-free.

Non-PSLF IDR forgiveness is taxable income under current law. The American Rescue Plan Act exemption that made forgiven student loan balances tax-free expired on December 31, 2025. If your loans are forgiven through IDR after 2025, the forgiven amount is added to your taxable income for that year.

Periods of economic hardship deferment, prior payments on other IDR plans, and certain deferment and forbearance periods count toward the forgiveness payment requirement across all plans.

Related:

• IBR Loan Forgiveness
• Student Loan Forgiveness After 20 Years
• What Happens to Student Loans After 25 Years?
• IDR Payment Tracker