Income-Driven Repayment (IDR) plans cap federal student loan payments at a percentage of discretionary income, making payments affordable regardless of loan balance. After 20-25 years of qualifying payments, any remaining balance is forgiven.
10 steps across 1 sections
1. Steps Process
- Determine your eligibility. IDR plans are available for most federal Direct Loans:
- IBR (Income-Based Repayment): Available for Direct Subsidized, Unsubsidized, and Consolidation Loans (excludes Parent PLUS). No income test required as of 2025.
- ICR (Income-Contingent Repayment): Available for all Direct Loans including Parent PLUS (after consolidation).
- PAYE (Pay As You Earn): Currently open but closing to new enrollments in 2027. Requires being a "new borrower" as of October 1, 2007.
- SAVE: Ended by court order March 2026; no longer available.
- Calculate your estimated payment. Use the Loan Simulator at studentaid.gov/loan-simulator:
- IBR payment: 10% or 15% of discretionary income (depending on when you first borrowed)
- ICR payment: 20% of discretionary income or a fixed 12-year payment adjusted for income (whichever is less)
- PAYE payment: 10% of discretionary income
- Payments are capped at the 10-year Standard Repayment amount (for IBR and PAYE)
Common Mistakes
- Not applying because you think you need to prove hardship
- Failing to recertify annually
- Not understanding forgiveness tax implications
- Consolidating and losing PSLF progress
- Ignoring the transition to RAP
Pro Tips
- Use IRS data retrieval for fast processing
- Report changes promptly
- Combine IDR with PSLF
- File taxes as "married filing separately" if beneficial
- Make payments even during forbearance