Income-driven repayment (IDR) plans for federal student loans

What income-driven repayment plans are available right now?

Four plans, and no more. The Repayment Assistance Plan (RAP) launched July 1, 2026, and is the only IDR option for anyone whose first federal loan is disbursed on or after that date. Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) remain open to borrowers who already had federal loans before July 1, 2026, though PAYE and ICR are being phased out no later than July 1, 2028. The SAVE plan does not appear as an option at all anymore.

Source: Federal Student Aid, studentaid.gov, "Income-Driven Repayment Plans," and "IDR Plan Court Actions: Impact on Borrowers" (last updated July 1, 2026).

Two details cut across the table. PAYE and the newer IBR tier cap your payment at the 10-year Standard amount; ICR and RAP carry no such cap. And a fifth, non-income-driven option exists alongside these four: the new Tiered Standard Plan, a fixed payment over 10 to 25 years set by how much you owe (under $25,000: 10 years; $25,000 to under $50,000: 15 years; $50,000 to under $100,000: 20 years; $100,000 or more: 25 years). Payments on it do not count toward IDR or Public Service Loan Forgiveness (PSLF), but it is where you land by default if you never choose a plan.

What happened to the SAVE plan?

SAVE is dead as of this writing. On March 10, 2026, a federal court issued an order preventing the Department of Education from implementing the SAVE Plan and parts of the related Revised Pay As You Earn (REPAYE) formula, on top of earlier injunctions that had already put SAVE borrowers into an interest-accruing forbearance. Interest on SAVE-forbearance loans had already resumed on August 1, 2025, ending the zero-percent "litigation forbearance" borrowers had been in. Separately, OBBBA, signed into law July 4, 2025, ended SAVE by statute and created RAP and the Tiered Standard Plan in its place.

The Department's instruction to anyone still parked in SAVE-related forbearance is blunt: select a new repayment plan, or your servicer will move you to one anyway. Because this policy has already changed twice within a year, check studentaid.gov's court-actions page directly before assuming SAVE, or any specific IDR rule, still works the way it used to.

How is my IDR payment calculated? What is discretionary income?

For IBR and PAYE, your payment is a percentage of discretionary income, defined as your adjusted gross income (AGI) minus 150% of the HHS poverty guideline for your family size and state. For ICR, the same subtraction uses 100% of the poverty guideline instead of 150%, which is one reason ICR tends to produce the highest payment of the three. RAP works differently: it applies a percentage directly to your AGI, with no poverty-guideline subtraction at all, using the income-bracket table below.

The 2026 HHS poverty guideline for a household of one in the 48 contiguous states and Washington, D.C. is $15,960. That makes 150% of the guideline (the IBR and PAYE threshold) $23,940, and 100% (the ICR threshold) the full $15,960. A single borrower with no dependents earning $45,000 in AGI has discretionary income of $21,060 for IBR/PAYE purposes ($45,000 minus $23,940) but $29,040 for ICR purposes ($45,000 minus $15,960), because ICR shields less of that income from the calculation.

How does the Repayment Assistance Plan (RAP) work?

RAP, the plan that launched July 1, 2026 under OBBBA, does not use discretionary income at all. Instead it applies a base percentage directly to your total AGI, in $10,000 income bands, then subtracts $50 a month for each dependent you claim. The required payment can never fall below $10 a month.

Source: Federal Student Aid, studentaid.gov, "One Big Beautiful Bill Act, Important Definitions" (last updated Aug. 24, 2026). Percentage is divided by 12 for the monthly figure; subtract $50 a month per dependent.

RAP also carries a built-in interest subsidy: make your full payment on time each month and your balance will not grow beyond what it was when you entered the plan, even if the payment is smaller than the interest that accrued. RAP covers Direct Subsidized, Direct Unsubsidized, and Direct PLUS loans for graduate or professional students, plus most consolidation loans. Parent PLUS loans, and consolidations that paid one off, are not eligible; they route to the Tiered Standard Plan or ICR instead. For how unpaid interest builds and capitalizes on a federal loan generally, see how student loan interest works.

Are PAYE and ICR closing to new borrowers?

Yes, on two tracks. If your first federal loan is disbursed on or after July 1, 2026, you cannot enroll in PAYE or ICR at all; RAP and the Tiered Standard Plan are your only options. And even for borrowers who already qualify, OBBBA eliminates both plans entirely no later than July 1, 2028. PAYE also carries its own older "new borrower" test tied to loan dates back to 2007 and 2011, on top of the new 2026 cutoff. Expect a required move to IBR or RAP before the 2028 shutoff, with notice from your servicer.

A worked example: one income, four different payments

Take a single borrower with no dependents and $45,000 in AGI, living in one of the 48 contiguous states. Here is what each active plan would set as the monthly payment, using the 2026 poverty guideline and RAP brackets above:

• RAP: $45,000 falls in the $40,001 to $50,000 band, so the base payment is 4% of AGI: $45,000 × 4% ÷ 12 = $150.00 a month.
• IBR (loans first borrowed July 1, 2014 to June 30, 2026) or PAYE: discretionary income of $21,060 × 10% ÷ 12 = $175.50 a month.
• IBR (loans first borrowed before July 1, 2014): $21,060 × 15% ÷ 12 = $263.25 a month.
• ICR: 20% of the $29,040 ICR-basis discretionary income ÷ 12 = $484.00 a month, unless the alternate 12-year Standard-payment-scaled-to-income calculation comes out lower, in which case that smaller figure applies instead.

Same income, a nearly 3.5-fold spread in the required payment, purely from which formula the plan uses. That spread is exactly why the comparison table above, not any single plan's marketing, is the thing worth reading closely.

Who actually benefits from an IDR plan?

This site does not give personal financial advice, but the rules point to a few clear situations. IDR plans matter most when your federal loan balance is large relative to your income, since the payment is set by what you earn rather than what you owe, and that can mean paying far less per month than the standard 10-year plan requires. They are also required infrastructure for Public Service Loan Forgiveness, since qualifying PSLF payments generally have to be made under an IDR plan (or the Standard plan), not the Tiered Standard Plan. The tradeoff runs the other way for a smaller balance relative to income: stretching repayment out for 20 to 30 years under IDR, versus 10 years on Standard, usually means paying more total interest over the life of the loan, even with a smaller monthly bill. See student loan debt collection in 2026 for what happens if a loan is never brought current; defaulted loans are not eligible for any IDR plan.

Is IDR loan forgiveness taxed?

Starting in 2026, generally yes at the federal level. The American Rescue Plan Act had made student loan debt discharged from January 1, 2021 through December 31, 2025 exempt from federal income tax. That window closed at the end of 2025. A balance forgiven under IBR, ICR, or PAYE on or after January 1, 2026 is now treated as taxable cancellation-of-debt income, the same treatment RAP forgiveness will get decades from now when the first RAP balances reach their 30-year mark. The amount discharged could also be taxable at the state level depending on where you live. This "tax bomb" does not apply to Public Service Loan Forgiveness, Teacher Loan Forgiveness, or discharges due to death or total and permanent disability, all of which remain untaxed under separate, still-active provisions.

The flat truth: four plans, one dead one, and a 2028 deadline coming

If you have federal loans today, your real menu is RAP, IBR, PAYE, or ICR, and only RAP is available if your first loan comes after July 1, 2026. SAVE is not coming back on its old terms; treat any guide, including this one, that still describes SAVE as a live option as out of date. PAYE and ICR are walking dead plans: usable today if you already qualify, gone entirely no later than July 1, 2028. And forgiveness at the end of any of these plans is no longer the tax-free event it was from 2021 through 2025. None of that is a reason to avoid IDR; a lower bill today is still a lower bill today for a borrower who could not otherwise afford the standard payment. It is a reason to run the actual numbers for your income and loan type against the current rules, not the version of IDR that made headlines a few years ago. For the rest of the federal repayment landscape, see the student loans hub.