Quick Reference

Income-Driven Repayment (IDR) Plans

Compare IBR, PAYE, ICR, and the new RAP plan's payment formulas, forgiveness timelines, and critical 2026-2028 deadlines.

Last Updated: Feb 2026

Key Numbers

IBR

10–15% of Discr. Inc.

PAYE

10%, 20-Yr Forgive

SAVE

Terminated

RAP

New Plan July 2026

Income-driven repayment (IDR) plans cap federal student loan payments at a percentage of income, with forgiveness after 20–30 years. The landscape is changing rapidly: the SAVE plan has been terminated, and a new Repayment Assistance Plan (RAP) launches July 1, 2026. By July 2028, only IBR and RAP will remain.

SAVE borrowers must act: The SAVE plan is terminated and borrowers are in forbearance with no forgiveness credit accruing. Switch to IBR, PAYE, or ICR now to resume qualifying payments.

Plan Status & Timeline

Plan	Payment Formula	Forgiveness	Status
IBR (New)	10% of discretionary income	20 yr	Active
IBR (Old)	15% of discretionary income	25 yr	Active
PAYE	10% of discretionary income	20 yr	Closes to new enrollment July 2027
ICR	20% of discretionary income	25 yr	Eliminated July 2028
SAVE	5–10% of discretionary income	20–25 yr	Terminated
RAP (New)	1–10% of AGI	30 yr	Launches July 2026

Currently in SAVE Forbearance? Your Next Steps

SAVE is terminated. Every month you stay in forbearance is a month with no forgiveness credit — that time is lost permanently.

Switch to IBR, PAYE, or ICR now by logging into StudentAid.gov/idr or calling your loan servicer. Forgiveness credit you earned before the SAVE freeze is preserved — it will count once you're on an active plan.

Your situation	Best move	Why
Pursuing PSLF	Switch to IBR immediately	PSLF only counts payments on an active IDR plan — every month in SAVE forbearance is a wasted month
High debt, low income	IBR (New) — $0 payments possible	IBR protects income below 150% FPL; RAP charges 1–10% of all AGI with a $10 minimum
New borrower after July 2026	RAP is your only IDR option	IBR, PAYE, and ICR will not be available for loans disbursed on or after July 1, 2026
Parent PLUS borrower	Consolidate before July 1, 2026	After that date, Parent PLUS loans lose all IDR access — consolidation is the only window remaining
Close to forgiveness (18+ yr)	IBR — faster timeline	IBR forgives in 20–25 yr; switching to RAP resets the clock to 30 yr (prior credit carries over but the target moves further out)

Critical Deadlines

Date	Event
Now	SAVE borrowers should switch plans — no forgiveness credit accrues during forbearance
July 1, 2026	RAP launches; Parent PLUS consolidation deadline for IDR access; new borrowers limited to RAP or Standard Plan
July 1, 2027	PAYE closes to new enrollments (existing PAYE borrowers may continue)
July 1, 2028	PAYE and ICR fully eliminated — all borrowers must be in IBR or RAP
Annually	Recertify income — missing deadlines can trigger interest capitalization

Plan Comparison

Legacy IDR plans calculate payments from discretionary income — the portion of AGI above a multiple of the federal poverty level (FPL). RAP instead uses a flat percentage of AGI with no FPL deduction.

Feature	IBR (New)	IBR (Old)	PAYE	ICR	RAP
Payment %	10%	15%	10%	20%	1–10%
Income Basis	Discretionary	Discretionary	Discretionary	Discretionary	AGI
FPL Multiplier	150%	150%	150%	100%	N/A
$0 Payment?	Yes	Yes	Yes	Yes	No ($10 min)
Payment Cap	10-yr std	10-yr std	10-yr std	None	10% AGI
Forgiveness	20 yr	25 yr	20 yr	25 yr	30 yr
PSLF Eligible	Yes	Yes	Yes	Yes	Yes
Interest Subsidy	No	No	No	No	Yes
Parent PLUS	Consolidate*	Consolidate*	No	Consolidate	No

*Parent PLUS borrowers must consolidate before July 1, 2026 and enroll in an IDR plan before July 1, 2028 to access IBR. After July 2026, Parent PLUS borrowers have no IDR path.

2026 Poverty Guidelines (48 Contiguous States)

Legacy IDR plans use FPL multiples to calculate discretionary income. RAP does not use FPL.

Family Size	100% FPL (ICR)	150% FPL (IBR, PAYE)
1 person	$15,960	$23,940
2 people	$21,640	$32,460
3 people	$27,320	$40,980
4 people	$33,000	$49,500
Each additional	+$5,680	+$8,520

RAP Payment Details

The Repayment Assistance Plan (RAP) launches July 1, 2026 as the sole IDR option for new borrowers. It uses AGI directly (no FPL deduction) with a sliding-scale percentage and a $10 minimum monthly payment.

RAP Payment Brackets

AGI	Annual Rate	Monthly (0 dependents)
≤ $10,000	Flat $10/mo	$10
$10,001 – $20,000	1%	$8 – $17
$20,001 – $30,000	2%	$33 – $50
$30,001 – $40,000	3%	$75 – $100
$40,001 – $50,000	4%	$133 – $167
$50,001 – $60,000	5%	$208 – $250
$60,001 – $70,000	6%	$300 – $350
$70,001 – $80,000	7%	$408 – $467
$80,001 – $90,000	8%	$533 – $600
$90,001 – $100,000	9%	$675 – $750
> $100,000	10%	$833+

Deduct $50/month per dependent (claimed on tax return) from base payment. Minimum payment is always $10.

RAP Key Features

Feature	Details
Interest Subsidy	Unpaid monthly interest is waived — balance cannot grow
Principal Match	If payment doesn't reduce principal by $50, ED contributes the difference
Spouse Income	Based on tax filing status; married filing separately excludes spouse's AGI
PSLF Eligible	Yes — 120 payments (10 years)
Parent PLUS	Not eligible

RAP May Be Lower If…

AGI is under ~$80K, you have dependents ($50/mo reduction each), or you want interest protection so your balance won't grow.

IBR May Be Lower If…

AGI is above ~$90K (FPL deduction shelters more income), you want faster forgiveness (20–25 yr vs. 30), or you need $0 payments.

Transition Rules

All IDR payments count toward the same forgiveness clock regardless of which plan you're on. Switching plans does not reset your progress, but some transitions may trigger interest capitalization.

Plan Switching FAQ

Question	Answer
Does switching reset IDR forgiveness?	No. All IDR payments count toward the forgiveness timeline.
Does switching reset PSLF?	No. Qualifying payments are preserved across IDR plans.
Does interest capitalize?	Possibly. Switching from IBR may capitalize unpaid interest.
How do I switch?	Apply at StudentAid.gov or contact your loan servicer.
What if I don't choose by July 2028?	PAYE/ICR borrowers will be auto-enrolled in RAP.

Borrower-Specific Guidance

Situation	Action
Currently in SAVE	Switch to IBR, PAYE, or ICR now — no forgiveness credit accrues in forbearance
Pursuing PSLF	Choose the plan with the lowest payment (all IDR plans qualify); PSLF forgiveness is tax-free
Parent PLUS borrower	Consolidate before July 1, 2026 to preserve IDR/PSLF access via IBR
New borrower after July 2026	Only RAP (income-driven) or Standard Plan (fixed payments, 10–25 yr) available
High debt, low income	IBR offers $0 payments and 20-yr forgiveness; RAP has $10 minimum but 30-yr timeline

Tax bomb warning: IDR forgiveness is taxable starting in 2026 (the American Rescue Plan Act exemption expired Dec. 31, 2025). PSLF forgiveness remains permanently tax-free. Plan accordingly by saving or using IRS Form 982 (insolvency) at forgiveness time.

IBR vs RAP: Side-by-Side Payment Example

Same borrower: $50,000 AGI, single, no dependents. The two plans use fundamentally different income bases — IBR shields income below the poverty threshold first; RAP charges a flat percentage of every dollar.

Step	IBR (New)	RAP
Adjusted Gross Income (AGI)	$50,000	$50,000
Income protection (FPL deduction)	– $23,940 (150% FPL)	None
Taxable base	$26,060	$50,000
Rate applied	10% of discretionary	5% of AGI (bracket)
Annual payment	$2,606	$2,500
Monthly payment	$217	$208
Forgiveness timeline	20 years	30 years
Interest subsidy	No	Yes — balance cannot grow
$0 payment possible?	Yes (income ≤ 150% FPL)	No ($10 minimum)

At $50K AGI the monthly payment difference is small ($9/mo), but the forgiveness timeline gap is 10 years. At lower incomes IBR often wins because the FPL deduction erases more of the taxable base; at higher incomes RAP's interest subsidy matters more. Use the Federal Student Aid Loan Simulator to model your specific income, family size, and loan balance.

Sources

This content is for educational and informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for guidance tailored to your situation.