Income-Driven Repayment (IDR) Plans
Compare IBR, PAYE, ICR, and the new RAP planâ€â€payment formulas, forgiveness timelines, and critical 2026-2028 deadlines.
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 |
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.
Sample Payment: IBR (New)
| Step | Amount |
|---|---|
| Adjusted Gross Income (AGI) | $50,000 |
| Minus 150% FPL (1 person) | – $23,940 |
| Discretionary income | = $26,060 |
| Annual payment (10%) | = $2,606 |
| Monthly payment | $217 |
Same borrower on RAP: $50K AGI × 5% = $2,500/yr → $208/month. Use the Loan Simulator at StudentAid.gov to compare your specific scenario.
Sources
- 1.Federal Student Aid — Income-Driven Repayment Plans
- 2.Congressional Research Service — The Repayment Assistance Plan (RAP) in P.L. 119-21
- 3.U.S. Department of Education — SAVE Plan Settlement Agreement (Dec. 2025)
- 4.HHS ASPE — 2026 Federal Poverty Guidelines
- 5.Federal Student Aid — Loan Simulator
- 6.Federal Student Aid — IDR Application
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.