Know Your Repayment Options: Which IDR Plan Should You Use?
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IDR Aspects/Features
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ICR
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IBR 2009
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PAYE
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IBR 2014
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SAVE (REPAYE)
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First Available
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1994
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2009
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2012
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2014
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2015 (REPAYE), 2023 (SAVE)
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Eligible Federal Student Loan Types
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Direct Loans Only
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Direct & FFEL
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Direct Loans only; new borrower as of Oct 1, 2007, plus at least one loan received after Oct 1, 2011.
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Direct Loans only; new borrower as of July 1, 2014
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Direct Loans only
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Partial Financial Hardship Test
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No
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Yes
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No
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Discretionary Income Formula
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Taxable Income – HHS Poverty Guideline
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Taxable Income – HHS Poverty Guideline
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Taxable income – 225%*HHS Poverty Guidelines
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Minimum Payment Per Month
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Lesser of 20% of your Discretionary Income; or a fixed 12-year plan payment * AGI Factor
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15% of Discretionary Income
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10% of Discretionary Income
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Maximum Payment Per Month
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Fixed 12-year plan payment * AGI Factor
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Standard 10-year plan
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10% of Discretionary Income
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Unpaid Interest Capitalization Limits
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10% of starting repayment balance
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None
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10% of starting repayment balance
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None
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N/A
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Unpaid Interest Subsidy
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None
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100%
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Maximum Repayment Period (years)
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25
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25
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20
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25 (graduate school loans);
20 (undergraduate loans)
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Income Documentation
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Required At Least Annually (Anniversary Date); Can provide earlier if income has decreased
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Spouse Income Included
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Only if recent tax return filed jointly, you are not separated, or you have reasonable access to your spouse’s income |
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Payments May Qualify for PSLF
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All IDR plan payments are PSLF eligible if you are meeting the PSLF loan-type and employment qualifications
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Forgiveness taxable
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Tax-exempt (federal) between 2021-2025; Potentially taxable (federal and state) beyond 2025; PSLF tax-exempt (federal)
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Special Note
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Phase-out July 1, 2027, except for Consolidated Parent PLUS Loans
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Phase-out
July 1, 2027
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Formerly known as REPAYE
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Key:
ICR = Income-Contingent Repayment
IBR = Income-Based Repayment (original version first eligible in 2009; updated by law in 2014)
PAYE = Pay As You Earn
REPAYE = Revised PAYE; REPAYE was replaced by the SAVE plan in Oct 2023
SAVE = Saving on A Valuable Education; SAVE plan blocked by a federal court since July 2024; unable to apply for SAVE
PSLF = Public Service Loan Forgiveness
FFEL = Federal Family Education Loan; FFEL program discontinued in 2010
AGI = Adjusted Gross Income, measure from your federal tax return (line 11 of Form 1040); AGI can always be used as proxy for Taxable Income in IDR calculation
AGI Factor = Special multiplying factor based on income used to determine ICR payments
Dept of ED resource on Income-Driven Repayment Plans