Income-Driven Repayment (Repayment Context)
Federal repayment plans that base your monthly payment on income and family size — context, not a loan type. Major plan changes are underway through 2028.
Income-Driven Repayment plans are federal repayment options that calculate your monthly loan payment based on your income and family size rather than a fixed amount. These plans are generally designed for borrowers who have substantial federal student loan debt relative to their income, or who want more flexibility in their monthly payments. Under these plans, your payment obligation may be lower than under standard repayment, though the repayment period may be longer. The specific plans available, eligibility requirements, and how payments are calculated change periodically, so borrowers should verify current details at studentaid.gov.
Who it's for
Borrowers with eligible FEDERAL student loans who want a monthly payment tied to their income and family size. Income-driven repayment (IDR) is a way to REPAY federal loans, not a type of loan you borrow — we include it here because it's central to understanding federal-vs-private trade-offs. Private loans are not eligible for federal IDR plans. IMPORTANT: The IDR landscape has changed significantly since 2025 — see the Law Change section below for current plan availability.
How the interest rate is set
IDR doesn't change your loan's interest rate — it changes your monthly PAYMENT, calculating it as a portion of your discretionary income. The specific plans and formulas are set by the U.S. Department of Education and can change; check studentaid.gov for the plans currently available.
How much you can borrow
Your payment is based on income and family size, and after a set number of qualifying payments, any remaining balance may be forgiven under the plan's rules. Eligibility and terms are federal and subject to change — confirm at studentaid.gov.
Key terms at a glance
| What it is | A federal repayment plan (not a loan you borrow) |
| Payment based on | Income and family size |
| Eligible loans | Eligible FEDERAL loans only (not Parent PLUS for post-July-2026 loans) |
| Private loans | Not eligible for federal IDR |
| New plan for new borrowers (from July 1, 2026) | Repayment Assistance Plan (RAP) — see Law Change |
| PAYE / ICR / SAVE | Closed to new enrollees July 1, 2026; existing enrollees must move by June 30, 2028 |
Pros and cons
Potential advantages
- Monthly payments are tied to what you can afford, based on income and family size.
- After the required number of qualifying payments, a remaining balance may be forgiven under the plan's rules (30 years under RAP for new borrowers from July 1, 2026).
- RAP payments count toward Public Service Loan Forgiveness (PSLF).
- Can make federal loans far more manageable during lower-income periods.
Things to watch
- Available only for eligible FEDERAL loans — private loans don't qualify.
- Lower payments over a longer period can mean more interest paid overall.
- You must recertify income and family size periodically.
- The available plans have changed significantly: PAYE, ICR, and SAVE are closed to new enrollees as of July 1, 2026. IBR is only available if you have no new loans disbursed on or after that date.
- RAP is not available to Parent PLUS borrowers on loans disbursed on or after July 1, 2026.
- Existing SAVE, PAYE, and ICR borrowers must switch plans by June 30, 2028.
Sources: Federal Student Aid — Income-Driven Repayment; Federal Student Aid — One Big Beautiful Bill Act Updates; CFPB — Student Loans. Federal loan details follow U.S. Federal Student Aid (studentaid.gov); always confirm current rates and limits there.
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Compare student loan & refinance options →Frequently asked questions
Is income-driven repayment a type of loan?
No. It's a way to repay eligible federal student loans, setting your monthly payment based on your income and family size. It's not a loan you borrow — but it's a major reason federal loans offer more flexibility than private loans.
Can private student loans use income-driven repayment?
No. Federal income-driven repayment plans apply only to eligible federal loans. Some private lenders offer their own hardship or modified-payment programs, but those are not the same as federal IDR. Check your lender's terms.
What IDR plans are available for new borrowers after July 1, 2026?
The only income-driven option for borrowers with new loans first disbursed on or after July 1, 2026, is the Repayment Assistance Plan (RAP). PAYE, ICR, and SAVE are closed to new enrollees. IBR is also unavailable once you take out any new loan on or after July 1, 2026. RAP provides payments based on 1%–10% of Adjusted Gross Income and 30-year forgiveness. Check studentaid.gov for the latest enrollment details.
I'm on SAVE, PAYE, or ICR — what do I do?
You need to switch plans by June 30, 2028. If you take no action, you will be automatically moved to RAP on July 1, 2028. Your options are IBR (if you have no new loans after July 1, 2026), RAP, or Standard Repayment. SAVE interest resumed August 1, 2025 — you are accruing interest if you haven't already switched. See studentaid.gov for plan comparison tools.