If the Standard 10-year payments on your federal student loans are more than you can carry, you have alternative student loan repayment plans to choose from: income-driven options that tie your payment to what you earn, and fixed plans that simply stretch the schedule or start payments lower and step them up. Which ones you can actually enroll in depends on when your loans were disbursed, because the menu changed on July 1, 2026.
Which Plans Are Available Right Now
Two things shifted in 2026 that determine your options today. The SAVE plan was struck down and formally ended through a settlement between the Department of Education and the State of Missouri; borrowers who were in SAVE have to pick a different plan or get moved automatically into the Standard or a new Tiered Standard Plan.1Federal Student Aid. IDR Court Actions2U.S. Department of Education. Next Steps for Borrowers Enrolled in Unlawful SAVE Plan And on July 1, 2026, the Department launched the Repayment Assistance Plan (RAP) and started phasing out older income-driven plans.3Federal Student Aid. Big Updates
The practical result is a split by loan disbursement date. If any of your loans were disbursed before July 1, 2026, you can still enroll in Income-Based Repayment (IBR), Pay As You Earn (PAYE), or Income-Contingent Repayment (ICR), along with RAP. If your only loans were taken out on or after that date, RAP is your sole income-driven option. PAYE and ICR are scheduled to disappear entirely by July 1, 2028, and servicers will move remaining enrollees into RAP.
Non-income-driven alternatives — Graduated and Extended repayment — remain available regardless of when you borrowed.
Income-Based Repayment (IBR)
IBR is the most established income-driven plan still accepting new enrollees. To qualify, your calculated IBR payment has to come out lower than your Standard payment, a threshold the regulations call “partial financial hardship.”4eCFR. 34 CFR 685.209 – Income-Driven Repayment Plans If your debt is large relative to your income, you qualify. If you comfortably clear Standard payments, IBR won’t help.
How much you pay depends on when you first borrowed:
- New borrowers on or after July 1, 2014 pay 10 percent of discretionary income, with forgiveness after 20 years of qualifying payments.
- Borrowers who took out loans before July 1, 2014 pay 15 percent of discretionary income, with forgiveness after 25 years.
“Discretionary income” for IBR means everything you earn above 150 percent of the federal poverty guideline for your household size. The 2026 guideline for a single-person household in the contiguous 48 states is $15,960, so 150 percent is $23,940.5U.S. Department of Health and Human Services. 2026 Poverty Guidelines A single borrower earning $40,000 has about $16,060 in discretionary income, which puts the monthly IBR payment for a post-2014 borrower at roughly $134. Someone earning under $23,940 owes $0.
IBR gives you a limited interest subsidy on subsidized loans: if your payment doesn’t cover the monthly interest, the government pays the difference for the first three consecutive years.6Edfinancial Services. Income-Based Repayment (IBR) After that, unpaid interest accrues but doesn’t capitalize as long as you keep recertifying on time.
The Repayment Assistance Plan (RAP)
RAP is the new default income-driven option for anyone borrowing after June 30, 2026, and it’s also open to existing borrowers who want to switch. Its design is different from the older plans. Instead of a percentage of discretionary income above a poverty threshold, RAP uses a sliding scale tied directly to your adjusted gross income:7Federal Register. 34 CFR Parts 674, 682 – Repayment Assistance Plan Final Rule
- AGI up to $10,000: $120 per year ($10 per month)
- $10,001–$20,000: 1 percent of AGI
- $20,001–$30,000: 2 percent of AGI
- $30,001–$40,000: 3 percent of AGI
- $40,001–$50,000: 4 percent of AGI
- $50,001–$60,000: 5 percent of AGI
- $60,001–$70,000: 6 percent of AGI
- $70,001–$80,000: 7 percent of AGI
- $80,001–$90,000: 8 percent of AGI
- $90,001–$100,000: 9 percent of AGI
- Above $100,000: 10 percent of AGI
Two features matter most. There is no $0 payment month under RAP; the floor is $10 regardless of income. And the plan includes an interest subsidy that covers any unpaid interest each month, so your balance doesn’t grow while you’re enrolled. That addresses the negative amortization problem borrowers hit on older plans, where the balance climbed for years despite steady payments.
The forgiveness timeline is 30 years of qualifying payments, longer than the 20 or 25 years on older plans. RAP payments do count toward Public Service Loan Forgiveness if your employment qualifies.
PAYE and ICR — Still Available, With a Deadline
If all of your loans were disbursed before July 1, 2026, PAYE and ICR remain open to you, though both are winding down.
PAYE caps payments at 10 percent of discretionary income and forgives any remaining balance after 20 years. To qualify, you must have been a new borrower on or after October 1, 2007, and received a Direct Loan disbursement on or after October 1, 2011.8Consumer Financial Protection Bureau. What Are Income-Driven Repayment (IDR) Plans and How Do I Qualify You also have to show partial financial hardship, the same test as IBR.
ICR has historically been the fallback for Parent PLUS borrowers, who can reach it by consolidating their Parent PLUS loans into a Direct Consolidation Loan.9Consumer Financial Protection Bureau. Options for Repaying Your Parent PLUS Loans The payment is the lesser of 20 percent of discretionary income or what you’d owe on a 12-year fixed plan adjusted for income, and forgiveness comes after 25 years. ICR does not require a hardship showing.
Here’s the timing catch. If you need to consolidate FFEL or Parent PLUS loans to reach PAYE or ICR, that consolidation loan had to be disbursed by June 30, 2026.3Federal Student Aid. Big Updates If you missed that window, your income-driven options are RAP and (for eligible loans) IBR. Parent PLUS borrowers who didn’t consolidate in time face a particularly narrow menu, because unconsolidated Parent PLUS loans aren’t eligible for IBR and new consolidations can no longer route to ICR.
FFEL borrowers who still haven’t consolidated remain limited on income-driven access. Consolidating into a Direct Consolidation Loan opens IBR or RAP, but the weighted average interest rate is rounded up to the nearest one-eighth of a percent, and consolidation generally resets your forgiveness payment count unless a specific account adjustment applies.10Federal Student Aid. What to Know About Federal Family Education Loan (FFEL) Program Loans
Graduated and Extended Repayment
Not every alternative is income-driven. If you don’t qualify for IDR or would rather not share financial information every year, two fixed-schedule plans exist.
The Graduated plan keeps the same 10-year window as Standard but starts with lower payments that step up every two years. No income verification. You’ll pay more total interest than on Standard because early payments cover less principal.
The Extended plan stretches repayment to up to 25 years, and only if you owe more than $30,000 in outstanding Direct Loans.11eCFR. 34 CFR 685.208 – Fixed Payment Repayment Plans Payments can be fixed or graduated over the longer term. The lower monthly amount comes at a cost: a $35,000 loan at 5 percent interest runs roughly $12,000 in interest over 10 years on Standard versus about $27,000 over 25 years on Extended. Neither plan offers forgiveness.
Forgiveness Timelines and the 2026 Tax Change
Each income-driven plan forgives whatever balance is left after a set number of qualifying payments:
- IBR (new borrowers after July 1, 2014): 20 years
- IBR (borrowers before July 1, 2014): 25 years
- PAYE: 20 years
- ICR: 25 years
- RAP: 30 years
Months where your calculated payment is $0 (possible under IBR, PAYE, and ICR) still count. You just need to stay enrolled and recertify on time.
The tax treatment of forgiven balances shifted in 2026. The American Rescue Plan Act’s exclusion for forgiven student loan debt expired on December 31, 2025. Starting in 2026, IDR forgiveness is generally treated as taxable income. Your servicer will issue a Form 1099-C, and the forgiven amount is added to that year’s income.12Taxpayer Advocate Service. What to Know About Student Loan Forgiveness and Your Taxes Forgiveness under PSLF is not taxable. Neither are discharges for death, total and permanent disability, or certain qualifying employment under 26 U.S.C. § 108.13Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness If your total debts exceed your assets when forgiveness hits, you may exclude some or all of the amount by filing IRS Form 982 for insolvency.
PSLF and Plan Choice
Public Service Loan Forgiveness cancels your remaining balance tax-free after 120 qualifying monthly payments while working full-time for a qualifying government or nonprofit employer. Full-time means at least 30 hours per week on average, including vacation and FMLA leave.14Federal Student Aid. Public Service Loan Forgiveness (PSLF) Certification and Application
Only payments on an income-driven plan or the Standard 10-year plan count. The Standard plan pays your balance off in exactly 120 months, so PSLF is really only useful to borrowers on an IDR plan. For pre-July 2026 loans, IBR, PAYE, ICR, and RAP all qualify. For loans disbursed on or after July 1, 2026, RAP is the only qualifying plan.
Submit employer certification annually through the PSLF Help Tool at StudentAid.gov. Waiting until you hit 120 payments to certify everything at once is how people find out years of payments didn’t qualify.
How Marriage and Filing Status Change Your Payment
If you file taxes jointly with your spouse, IBR, PAYE, and ICR use your combined household income to set the payment.15Federal Student Aid. 4 Things to Know About Marriage and Student Loan Debt If your spouse earns much more than you do, filing jointly pushes your IDR payment well above what your own income would suggest.
Married filing separately causes these plans to use only your individual income, which usually means a lower payment. It also locks you out of several tax benefits, including the student loan interest deduction, the Earned Income Tax Credit, and childcare credits. Whether the lower payment beats the lost tax benefits depends on your numbers; running both scenarios with a tax professional before you file is worth the time.
Under RAP, the payment is based on AGI, so filing separately means only your AGI counts. Check with your servicer for how RAP treats family size, since the final regulations were still being implemented at the time of writing.
Enrolling in an Alternative Plan
The fastest route is the online IDR application at StudentAid.gov, which takes about 10 minutes.16Federal Student Aid. Income-Driven Repayment (IDR) Plan It asks for your income and family size, and you can consent to let the system pull your federal tax data straight from the IRS, which avoids manual uploads and speeds review.17Federal Student Aid. Top FAQs About Income-Driven Repayment Plans
You can also download the paper Income-Driven Repayment Plan Request form and send it to your servicer.18Federal Student Aid. Income-Driven Repayment (IDR) Plan Request If your income has dropped since your last tax return, submit recent pay stubs or an employer letter; supporting documents must be dated within 90 days of your signature. If you have no taxable income, you can self-certify that on the form, which can produce a $0 payment under IBR, PAYE, or ICR. RAP’s minimum stays at $10 either way. Save your submission confirmation number in case anything gets lost.
Don’t Miss Recertification
Every income-driven plan requires you to recertify your income and family size annually. Miss the deadline and three things happen in order: your monthly payment jumps to the Standard amount for your current balance, you may be removed from your IDR plan, and unpaid interest that had been held back capitalizes into your principal.4eCFR. 34 CFR 685.209 – Income-Driven Repayment Plans
Capitalization is the lasting damage. If you’ve been on IBR for three years with $8,000 in accrued unpaid interest and miss recertification, that $8,000 gets folded into your principal, and you pay interest on the larger balance from then on.19Nelnet. Interest Capitalization Put your recertification date on your calendar and submit at least a month early. Servicer reminders help, but shouldn’t be your only safety net.
If Your Loans Are in Default
You can’t enroll in an income-driven plan while your loans are in default. The Fresh Start program that offered a streamlined path out of default ended on October 2, 2024.20Federal Student Aid. A Fresh Start for Federal Student Loan Borrowers in Default The remaining routes are loan rehabilitation or consolidation, both of which take longer. Once you’re out of default, you’re placed on Standard and can immediately apply to switch to an IDR plan, which is what most borrowers coming out of default do, since it was often the Standard payment that made the loan unmanageable to begin with.