To qualify for Income-Based Repayment, you need eligible federal student loans, a completed application on studentaid.gov, and verified income information from the IRS. As of July 2025, the One Big Beautiful Bill Act removed the longstanding requirement that you show a “partial financial hardship” to enroll, so IBR is now open to virtually any borrower with eligible federal loans. The plan caps your monthly payment at 10% or 15% of your discretionary income, depending on when you first borrowed, and forgives any remaining balance after 20 or 25 years.
Which Loans Are Eligible
Direct Loans are the clean case. If your loans were issued through the William D. Ford Direct Loan Program, they already qualify for IBR with no extra steps. That covers Direct Subsidized and Unsubsidized Loans, Direct Graduate PLUS Loans, and Direct Consolidation Loans.
Federal Family Education Loan (FFEL) Program loans work differently. Most FFEL loans qualify for only one income-driven plan on their own, so to reach IBR you have to consolidate them into a Direct Consolidation Loan first. Federal Perkins Loans follow the same rule: they must be consolidated into a Direct Consolidation Loan to receive any credit toward income-driven repayment or forgiveness.1Federal Student Aid. What to Know About Federal Family Education Loan (FFEL) Program Loans2Federal Student Aid. Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness
Parent PLUS Loans need an extra step. These loans are not directly eligible for IBR, but consolidating them into a Direct Consolidation Loan makes them eligible for the Income-Contingent Repayment (ICR) plan. Under the new law, a Parent PLUS borrower who enrolls in ICR and makes at least one full payment can then switch into IBR.3Federal Student Aid. One Big Beautiful Bill Act Updates That is a meaningful change from the old rules, where consolidated Parent PLUS debt was permanently stuck on ICR.
Private student loans do not qualify for IBR under any circumstances. IBR is a federal program tied to federal loan authority.
The 2026 Consolidation Deadline
If you hold FFEL, Perkins, or Parent PLUS loans and want IBR access, your consolidation loan must be disbursed no later than June 30, 2026. A consolidation loan issued on or after July 1, 2026, will not be eligible for IBR, ICR, or any of the legacy income-driven plans.3Federal Student Aid. One Big Beautiful Bill Act Updates Processing takes time, so the Department of Education has recommended applying for consolidation well before that cutoff.
The same July 1, 2026 line applies even if you already have Direct Loans. If you receive a disbursement on any new loan or new consolidation loan on or after that date, you lose access to IBR, ICR, and PAYE, even if you were previously enrolled.3Federal Student Aid. One Big Beautiful Bill Act Updates A parent who takes out a new Parent PLUS loan after July 1, 2026, would forfeit IDR eligibility on their existing loans as well. Treat this deadline as immovable when deciding whether to consolidate or take out any new federal loan.
The Partial Financial Hardship Test Is Gone
Before the One Big Beautiful Bill Act, you could only enroll in IBR if your calculated IBR payment was less than what you would owe on a standard 10-year repayment plan. That test was called “partial financial hardship,” and it kept higher earners out of the plan. The new law eliminates it entirely. Any borrower with eligible loans can now enroll.3Federal Student Aid. One Big Beautiful Bill Act Updates
Your monthly payment is still capped at the standard 10-year amount. IBR will never charge you more than the standard plan would, so for borrowers whose income-based calculation exceeds that number, IBR simply defaults to the lower standard payment.
How Your Payment Is Calculated
Your IBR payment depends on two numbers: your discretionary income and the percentage rate tied to when you first borrowed.
Discretionary income equals your adjusted gross income (AGI) minus 150% of the federal poverty guideline for your family size. For 2026, the poverty guideline for a single person is $15,650, making 150% equal to $23,475. For a family of four, the guideline is $32,150, so 150% is $48,225. Everything you earn above that threshold counts as discretionary income.
The percentage applied depends on your borrowing history:
- Borrowed before July 1, 2014: 15% of discretionary income, with forgiveness after 25 years of qualifying payments.
- First borrowed on or after July 1, 2014 (or had no outstanding balance when you received a new loan after that date): 10% of discretionary income, with forgiveness after 20 years.3Federal Student Aid. One Big Beautiful Bill Act Updates
That annual figure is divided by 12 to get your monthly payment.
When Your Payment Is Zero
If your AGI is at or below 150% of the poverty line for your family size, your discretionary income is zero and your monthly payment is $0. For a single borrower in 2026, that means earning roughly $23,475 or less results in no required payment. Payments of $0 still count toward your forgiveness timeline, so low income is never a reason to avoid enrolling.
Family Size
Family size directly shifts the poverty line threshold upward, which reduces your calculated payment. Everyone who lives in your household and receives more than half their support from you counts, including children, a spouse, and other dependents.4Federal Student Aid. Has Your Family Size Changed? (2025-26) A single borrower earning $40,000 has discretionary income of $16,525 ($40,000 minus $23,475). The same borrower with a family of four has discretionary income of zero, because $40,000 falls below the $48,225 threshold. Reporting your full household size accurately is one of the simplest ways to lower your payment.
Married Filing Choice
If you are married, how you file your federal taxes changes whose income goes into the IBR calculation. Under IBR, filing separately from your spouse means only your individual income is used to determine your payment.5Federal Student Aid. 4 Things to Know About Marriage and Student Loan Debt Filing jointly combines both incomes, which can push your discretionary income much higher.
The tradeoff is real. Filing separately often means losing education tax credits, the student loan interest deduction, and other tax benefits reserved for joint filers. For some couples the IBR savings outweigh the lost deductions; for others, filing jointly and accepting a higher student loan payment is cheaper overall. Run the numbers both ways before tax season, ideally with tax software or a professional.
How to Apply
The application is at studentaid.gov/idr/ and requires a verified FSA ID to log in. Your FSA ID is the username and password combination you use across all Department of Education online systems, including FAFSA and loan management.6Federal Student Aid. Creating and Using the FSA ID If you do not have one, create it at studentaid.gov before starting.
Once logged in, you will be prompted to grant consent for the system to import your tax information directly from the IRS. This automated transfer pulls your AGI and other relevant data into the application in real time, and for privacy reasons the imported figures will not be displayed on screen. If your income has changed significantly since your last tax return, you can decline the automatic import and upload alternative documentation such as recent pay stubs. If you currently have no income, you can self-certify that directly on the application.7Federal Student Aid. Income-Driven Repayment (IDR) Plan Request
The form will also ask for your family size, marital status, and filing status as of the date you complete it. Your spouse’s information may be required depending on how you file taxes. Double-check every field against your most recent tax return or pay records. Mismatches between what you enter and what the IRS reports are the most common cause of delays.
After you sign and submit electronically, the application goes to your loan servicer for processing. Servicers may place you into a processing forbearance for up to 60 days while they verify your information and calculate your new payment. Once processing finishes, your servicer sends a disclosure statement showing your new monthly payment and the date the revised schedule takes effect. If the amount looks wrong, contact your servicer immediately; errors in family size or income data can usually be corrected without reapplying.
Recertifying Every Year
Qualifying for IBR is not a one-time event. Every year, you must recertify your income and family size with your loan servicer, even if nothing has changed. Your servicer will send a notification when your deadline approaches, and you will submit a new IDR application with updated income documentation.8MOHELA. Income-Driven Repayment (IDR) Plans
Missing the recertification deadline is one of the most expensive mistakes on IDR. If your paperwork is not received on time, your monthly payment stops being income-based and reverts to the standard 10-year amount calculated from the balance you owed when you first entered the plan. Any unpaid accrued interest may also be capitalized, meaning it is added to your principal and starts generating interest of its own.8MOHELA. Income-Driven Repayment (IDR) Plans Set a calendar reminder at least 60 days before your annual deadline. The recertification uses the same studentaid.gov portal and the same IRS data import as your original application.