Income-Driven Repayment Plan Chart: Payments, Caps, Forgiveness

If you are looking for an income-driven repayment plan comparison, three federal options are accepting borrowers in 2026: Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR). They all set your monthly payment as a percentage of your discretionary income, but the percentage, the slice of income they shield, the loans they accept, and the years to forgiveness are different enough that the wrong pick can cost you tens of thousands of dollars over the life of the loan.

The Three Plans at a Glance

IBR for new borrowers (first federal loan on or after July 1, 2014): 10% of discretionary income, income protected up to 150% of the Federal Poverty Guideline, forgiveness after 20 years.¹
IBR for older borrowers (borrowed before July 1, 2014): 15% of discretionary income, 150% poverty protection, forgiveness after 25 years.¹
PAYE: 10% of discretionary income, 150% poverty protection, forgiveness after 20 years.¹
ICR: 20% of discretionary income (or the payment on a 12-year fixed schedule adjusted for income, whichever is lower), income protected only up to 100% of the Federal Poverty Guideline, forgiveness after 25 years.²

You qualify as a “new borrower” for IBR if you had no outstanding federal student loan balance when you took out a new loan on or after July 1, 2014.³ Everyone else defaults to the older 15% version of IBR.

What the Percentages Actually Mean

The plan starts with your Adjusted Gross Income from line 11 of Form 1040.⁴ It then subtracts a protected amount equal to the Federal Poverty Guideline for your household, multiplied by the plan’s protection percentage. Whatever is left is your discretionary income, and the plan takes its rate off that.

For 2026 the poverty guideline is $15,960 for a single person in the 48 contiguous states and $33,000 for a family of four.⁵ Family size counts you, your spouse if filing jointly, and any dependents who receive more than half their support from you. A larger household raises the shielded amount and lowers your payment.

A Worked Example

Take a single borrower earning $45,000. On the newer IBR plan, the 150% protection works out to $15,960 × 1.5 = $23,940. Discretionary income is $45,000 − $23,940 = $21,060. Ten percent of that is $2,106 per year, or roughly $176 a month.

On ICR, the same borrower shields only 100% of the poverty line ($15,960), leaving $29,040 in discretionary income. At 20%, the annual payment is $5,808, or about $484 a month. Same income, same loans, nearly triple the payment. That gap is why ICR is generally a last resort for borrowers who can’t access anything else.

Payment Caps

PAYE and both versions of IBR cap your monthly payment at what you would owe under a standard 10-year repayment schedule based on your balance when you entered the plan.¹ If your income later climbs above the point where the formula would produce a higher number, the cap holds you to the standard payment.

ICR has no such cap. As your income grows, your ICR payment can exceed the standard 10-year amount, subject only to the plan’s own two-formula comparison.¹

Which Loans Qualify for Which Plan

Direct Subsidized and Unsubsidized Loans qualify for IBR, PAYE, and ICR. Graduate students with Direct PLUS Loans can use IBR and ICR.³

PAYE has the narrowest door. You need a Direct Loan taken on or after October 1, 2011, and you must have had no outstanding Direct or FFEL balance when you first borrowed on or after October 1, 2007. Your calculated PAYE payment also has to come in below your standard 10-year payment, or you don’t qualify.³

Parent PLUS Loans

Parent PLUS Loans cannot go on IBR or PAYE. ICR is the only income-driven option, and even that requires you to first consolidate the Parent PLUS Loan into a Direct Consolidation Loan.⁶ One trap to avoid: if you consolidate a Parent PLUS Loan together with other federal loans that would have qualified for IBR or PAYE, the combined consolidation loan loses access to those better plans. Keep Parent PLUS debt in its own consolidation.

FFEL and Perkins Loans

Older Federal Family Education Loan Program loans and Federal Perkins Loans are not directly eligible for current IDR plans. Consolidating them into a Direct Consolidation Loan opens the door.⁷ You can confirm your loan types by logging in at StudentAid.gov.

SAVE Is No Longer an Option

If you are comparing plans because you were on the SAVE Plan (formerly REPAYE), that plan was ended by a court-approved settlement in March 2026. The Department of Education is not enrolling new borrowers, has denied pending applications, and is moving former SAVE borrowers into a different plan.⁸ Time spent in the SAVE forbearance can still count toward IDR forgiveness under a separate 2023 regulatory provision.⁹ If you don’t want to wait for your servicer’s transition notice, you can contact them to switch to one of the three plans above.

Time to Forgiveness

Any balance left at the end of the repayment term is forgiven. Months where your calculated payment was $0 still count, as long as you were in an active repayment status.¹⁰ The clocks:

20 years: PAYE and IBR for new borrowers.¹
25 years: ICR and IBR for pre-2014 borrowers.¹

Public Service Loan Forgiveness runs on a much shorter track: 120 qualifying monthly payments (about 10 years) while working full-time for a qualifying government or nonprofit employer. Any IDR payment counts toward the 120, which makes IDR and PSLF a natural pairing for public-sector workers.

The Tax Bill After Forgiveness

For any federal student loan balance forgiven under an IDR plan in 2026 or later, the forgiven amount is treated as taxable income on your federal return.¹¹ The American Rescue Plan Act exclusion only covered forgiveness between January 1, 2021, and December 31, 2025, and has expired.

If $50,000 is forgiven in 2026, you’d report that as income on your 2026 Form 1040 during the 2027 filing season, taxed at your ordinary rate. Borrowers who are insolvent at the time of forgiveness (total debts exceed total assets) may exclude some or all of the amount by filing IRS Form 982. PSLF, Teacher Loan Forgiveness, and discharges for death or total and permanent disability remain tax-free.¹²

Marriage and How You File

Under PAYE, IBR, and ICR, a joint tax return puts both spouses’ incomes into the payment formula. Filing separately keeps only your income in the calculation.¹³ When one spouse earns significantly more, filing separately can cut the monthly payment sharply, but it disqualifies you from education credits and the student loan interest deduction and usually raises your combined tax bill. Run both scenarios before deciding; for borrowers with large balances, the payment savings often outweigh the tax cost.

Recertify Every Year

Every IDR plan requires annual recertification of income and family size, even if nothing has changed. Miss the deadline and two things happen: your payment jumps to the standard 10-year amount, and any accrued unpaid interest is capitalized onto your principal.¹⁴ Submitting a new IDR application will bring your payment back down, but the capitalized interest doesn’t reverse. Your servicer will send a reminder before the deadline. Don’t miss it.

1
Federal Student Aid. Income-Driven Repayment Plans
2
Federal Register. Annual Updates to the Income-Contingent Repayment (ICR) Plan Formula for 2026
3
Federal Student Aid. Top FAQs About Income-Driven Repayment Plans
4
Internal Revenue Service. Adjusted Gross Income
5
HHS ASPE. 2026 Poverty Guidelines: 48 Contiguous States
6
Consumer Financial Protection Bureau. Options for Repaying Your Parent PLUS Loans
7
Federal Student Aid. What to Know About Federal Family Education Loan (FFEL) Program Loans
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U.S. Department of Education. U.S. Department of Education Announces Next Steps for Borrowers Enrolled in Unlawful SAVE Plan
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Federal Student Aid. IDR Court Actions
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Federal Student Aid. IDR Account Adjustment
11
Taxpayer Advocate Service. What to Know about Student Loan Forgiveness and Your Taxes
12
Office of the Law Revision Counsel. 26 Code 108 – Income From Discharge of Indebtedness
13
Federal Student Aid. 4 Things to Know About Marriage and Student Loan Debt
14
MOHELA. Income-Driven Repayment (IDR) Plans