What Are Income-Driven Repayment (IDR) Plans?
Income-driven repayment (IDR) plans are a great option if your monthly payment feels high compared to your income. These plans can make payments more manageable, help you make progress on your loan, and provide flexibility as your income changes.
There are four IDR plans available, all of which come with different features based on your needs. We explain the qualifications for each plan below. All IDR plans are eligible options to help you qualify for Public Service Loan Forgiveness (a program available to eligible borrowers who work in public/nonprofit jobs).
What Are the Four IDR Plans?
Saving on a Valuable Education (SAVE)
This repayment plan, known as Saving on a Valuable Education (SAVE, formerly the REPAYE Plan), is for certain Direct Loans only. Your monthly payment amount is based on your adjusted gross income, family size, and total eligible federal student loan balance, and will generally be 10 percent of your discretionary income. Your remaining loan balance is eligible for forgiveness after 20 or 25 years of qualifying payments, depending on your type of study (undergraduate or graduate/professional). Please note that some student loans are not eligible for this plan, including: Federal Family Education Loan Program (FFELP) Loans, Federal Direct Parent PLUS Loans, and Federal Direct Consolidation Loans containing at least one Federal Direct Parent PLUS Loan.
We’ve created a helpful video, Applying for the SAVE Plan, which walks you through the plan and how to apply.
Pay As You Earn Repayment (PAYE)
This repayment plan, known as PAYE, is for Direct Loans only. Your monthly payment amount is based on your adjusted gross income, family size, and total federal student loan balance, and will generally be 10 percent of your discretionary income. This plan requires that you have a “partial financial hardship” as defined on the Income-Driven Repayment Plan Request. Your remaining loan balance is eligible for forgiveness after 20 years of qualifying payments. You’ll need to meet the following criteria to be eligible:
- You must have at least one eligible Direct Loan first disbursed on or after October 1, 2011.
- You must have been a new borrower as of October 1, 2007, meaning you must not have had an outstanding balance on a FFELP or Direct student loan when you received a FFELP or Direct loan on or after October 1, 2007.
Income-Based Repayment (IBR)
This repayment plan, known as IBR, is for both FFELP and Direct Loans. Your payment amount is based on your adjusted gross income, family size, and total student loan debt. Your monthly payment amount will generally be 10 or 15 percent of your discretionary income (depending on your loans’ disbursement dates). This plan requires that you have a “partial financial hardship” as defined on the Income-Driven Repayment Plan Request. After 20 or 25 years (depending on the terms of your loan) of qualifying payments, your remaining loan balance is eligible for forgiveness. Parent PLUS loans and consolidation loans (which include at least one parent PLUS loan) do not qualify for this plan.
Income-Contingent Repayment (ICR)
This plan, known as ICR, is for Direct Loans only, and your payments are based on your adjusted gross income, family size, and total Direct Loan balance (excluding parent PLUS loans). Your remaining loan balance is eligible for forgiveness after 25 years of qualifying payments. Parent PLUS loans and consolidation loans containing parent PLUS loans that entered repayment before 2006 do not qualify.
What Information Do I Gather Before Applying?
There are a few things you’ll need to have ready before you complete the Income-Driven Repayment Plan Request. In this section, we'll share what those things are and tell you the process for making the request.
Here’s What You’ll Need
You’ll need your address, email address, and phone number.
Your spouse will also need to sign the electronic application unless you are separated or cannot reasonably access your spouse's income.
Please note that the SAVE Plan does not require your spouse to cosign your IDR application if you are married and you and your spouse file taxes separately.
Once you've started your Income-Driven Repayment Plan Request online, you'll be linked to the IRS Data Retrieval Tool. It's the easiest way to access and transfer your IRS tax return information. Using the online tool helps ensure your information is complete and that processing will be timely.
Once you're on the IRS website, you'll be asked to enter personal information to display your IRS tax return information. You'll then be able to easily transfer your information from the IRS website and return to your Income-Driven Repayment Plan Request on the StudentAid.gov website.
If your income is significantly different from your most recently filed tax return, after completing the electronic application, you're required to provide Nelnet with proof of your current dated gross income (before taxes). Proof of income needs to be from all sources (e.g., wages, unemployment, dividend income, interest income, tips, alimony, etc.). Acceptable documents include a pay stub or a signed letter from your employer(s) on company letterhead. Documents must be dated in the last 90 days and include the following:
- Your first and last names along with your SSN or Nelnet account number
- Information on how often you are paid
Do not report untaxed income such as Supplemental Security Income, child support, or federal and state public assistance.
If you decide to complete the paper Income-Driven Repayment Plan Request, you'll need to provide a copy of your most recent federal tax return or the income documentation noted above.
How Do I Apply?
You can apply for income-driven repayment plans quickly and conveniently at StudentAid.gov/idr or, if you prefer, on Nelnet.com. On Nelnet.com, just log in to your online account and select Repayment Options & Resources from the menu. Choose "My payments are too high for my income," then "income-driven" to start the process. The process takes only a few minutes to complete.
What Is Recertification?
Since circumstances can change from one year to the next, you must recertify your information annually to continue under an IDR Plan. This information includes income and family size. A change in one or both of these variables can change your monthly payment amount. Don’t forget to submit the applicable documentation each year before your recertification date.
Go to StudentAid.gov/idr to complete the recertification process.
Please note that under the SAVE Plan, auto-recertification will be available in July 2024. If you apply electronically in August 2023 or later and you agree to securely share your tax information, then your plan will be recertified automatically the next time your recertification is due.