What’s an IDR Payment Plan?

Income-Driven Repayment (IDR) plans are a category of student loan repayment plans available to borrowers once they enter repayment. They differ from Fixed Payment plans—Standard, Graduated, and Extended—which have predetermined payment amounts that the borrower cannot change. On an IDR plan, by contrast, the amount they are required to pay is calculated as a percentage of their discretionary income, based on their salary and certain other factors. This amount is recalculated every year to ensure that percentage remains accurate. Borrowers can also have their payment recalculated if their income goes down, so it doesn’t become unaffordable and they default.

Three IDR Plans, but only one is right for your student loans

There are three IDR plans available to borrowers, each with slightly different rules, such as who can qualify for it and how much they would pay each month. Applications are no longer available for the SAVE plan, which is currently being debated in court.

PAYE (Pay As You Earn)

• Available to borrowers with Direct Loans, Direct PLUS Loans, and/or Direct Consolidation Loans after October 1, 2007.
• Not available for Parent PLUS Loans, or for Direct Consolidation Loans that include PLUS or FFEL loans made to parents
• Monthly payment is 10% of discretionary income, capped at the amount you would pay on the Standard 10-year plan

IBR (Income-Based Repayment)

• Available to borrowers with Direct Loans, Stafford Loans, Direct PLUS Loans, FFEL PLUS Loans, and/or Direct Consolidation Loans
• Not available for Parent PLUS Loans, or for Direct Consolidation Loans that include PLUS or FFEL loans made to parents
• Monthly payment is 10–15% of discretionary income (depending on when your loans originated), capped at the amount you would pay on the Standard 10-year plan

ICR (Income-Contingent Repayment)

• Available to borrowers with Direct Loans, Direct PLUS Loans, and/or Direct Consolidation Loans.
• The only type of IDR plan available for Parent PLUS Loans, or for Direct Consolidation Loans that include PLUS or FFEL loans made to parents
• Monthly payment is 20% of discretionary income, capped at the amount you would pay a fixed 12-year fixed payment plan

If you applied for the SAVE plan, you should have been placed in administrative forbearance. No interest is accumulating, and no payments are due, but even if you made payments now, they would not count for PSLF due to the forbearance. A coalition of student loan advocates, including Navigate, have urged the Department of Education to change the forbearance so that months in forbearance count for PSLF, and we hope that they will resolve this quickly and positively.

If you have questions about payment plans (Do I have the right one? How do I get one? Can I change plans? Should I switch from SAVE?), give us a call. We’re here to help you get on track by finding the right strategy for your repayment journey, which starts with finding the right plan for you.