Income-Driven Repayment Plans Compared: SAVE, PAYE, IBR, and ICR

If your student loan servicer dashboard still lists the SAVE Plan, here is the first thing you need to know: SAVE is gone. A federal court order that took effect on March 10, 2026 ended the SAVE Plan, and it is no longer available to any borrower. If you were on SAVE, you are likely sitting in forbearance right now, and you need to pick a new repayment plan.

The good news is that the rest of the income-driven repayment landscape survived the court battles, and a brand-new plan arrived on July 1, 2026. This guide compares every option on the table today: PAYE, IBR, and ICR, plus the new Repayment Assistance Plan (RAP), with SAVE covered only as history so you understand what changed.

Key Takeaways

• The SAVE Plan ended on March 10, 2026 by federal court order and is no longer available. Borrowers in SAVE-related forbearance must choose a new plan or be placed into a Standard or Tiered Standard Plan.
• PAYE, IBR, and ICR survived the litigation and remain available, but PAYE and ICR are scheduled to retire no later than July 1, 2028.
• The new Repayment Assistance Plan (RAP), launched July 1, 2026, bases payments on a percentage of total adjusted gross income rather than discretionary income, with a 30-year repayment term and a $10 minimum payment.
• RAP is the only income-driven plan available for federal loans first disbursed on or after July 1, 2026.
• Forgiven balances under IDR plans may be taxable income at the federal level, since the tax exclusion for discharged student loan debt covered only discharges through 2025.

What happened to SAVE

The SAVE Plan, launched in 2023 with the lowest payments of any income-driven plan, spent most of its life in litigation. That litigation ended with a federal court order that terminated the plan effective March 10, 2026. The Department of Education has confirmed that SAVE is no longer available, that borrowers cannot apply for it or recertify in it, and that borrowers currently in SAVE-related forbearance must select a different repayment plan.

If that describes you, your servicer is required to notify you and give you time to choose. Borrowers who do not select a plan are being moved to the Standard Repayment Plan or a new Tiered Standard Plan, where payments are generally higher and fixed over a set term. Choosing an income-driven plan yourself, rather than accepting the default placement, is almost always the better move. The comparison below covers what you can actually choose.

The plans compared

Plan	Monthly payment formula	Forgiveness timeline	Who qualifies	Status
PAYE	10% of discretionary income, capped at the 10-year Standard payment amount	20 years	New borrowers: first Direct Loan on or after Oct. 1, 2007 with a disbursement on or after Oct. 1, 2011; loans disbursed before July 1, 2026	Available; retires no later than July 1, 2028
IBR	15% of discretionary income (10% for new borrowers whose first loan was on or after July 1, 2014), capped at the 10-year Standard payment amount	25 years (20 years for new borrowers)	Direct Loans and FFEL Program loans	Available; survives long term
ICR	The lesser of 20% of discretionary income or a 12-year fixed payment adjusted for income	25 years	Direct Loans only; FFEL loans must first be consolidated into a Direct Consolidation Loan	Available; retires no later than July 1, 2028
RAP	1 to 10% of AGI (one-twelfth per month), with the rate rising across $10,000 income brackets, minus $50 per dependent; $10 minimum payment	30 years	Any Direct Loan borrower; the only IDR plan for loans first disbursed on or after July 1, 2026	New; launched July 1, 2026
SAVE	Historically 5% of discretionary income for undergraduate loans, 10% for graduate loans	Was 20 to 25 years	No one	Ended March 10, 2026 by court order

A few definitions help the table make sense. “Discretionary income” for PAYE, IBR, and ICR generally means your adjusted gross income above 150 percent of the federal poverty guideline for your household size. RAP works differently: it applies its percentage to your full AGI, not just the amount above a poverty threshold, which means borrowers with very low incomes still have a payment, though it can be as little as $10 a month.

The payment caps also matter. Under PAYE and IBR, your payment can never exceed what you would pay under the 10-year Standard Plan, which protects higher earners from runaway payments. ICR has no such cap on the income-based side, but its alternative 12-year fixed calculation often keeps payments lower than 20 percent of discretionary income for well-paid borrowers.

Worked examples with the same borrower

To make the formulas concrete, take a hypothetical single borrower with $50,000 in Direct Loans. The exact poverty guideline figures change yearly, so assume her discretionary income works out to $15,000 for the year. These are illustrative numbers meant to show how the formulas compare, not a quote for any real borrower.

• PAYE: 10% of $15,000 is $1,500 per year, about $125 per month, and never more than her 10-year Standard payment.
• IBR as a new borrower (first loan on or after July 1, 2014): also 10% of discretionary income, about $125 per month, with forgiveness after 20 years instead of PAYE’s 20.
• IBR as an older borrower: 15% of $15,000 is $2,250 per year, about $188 per month, with forgiveness after 25 years.
• ICR: 20% of $15,000 is $3,000 per year, about $250 per month, unless the 12-year income-adjusted fixed payment comes out lower, in which case she pays that instead.
• RAP: her payment would be a percentage of her full AGI based on her income bracket, minus $50 for each dependent, with a floor of $10 per month. Because RAP taxes the full AGI rather than just discretionary income, borrowers with incomes just above the poverty line can owe more under RAP than under PAYE or IBR, while the dependent deduction softens the bill for parents.

The pattern is clear: for a typical low-to-moderate-income borrower with older loans, PAYE or new-borrower IBR usually produces the lowest payment and the shortest path to forgiveness. RAP’s advantages show up elsewhere: it is the only IDR option for new loans, and its 30-year term with a hard $10 floor keeps payments predictable even at very low incomes.

Which plan fits which borrower

Former SAVE borrowers with pre-2026 loans and moderate incomes should look first at PAYE or IBR. PAYE offers 10 percent of discretionary income with forgiveness at 20 years, and IBR matches that payment for new borrowers with forgiveness at 20 years as well. Both count toward Public Service Loan Forgiveness if you work for a qualifying employer, so public servants do not lose PSLF progress by switching.

Borrowers with FFEL Program loans who want income-driven repayment should look at IBR, the only surviving income-based plan that accepts FFEL loans directly. ICR requires consolidating FFEL loans into a Direct Consolidation Loan first, which is still possible for loans disbursed before the July 2026 cutoff.

Borrowers taking out their first federal loans now, with disbursements on or after July 1, 2026, have no choice to make: RAP is the only income-driven plan available to them. The same is true of any borrower who wants a single plan that will still exist a decade from now, since PAYE and ICR retire by mid-2028 while IBR and RAP continue.

Parents with Parent PLUS loans face the tightest rules. Parent PLUS loans are not directly eligible for income-driven plans; historically the route was consolidating into a Direct Consolidation Loan, which could then access ICR for loans consolidated before July 1, 2026. If you hold Parent PLUS debt, check the current consolidation rules on StudentAid.gov rather than assuming the old pathways still work.

Watch-outs before you choose

Recertification is annual and non-negotiable. Every income-driven plan requires you to recertify your income and family size each year. Miss the deadline and your payment can jump to the Standard amount, and any unpaid interest may capitalize depending on the plan rules.

The tax bill at the end is real. Under current federal law, a balance forgiven after 20, 25, or 30 years of IDR payments is generally treated as taxable income. The pandemic-era federal tax exclusion for discharged student loan debt covered only discharges through 2025, so plan for a potential tax liability in the forgiveness year and consider setting aside money as that date approaches.

There is one piece of good news on interest. For Direct Loans disbursed on or after July 1, 2012 through June 30, 2028, borrowers who enroll in automatic payments by September 30, 2026 can receive a 1 percent interest rate reduction, up from the old 0.25 percent discount, which meaningfully slows balance growth on income-driven plans where payments may not cover monthly interest.

Finally, if your loans are truly unpayable even on the most generous IDR plan, bankruptcy is no longer the dead end it was once assumed to be. Our guide to discharging student loans in bankruptcy explains the undue hardship test and the 2022 federal guidance that made the process more navigable, and our Chapter 7 vs Chapter 13 comparison covers which bankruptcy chapter fits different situations.

Frequently asked questions

Can I switch income-driven plans later if my situation changes?

Generally yes. Borrowers can move between available IDR plans as circumstances change, though switching can have consequences for progress toward forgiveness and may trigger interest capitalization, so compare the trade-offs before moving.

Do payments under these plans count toward Public Service Loan Forgiveness?

Yes. Payments made under PAYE, IBR, ICR, and RAP can all count as qualifying payments toward the 120 needed for PSLF, as long as you work full time for a qualifying employer and meet the program’s other requirements.

What if my income is zero or very low?

Under PAYE, IBR, and ICR, a $0 calculated payment still counts as a qualifying payment toward forgiveness and PSLF. Under RAP there is a $10 minimum payment, so even the lowest-income borrowers pay a nominal amount each month.

I was on SAVE and did nothing. What happens to me?

Your servicer is notifying borrowers in waves and giving time to select a new plan. If you do not choose, you will be placed into the Standard Repayment Plan or the new Tiered Standard Plan, both of which typically cost more per month than an income-driven plan. Log in to your servicer account or StudentAid.gov and choose deliberately.

Are forgiven balances really taxable now?

At the federal level, the general rule is that canceled debt counts as taxable income, and the special exclusion for student loan discharges applied only through 2025. State tax treatment varies. Consult a tax professional as your forgiveness date approaches rather than assuming the old exclusion still applies.

The Bottom Line

The income-driven repayment menu is smaller than it was a year ago but clearer. SAVE is history. PAYE and ICR are on borrowed time through mid-2028. IBR remains the workhorse for older loans, and RAP is the future for new ones. If you were on SAVE, your job is simple: pick PAYE or IBR if your loans predate July 2026 and your income is modest, look at RAP if you want the plan with the longest runway, and do it before your servicer picks for you. For a broader orientation to getting out of debt, our Start Here page maps the full journey.

Sources

1. U.S. Department of Education, Federal Student Aid, Court Actions on Income-Driven Repayment Plans, confirming the March 10, 2026 termination of SAVE, the survival of IBR, ICR, and PAYE, and the July 1, 2026 launch of RAP.
2. U.S. Department of Education, Federal Student Aid, Income-Driven Repayment Plan FAQs, with the payment formulas, forgiveness timelines, eligibility rules, and retirement dates for each plan.
3. MOHELA / Federal Student Aid, SAVE Plan FAQ, on the end of SAVE, forbearance transitions, and selecting a new repayment plan.