Income-Driven Repayment (IDR) Plans and 2026 Changes

Federal student loan repayment changed significantly in 2026, leaving borrowers with new plan options, updated eligibility rules, and important deadlines to understand. This guide explains how income-driven repayment (IDR) works, which plans are currently available, and how to decide whether IDR fits your financial situation.

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What is income-driven repayment?

Income-driven repayment plans are designed to make federal student loan payments more affordable by tying monthly payments to a borrower’s income and family size. Current IDR plans include:

• Repayment Assistance Plan (RAP)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)
• Pay As You Earn (PAYE)

Borrowers must apply for an IDR plan, and payment calculations vary by plan. After completing the required repayment term, any remaining eligible balance may be forgiven.

Which IDR plans are currently available?

Recent changes to federal student loan repayment have affected which income-driven repayment plans borrowers can choose. The table below compares each plan’s eligibility requirements, monthly payment calculation, forgiveness timeline and current status.

Which IDR plans cover parent PLUS loans?

Parent PLUS loans have fewer repayment options than federal loans students take out themselves. Available plans depend largely on when the parent borrowed or consolidated:

• Parent loans consolidated before July 1, 2026: Borrowers may continue using ICR until the plan ends on July 1, 2028. Eligible borrowers may then transition to IBR.
• Parent loans disbursed on or after July 1, 2026: Borrowers generally qualify only for the Tiered Standard Repayment Plan.

“Parent PLUS loan borrowers are not eligible for RAP, just the new TieredStandard Repayment plan, which is similar to the old extended repayment plans,” says Mark Kantrowitz, nationally recognized financial aid expert and author. 

How did IDR change in 2026?

The One Big Beautiful Bill Act, signed into law in 2025, overhauled federal student loan repayment by introducing a new income-driven plan and beginning the phaseout of several existing plans.

RAP became available

The Repayment Assistance Plan became available on July 1, 2026. Unlike older IDR plans that generally use a fixed percentage of discretionary income, RAP payments range from 1% to 10% of adjusted gross income, depending on how much the borrower earns.

Other key RAP features include:

• Payments start at $10: Borrowers with an AGI of $10,000 or less pay at least $10 per month.
• Payments aren’t capped: Higher-income borrowers could owe more under RAP than under a fixed-payment plan.
• Unpaid interest is waived: If the required payment doesn’t cover all monthly interest, the remaining interest is waived.
• Borrowers receive principal assistance: If an on-time payment reduces the principal by less than $50, the government contributes the difference, up to $50.
• Forgiveness takes 30 years: Any remaining eligible balance may be forgiven after 30 years of qualifying payments.
• Payments can count toward PSLF: RAP is an eligible repayment plan for Public Service Loan Forgiveness.

RAP is the only income-driven option for borrowers who receive a new federal student loan, including a consolidation loan, on or after July 1, 2026. Borrowers whose loans were all disbursed before that date may still qualify for certain older repayment plans.

Older IDR plans are ending

PAYE and ICR remain temporarily available to eligible borrowers, but enrollment closes July 1, 2027. Both plans will be eliminated on July 1, 2028. Borrowers enrolled in those plans will need to move to RAP, IBR or another repayment plan for which they qualify.

IBR will remain available to eligible borrowers who don’t receive a new federal loan on or after July 1, 2026.

See Also: IBR vs. RAP: Which Repayment Plan Is Best for You?

Pros and cons of IDR plans

Details on the pros

• May reduce monthly payments: IDR plans base payments on income and family size, which may make monthly payments more manageable than under a fixed repayment plan. 
• Interest assistance under RAP: RAP waives any unpaid monthly interest after a borrower makes the full required on-time payment. This prevents the balance from growing when the payment doesn't cover all accrued interest. 
• Offers a path to loan forgiveness: Borrowers may have any remaining loan balance forgiven after making on-time payments for the IDR plan’s required term, generally 20 to 30 years, depending on the plan. 

Details on the cons

• Won’t always result in lower payments: IDR payments can increase as a borrower’s income rises, and RAP and ICR don’t cap payments at the amount due under the 10-year Standard plan. Some borrowers may pay more each month than they would under a fixed repayment plan. 
• Must recertify each year: Borrowers must update their income and family size each year to remain eligible for IDR.  
• May create a tax liability: Starting in 2026, IDR forgivness may be treated as taxable income under federal or state law.  

Is IDR right for you?

An income-driven repayment plan may be a good fit if your federal student loan payments are difficult to manage under a fixed repayment plan. IDR may be worth considering if you:

• Can’t afford your payments under the Standard Repayment Plan 
• Are at risk of student loan default
• Lose your job or have another major life event
• Have a student loan balance exceeds your income 
• Are pursuing Public Service Loan Forgiveness (PSLF)

“IDR can help borrowers manage their cash flow, and even offer an opportunity for forgiveness, whether time-based or PSLF,” says Jack Wang, financial aid adviser and host of the Smart College Buyer podcast. “But it requires people to think about their goals around their debt, their overall finances, and tax-related strategies.”