IBR vs. ICR vs. PAYE vs. REPAYE: complete comparison
IBR, ICR, PAYE, and SAVE (formerly REPAYE) all cap federal student loan payments based on your income and family size, but they differ significantly in eligibility requirements, payment calculations, spousal income treatment, and forgiveness timelines. For families, this choice impacts monthly household cash flow and tax filing strategies; for students and graduates, it determines monthly affordability and the total cost of the loan over time.
Choosing the wrong plan can result in paying hundreds of dollars more per month than necessary or extending your repayment timeline by five years or more. In this guide, you will learn exactly how each plan calculates payments, which loan types qualify for which options, how marriage affects your payment amount, and how to use a decision framework to select the best path for your financial situation.
How income-driven repayment plans work
Before comparing the specific plans, it is helpful to understand the mechanics they all share. Unlike standard repayment plans that calculate payments based on how much you owe, all Income-Driven Repayment (IDR) plans calculate payments based on how much you earn. The goal is to ensure your monthly bill is affordable relative to your income and family size.
These plans define “affordability” using your discretionary income. This is the difference between your annual income and a percentage of the federal poverty guideline for your state and family size. The plans protect a certain amount of your income for basic necessities, and your payment is a percentage of what remains.
All four plans—Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE, formerly REPAYE)—offer loan forgiveness on any remaining balance after a set repayment period, typically 20 or 25 years. To maintain eligibility, borrowers must recertify their income and family size annually. Additionally, payments made under any of these plans count toward the 120 payments required for Public Service Loan Forgiveness (PSLF).
Quick comparison: IBR, ICR, PAYE, and REPAYE at a glance
The following table provides a direct comparison of the four major income-driven plans. Reviewing these key differences will help you identify which plans you may be eligible for and which terms are most favorable for your financial goals.
| Plan Name | Payment Percentage | Discretionary Income Protection | Repayment Period | Spousal Income Treatment | Interest Subsidy |
|---|---|---|---|---|---|
| SAVE (formerly REPAYE) | 5% (undergrad) / 10% (grad) / Weighted average | 225% of poverty guideline | 20 years (undergrad only) or 25 years (grad loans) | Always included (even if filing separately) | 100% of unpaid interest covered |
| PAYE | 10% | 150% of poverty guideline | 20 years | Excluded if filing separately | 100% on subsidized loans for 3 years |
| IBR | 10% (new borrowers) or 15% (older loans) | 150% of poverty guideline | 20 years (new) or 25 years (old) | Excluded if filing separately | 100% on subsidized loans for 3 years |
| ICR | 20% OR fixed 12-year payment (whichever is less) | 100% of poverty guideline | 25 years | Always included (even if filing separately) | None |
Source: StudentAid.gov (rules effective July 1, 2025–June 30, 2026)
Note on “New Borrowers” for IBR: According to StudentAid.gov, you are considered a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan when you received a Direct Loan on or after July 1, 2014.
Why it matters
The difference in “Discretionary Income Protection” is substantial. A plan protecting 225% of the poverty line (SAVE) results in a much lower monthly payment than a plan protecting only 100% (ICR). Furthermore, if you are pursuing Public Service Loan Forgiveness, choosing the plan with the lowest monthly payment maximizes the amount eventually forgiven tax-free.
Income-Based Repayment (IBR) explained
Income-Based Repayment (IBR) is often considered the “original” modern IDR plan and remains a vital option for borrowers with older loans. To qualify for IBR, you must demonstrate a “partial financial hardship.” This means the annual amount you would pay under the Standard Repayment Plan (10-year term) exceeds what you would pay under IBR rules.
According to StudentAid.gov, IBR has two sets of terms depending on when you borrowed. For new borrowers on or after July 1, 2014, payments are capped at 10% of discretionary income, and forgiveness occurs after 20 years. For those who borrowed before that date, payments are 15% of discretionary income, and forgiveness takes 25 years. In both cases, payments are calculated based on income exceeding 150% of the federal poverty guideline.
A distinct advantage of IBR is its eligibility criteria regarding loan types. It is the only income-driven plan available for Federal Family Education Loan (FFEL) Program loans without requiring consolidation into a Direct Loan. However, Parent PLUS loans are not eligible for IBR. Additionally, IBR offers a partial interest subsidy: the government pays the interest on subsidized loans for the first three consecutive years if your monthly payment doesn’t cover it.
Income-Contingent Repayment (ICR) explained
Income-Contingent Repayment (ICR) is the oldest of the income-driven plans and generally requires the highest monthly payments. However, it fills a critical gap in the federal loan landscape. ICR is the only income-driven repayment option available for Parent PLUS loan borrowers, provided they first consolidate their Parent PLUS loans into a Direct Consolidation Loan.
Under ICR, your monthly payment is the lesser of two amounts: 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income. “Discretionary income” for ICR is defined as income above 100% of the poverty guideline, which offers less protection than the 150% or 225% offered by other plans.
Because there is no “partial financial hardship” requirement, ICR is also a fallback option for high earners who want to lower payments slightly but don’t qualify for IBR or PAYE. The repayment period is 25 years for all borrowers. Unlike the other plans, ICR offers no interest subsidy; if your payment doesn’t cover accruing interest, that interest is added to your principal balance annually (capitalized) until the balance reaches 10% higher than the original amount.
Pay As You Earn (PAYE) explained
Pay As You Earn (PAYE) is designed for “new borrowers” and offers terms that are generally more favorable than IBR and ICR. According to StudentAid.gov, to qualify, you must be a new borrower as of October 1, 2007, and must have received a disbursement of a Direct Loan on or after October 1, 2011. Like IBR, you must also demonstrate a partial financial hardship to enroll.
PAYE caps payments at 10% of discretionary income (income above 150% of the federal poverty guideline) and offers forgiveness after 20 years. A key safety feature of PAYE is that your required monthly payment will never exceed what you would have paid under the 10-year Standard Repayment Plan, regardless of how much your income increases in the future.
One of the strongest arguments for choosing PAYE applies to married borrowers. If you are married but file your taxes separately, PAYE allows you to exclude your spouse’s income from your payment calculation. This can result in significantly lower monthly payments compared to plans that always include spousal income. While PAYE is limited to Direct Loans only, older FFEL loans can be made eligible through consolidation if you meet the “new borrower” time constraints.
REPAYE and SAVE plan explained
The REPAYE (Revised Pay As You Earn) plan was officially replaced and transformed into the SAVE (Saving on a Valuable Education) plan in 2023. This plan represents the most generous repayment terms currently offered by the federal government. According to the U.S. Department of Education, as of July 2024, the SAVE plan provides the lowest monthly payments for the vast majority of borrowers.
The SAVE plan protects more of your income than any other option. According to StudentAid.gov, it defines discretionary income as the amount you earn above 225% of the federal poverty guideline. For undergraduate loans, payments are capped at just 5% of discretionary income. For graduate loans, the cap is 10%. Borrowers with a mix of both pay a weighted average between 5% and 10%.
A major benefit of SAVE is its interest subsidy. If your calculated monthly payment is not enough to cover the interest that accrues that month, the government covers 100% of the remaining interest. This prevents your balance from growing while you are in repayment. However, SAVE has a distinct trade-off for married couples: it always includes your spouse’s income in the payment calculation, regardless of whether you file taxes jointly or separately. Note that as of early 2025, the SAVE plan has faced various legal challenges; borrowers should check StudentAid.gov for the most current implementation status.
How marriage affects your IDR plan choice
For married borrowers, the treatment of spousal income is often the deciding factor in choosing a repayment plan. If you file a joint tax return, all income-driven plans will use your combined household income to calculate your monthly payment. However, if you file taxes separately, the plans treat your spouse’s income differently.
Plans that allow you to exclude spousal income: IBR and PAYE allow you to exclude your spouse’s income from the calculation if you file strictly separate tax returns. This strategy can drastically lower your monthly student loan bill if your spouse is a high earner or if you both have significant debt.
Plans that always include spousal income: SAVE (formerly REPAYE) and ICR generally count your spouse’s income regardless of your tax filing status. This means filing separately usually does not help lower your payments under these plans, and you still lose the tax benefits of filing jointly.
This creates a strategic trade-off. Filing taxes separately often results in a higher total tax bill because you lose access to certain deductions and credits. You must calculate whether the savings on your monthly student loan payments under IBR or PAYE outweigh the increased tax liability. If both spouses have student loans, the SAVE plan may still be advantageous because it accounts for both spouses’ debt loads when calculating the household payment.
Which loan types qualify for each plan
Not all federal loans are eligible for every repayment plan. Your loan type acts as a gatekeeper for your options. The most common limitation involves older FFEL Program loans and Parent PLUS loans.
The following table outlines general eligibility. Note that “Direct Loans” refers to the William D. Ford Federal Direct Loan Program.
| Loan Type | IBR | ICR | PAYE | SAVE |
|---|---|---|---|---|
| Direct Subsidized/Unsubsidized | Yes | Yes | Yes | Yes |
| Direct PLUS (Grad Student) | Yes | Yes | Yes | Yes |
| Direct PLUS (Parent) | No | Yes* | No | No |
| FFEL Program Loans | Yes | Yes* | No** | No** |
| Perkins Loans | No** | No** | No** | No** |
Source: StudentAid.gov (as of January 2025). *Requires consolidation into a Direct Consolidation Loan. **Requires consolidation to become eligible.
If you have FFEL or Perkins loans and want to access PAYE or SAVE, you must consolidate them into a Direct Consolidation Loan. You can learn more about this process in our guide to federal loan consolidation. Private student loans are never eligible for federal income-driven repayment plans.
Decision framework: choosing the right plan for your situation
With four different plans and various rules, selecting the right one can feel overwhelming. Use this decision framework to narrow down the best option for your specific financial circumstances.
Your decision is straightforward. You generally cannot use IBR, PAYE, or SAVE. Your only path to an income-driven plan is to consolidate your Parent PLUS loans into a Direct Consolidation Loan and then enroll in ICR.
The SAVE plan is likely your best option. It offers the lowest payment calculation (5% of discretionary income), the highest income protection (225% of poverty guideline), and the most generous interest subsidy. Unless you have very specific reasons to avoid it, SAVE usually provides the lowest monthly cost.
Compare PAYE (if eligible) or IBR against SAVE. Run the numbers to see if filing taxes separately and choosing PAYE/IBR to exclude your spouse’s income saves you more money than the tax penalty of filing separately. If you stay on SAVE, your spouse’s high income will likely result in a much higher monthly payment.
If you are a “new borrower” (post-2011), PAYE is often superior to IBR because it has a 20-year forgiveness timeline rather than 25. Compare PAYE against SAVE; while SAVE offers an interest subsidy, PAYE offers a cap on payments (never more than the standard plan) and forgiveness after 20 years for grad loans, whereas SAVE requires 25 years for graduate debt.
Why it matters
Choosing the optimal plan can save you thousands of dollars in interest over the life of the loan or result in loan forgiveness five years earlier. For Public Service Loan Forgiveness (PSLF) candidates, every dollar saved on monthly payments is a dollar that will eventually be forgiven tax-free.
How to apply for and switch between IDR plans
Applying for an income-driven repayment plan is a standardized process managed through the Federal Student Aid website. You do not need to pay a third-party company to do this for you.
To apply, submit the Income-Driven Repayment Plan Request form online at StudentAid.gov. You can choose a specific plan (like SAVE or PAYE) or select the option for your loan servicer to place you on the plan with the lowest monthly payment. You will need to provide documentation of your income, which can usually be done automatically using the IRS Data Retrieval Tool during the application. If your income has dropped significantly since your last tax return, you can submit alternative documentation, such as recent pay stubs.
Processing typically takes 2–4 weeks. During this time, you should continue making your regular payments unless your servicer grants a forbearance. If you are already on a plan and want to switch—for example, moving from IBR to SAVE—you can submit a new request at any time. There is no penalty for switching plans, though interest may capitalize depending on the specific plans involved.
If you find that even the lowest IDR payment is still unmanageable, or if you have private loans that don’t qualify for these federal programs, you may need to look at other strategies to bridge the gap.
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Annual recertification: what all plans require
Enrolling in an IDR plan is not a “set it and forget it” decision. All four plans—IBR, ICR, PAYE, and SAVE—require you to recertify your income and family size every single year. Your loan servicer will typically notify you about 90 days before your deadline.
It is critical that you do not miss this deadline. If you fail to recertify on time, your payment will revert to the Standard Repayment Plan amount, which is often much higher. Additionally, for some plans, missing the deadline triggers the capitalization of unpaid interest, meaning that interest is added to your principal balance, causing you to pay interest on interest moving forward.
You do not have to wait for the annual deadline to update your information. If you lose your job or your income drops significantly mid-year, you can submit a request to recalculate your payment immediately. This ensures your payment always reflects your current financial reality.
Frequently asked questions
For most undergraduate borrowers, the SAVE plan offers the lowest monthly payment because it caps payments at 5% of discretionary income and protects 225% of the federal poverty guideline. However, for married borrowers filing separately, PAYE or IBR might offer a lower payment by excluding spousal income.
Yes, you can switch between income-driven repayment plans at any time by submitting a new request on StudentAid.gov. There is no penalty for switching, but be aware that unpaid interest may capitalize (be added to your principal) when you leave the IBR plan.
Simply enrolling in an IDR plan does not hurt your credit score. In fact, because these plans lower your required monthly payment, they can make it easier to pay on time, which positively impacts your credit history. However, a lower payment may result in a higher overall loan balance over time, which is visible on your credit report.
All four plans (IBR, ICR, PAYE, and SAVE) qualify for Public Service Loan Forgiveness. The “best” plan for PSLF is generally the one that yields the lowest monthly payment, as this maximizes the amount of money eventually forgiven after 120 qualifying payments.
Under the SAVE plan, your spouse’s income is always included in the payment calculation, even if you file taxes separately. Under PAYE (and IBR), you can choose to exclude your spouse’s income from the calculation if you file a separate federal tax return.
Navigating federal repayment options requires balancing immediate affordability with long-term costs. As you evaluate IBR, ICR, PAYE, and SAVE, keep these core takeaways in mind:
- Loan types dictate options: Parent PLUS borrowers are generally limited to ICR (after consolidation), while SAVE offers the most generous terms for undergraduate Direct Loans.
- Marriage matters: If you are married, the choice between filing jointly or separately can swing your monthly payment by hundreds of dollars. PAYE and IBR offer flexibility here that SAVE does not.
- Recertification is mandatory: You must update your income information every year to keep your affordable payment and avoid interest capitalization.
- PSLF alignment: If you are pursuing forgiveness, your goal is the lowest possible monthly payment, making the choice of plan even more critical.
To move forward, log in to StudentAid.gov and use the Loan Simulator tool to see real-time estimates for your specific debt portfolio.
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References and resources
For current applications, interest rates, and official guidelines, consult these primary sources:
- StudentAid.gov – Income-Driven Repayment Plans: The official portal for plan details and applications.
- StudentAid.gov – Loan Simulator: A tool to estimate payments under different plans.
- Consumer Financial Protection Bureau (CFPB): Independent guidance on managing student debt.
- Federal Student Aid Contact Center: Direct support for questions regarding your loans.
