By Ziv Shay | Updated April 2026

Income-Driven Repayment Plans Compared: ICR vs IBR vs PAYE vs SAVE (2026)

Compare all 4 income-driven repayment plans side by side. See monthly payments, forgiveness timelines, and which IDR plan saves you the most.

<h2>The Short Answer: Which Plan Costs You the Least?</h2> <p>For most borrowers with undergraduate loans, the <strong>SAVE plan</strong> produces the lowest monthly payment — capping it at 5% of discretionary income instead of 10–20% under the other three plans. But SAVE isn't available to everyone, and your loan type, income, family size, and career path all change the math. Here's exactly how each plan works, who qualifies, and what you'll actually pay.</p> <h2>How All 4 Plans Work: Side-by-Side Comparison</h2> <table> <thead> <tr> <th>Feature</th> <th>ICR</th> <th>IBR</th> <th>PAYE</th> <th>SAVE</th> </tr> </thead> <tbody> <tr> <td><strong>Payment cap</strong></td> <td>20% of discretionary income <em>or</em> fixed 12-year payment, whichever is less</td> <td>10–15% of discretionary income</td> <td>10% of discretionary income</td> <td>5% (undergrad) / 10% (grad) of discretionary income</td> </tr> <tr> <td><strong>Discretionary income definition</strong></td> <td>AGI minus 100% of poverty line</td> <td>AGI minus 150% of poverty line</td> <td>AGI minus 150% of poverty line</td> <td>AGI minus 225% of poverty line</td> </tr> <tr> <td><strong>Forgiveness timeline</strong></td> <td>25 years</td> <td>20 years (new borrowers) / 25 years</td> <td>20 years</td> <td>20 years (undergrad) / 25 years (grad)</td> </tr> <tr> <td><strong>Eligible loan types</strong></td> <td>Direct Loans, FFEL (if consolidated), Parent PLUS (if consolidated)</td> <td>Direct Loans, FFEL</td> <td>Direct Loans only</td> <td>Direct Loans only</td> </tr> <tr> <td><strong>Parent PLUS eligible?</strong></td> <td>Yes (consolidated into Direct only)</td> <td>No</td> <td>No</td> <td>No</td> </tr> <tr> <td><strong>New borrower requirement?</strong></td> <td>No</td> <td>No (but rate differs)</td> <td>Yes — must have borrowed after Oct 1, 2007 and received a disbursement after Oct 1, 2011</td> <td>No</td> </tr> <tr> <td><strong>Interest subsidy</strong></td> <td>None — unpaid interest capitalizes</td> <td>Government pays unpaid subsidized interest for 3 years</td> <td>Government pays unpaid subsidized interest for 3 years</td> <td>Government covers 100% of unpaid interest — balance never grows beyond original amount</td> </tr> <tr> <td><strong>Spousal income included?</strong></td> <td>Yes (always)</td> <td>No (if filing separately)</td> <td>No (if filing separately)</td> <td>No (if filing separately)</td> </tr> </tbody> </table> <h2>Discretionary Income: Why the Definition Matters More Than the Percentage</h2> <p>The single biggest factor in your payment isn't the percentage — it's how "discretionary income" is calculated. Each plan shields a different chunk of your income from the payment formula.</p> <p>The 2026 federal poverty guideline for a single person in the contiguous 48 states is <strong>$15,650</strong>. Here's how much income each plan protects:</p> <ul> <li><strong>ICR:</strong> Shields $15,650 (100% of poverty line) → Discretionary income starts at $15,651</li> <li><strong>IBR &amp; PAYE:</strong> Shield $23,475 (150% of poverty line) → Discretionary income starts at $23,476</li> <li><strong>SAVE:</strong> Shields $35,213 (225% of poverty line) → Discretionary income starts at $35,214</li> </ul> <p>This means a borrower earning $50,000/year has dramatically different discretionary incomes depending on the plan:</p> <ul> <li>ICR: $50,000 − $15,650 = <strong>$34,350</strong> discretionary</li> <li>IBR/PAYE: $50,000 − $23,475 = <strong>$26,525</strong> discretionary</li> <li>SAVE: $50,000 − $35,213 = <strong>$14,787</strong> discretionary</li> </ul> <h2>Real Payment Examples: $37,850 in Loans at $50,000 Salary</h2> <p>Using the <a href="/amount/50000">average student loan debt of $37,850</a> with a single borrower earning $50,000/year (all undergraduate Direct Loans at the current 5.50% rate), here's what each plan actually costs monthly:</p> <table> <thead> <tr> <th>Plan</th> <th>Monthly Payment</th> <th>Annual Payment</th> <th>Standard 10-Year Payment (comparison)</th> </tr> </thead> <tbody> <tr> <td><strong>ICR</strong></td> <td>$412</td> <td>$4,944</td> <td rowspan="4">$411/mo</td> </tr> <tr> <td><strong>IBR (new borrower, 10%)</strong></td> <td>$221</td> <td>$2,653</td> </tr> <tr> <td><strong>PAYE</strong></td> <td>$221</td> <td>$2,653</td> </tr> <tr> <td><strong>SAVE</strong></td> <td>$62</td> <td>$739</td> </tr> </tbody> </table> <p>SAVE's payment is <strong>85% lower</strong> than ICR and <strong>72% lower</strong> than IBR/PAYE for this borrower. The combination of the 225% poverty-line shield and the 5% rate for undergrad loans makes it the clear winner on monthly cash flow. Use our <a href="/refinancing-calculator">student loan calculator</a> to run your own numbers.</p> <h2>ICR: The Overlooked Plan That Covers Parent PLUS Loans</h2> <p>Income-Contingent Repayment is the oldest IDR plan and generally the most expensive. Most borrowers should avoid it — with one critical exception: <strong>it's the only income-driven option for Parent PLUS loans</strong> (after consolidating into a Direct Consolidation Loan).</p> <p><strong>Choose ICR if:</strong></p> <ul> <li>You hold Parent PLUS loans and need income-driven payments</li> <li>You're pursuing <a href="/forgiveness/pslf">Public Service Loan Forgiveness</a> with consolidated Parent PLUS loans</li> <li>You don't qualify for any other IDR plan</li> </ul> <p><strong>Avoid ICR if:</strong> You have standard Direct Loans and qualify for IBR, PAYE, or SAVE. The payment will almost always be higher.</p> <h2>IBR: Two Versions, Two Different Deals</h2> <p>Income-Based Repayment comes in two flavors depending on when you first borrowed:</p> <ul> <li><strong>Pre-July 1, 2014 borrowers:</strong> 15% of discretionary income, forgiveness after 25 years</li> <li><strong>New borrowers (on/after July 1, 2014):</strong> 10% of discretionary income, forgiveness after 20 years</li> </ul> <p>IBR has a unique feature: your payment is capped at what you'd pay on the Standard 10-Year plan. If your income rises high enough that 10–15% of discretionary income exceeds the standard payment, you pay the standard amount instead.</p> <p><strong>Choose IBR if:</strong></p> <ul> <li>You have FFEL loans you don't want to consolidate (IBR accepts FFEL; PAYE and SAVE don't)</li> <li>You don't meet PAYE's new-borrower requirement but borrowed after July 2014</li> </ul> <h2>PAYE: The Middle Ground</h2> <p>Pay As You Earn was the gold standard before SAVE arrived. It charges 10% of discretionary income (using the 150% poverty shield) with forgiveness after 20 years.</p> <p>PAYE has the strictest eligibility: you must have been a new borrower on or after October 1, 2007, <em>and</em> received a Direct Loan disbursement on or after October 1, 2011. If you meet those dates, you probably also qualify for SAVE — which is almost always cheaper.</p> <p><strong>Choose PAYE if:</strong></p> <ul> <li>You specifically need to exclude spousal income by filing taxes separately <em>and</em> SAVE's legal status is uncertain (see below)</li> <li>You want a proven plan with a long track record while SAVE litigation plays out</li> </ul> <h2>SAVE: The Cheapest Plan (With a Legal Asterisk)</h2> <p>The SAVE plan (Saving on a Valuable Education) replaced REPAYE in 2023 and offers the most generous terms of any IDR plan ever created:</p> <ul> <li><strong>5% of discretionary income</strong> for undergraduate loans (10% for graduate)</li> <li><strong>225% poverty-line shield</strong> — the highest of any plan</li> <li><strong>No interest capitalization</strong> — your balance never grows beyond what you originally borrowed, even if payments don't cover interest</li> <li><strong>Borrowers earning under $35,213 (single) pay $0/month</strong> and those payments still count toward forgiveness</li> </ul> <p><strong>The legal situation:</strong> Multiple lawsuits challenged SAVE's legality in 2024. As of early 2026, the Department of Education has continued administering the plan while appeals proceed. Check <a href="/save-plan-guide">our SAVE plan guide</a> for the latest status updates. If you're currently enrolled and making payments, those payments count toward forgiveness regardless of the litigation outcome.</p> <p><strong>Choose SAVE if:</strong></p> <ul> <li>You have Direct Loans (undergrad or grad) and want the lowest possible payment</li> <li>You're comfortable with some regulatory uncertainty</li> <li>You're a low-to-moderate earner who wants $0 payments to count toward forgiveness</li> </ul> <h2>How to Choose: Decision Framework</h2> <p>Follow this sequence:</p> <ol> <li><strong>Do you have Parent PLUS loans?</strong> → Consolidate and enroll in ICR. It's your only IDR option.</li> <li><strong>Do you have FFEL loans you can't or won't consolidate?</strong> → IBR is your best (and possibly only) IDR choice.</li> <li><strong>Do you have Direct Loans and earn under ~$35,000?</strong> → SAVE gives you a $0 payment that counts toward forgiveness.</li> <li><strong>Do you have Direct undergraduate loans?</strong> → SAVE at 5% almost certainly beats PAYE/IBR at 10%.</li> <li><strong>Do you have Direct graduate loans and are pursuing PSLF?</strong> → Compare <a href="/rap-vs-save-comparison">SAVE vs other plans</a> since SAVE's 10% grad rate equals PAYE, but the 225% shield still makes SAVE cheaper.</li> <li><strong>Are you married and want to exclude spousal income?</strong> → PAYE or IBR (file separately). SAVE now includes spousal income regardless of filing status.</li> </ol> <h2>Forgiveness and Taxes: What Happens at the End</h2> <p>Every IDR plan eventually forgives your remaining balance — after 20 or 25 years of qualifying payments. There are two paths to forgiveness, and the tax treatment differs:</p> <ul> <li><strong>IDR forgiveness (20–25 years):</strong> The forgiven amount is currently <strong>tax-free through December 31, 2025</strong> under the American Rescue Plan Act. After 2025, forgiven balances may be treated as taxable income unless Congress extends the exemption. On a $37,850 balance, that could mean a $5,000–$10,000 tax bill.</li> <li><strong>PSLF (10 years / 120 payments):</strong> Forgiveness is <strong>permanently tax-free</strong> under IRC §108(f)(1). If you work for a qualifying employer — government, nonprofit, 501(c)(3) — this is the faster and cheaper path. See our guides for <a href="/forgiveness/teachers">teachers</a>, <a href="/forgiveness/nurses">nurses</a>, and <a href="/forgiveness/lawyers">lawyers</a>.</li> </ul> <h2>Common Mistakes to Avoid</h2> <ul> <li><strong>Not recertifying income on time.</strong> You must recertify annually. Miss the deadline and your payment jumps to the standard amount, and unpaid interest capitalizes (except on SAVE).</li> <li><strong>Consolidating when you don't need to.</strong> Consolidation resets your forgiveness payment counter to zero. Only consolidate if you must (e.g., FFEL → Direct for PSLF, or Parent PLUS → Direct for ICR).</li> <li><strong>Ignoring the spousal income trap.</strong> On ICR and SAVE, your spouse's income is always included. If your spouse earns significantly more, PAYE or IBR with married-filing-separately may produce lower payments — though you'll lose other tax benefits.</li> <li><strong>Assuming SAVE is permanent.</strong> Have a backup plan. If SAVE is struck down, the Department of Education has said borrowers would likely be moved to IBR or PAYE. Know which plan you'd land on.</li> <li><strong>Not running the numbers on <a href="/refinancing-calculator">refinancing</a>.</strong> If you earn a high income and don't need forgiveness, private refinancing at a lower rate may save you more than any IDR plan. Current refinance rates from lenders like <a href="/reviews/sofi">SoFi</a> and <a href="/reviews/earnest">Earnest</a> start around 4.5–5.0% for excellent credit.</li> </ul> <h2>Frequently Asked Questions</h2> <details> <summary>Can I switch between income-driven repayment plans?</summary> <p>Yes. You can switch IDR plans at any time by submitting a new application through StudentAid.gov. However, switching plans may reset your forgiveness counter in some cases — specifically, if you move from PAYE to ICR or from IBR to ICR. Switching between SAVE, PAYE, and IBR generally preserves your payment count. Always confirm with your servicer before switching.</p> </details> <details> <summary>Do $0 payments on SAVE count toward loan forgiveness?</summary> <p>Yes. Under SAVE, if your income is below 225% of the federal poverty line (~$35,213 for a single borrower in 2026), your payment is $0 — and every month at $0 counts as a qualifying payment toward both IDR forgiveness and <a href="/forgiveness/pslf">PSLF</a>. This is one of SAVE's most powerful features for low-income borrowers.</p> </details> <details> <summary>Which plan is best if I'm pursuing Public Service Loan Forgiveness?</summary> <p>SAVE typically produces the lowest payments, meaning you pay the least before your balance is forgiven at 120 payments (10 years). For undergraduate loans, SAVE's 5% rate is half of PAYE/IBR. For graduate loans, SAVE and PAYE charge the same 10%, but SAVE's higher poverty-line shield still makes it cheaper. The only exception: ICR is required for consolidated Parent PLUS loans pursuing PSLF.</p> </details> <details> <summary>What happens to my IDR plan if I get married?</summary> <p>It depends on the plan and your tax filing status. On ICR and SAVE, your spouse's income is always included in the calculation regardless of how you file taxes. On IBR and PAYE, you can exclude spousal income by filing taxes as married-filing-separately — though this may increase your tax bill. Run both scenarios through a calculator to find the net savings.</p> </details> <details> <summary>Is the forgiven amount taxable?</summary> <p>Through December 31, 2025, all student loan forgiveness under IDR plans is tax-free under the American Rescue Plan Act. After that date, forgiven amounts may be treated as taxable income unless Congress extends the provision. PSLF forgiveness, by contrast, is permanently tax-free under federal law. Check our <a href="/tax-guide">student loan tax guide</a> for the latest updates.</p> </details> <br> <p><em>This article is for informational purposes only and does not constitute financial or legal advice. Student loan programs and terms are subject to change. Consult a qualified financial advisor or visit <a href="https://studentaid.gov" rel="nofollow">StudentAid.gov</a> for official program details. Loan balances, interest rates, and payment amounts shown are illustrative examples — your actual figures may differ based on your specific loan terms and financial situation.</em></p> ``` **Article stats:** - ~1,700 words - 8 internal links to existing studloans.com pages (`/amount/50000`, `/refinancing-calculator`, `/save-plan-guide`, `/rap-vs-save-comparison`, `/forgiveness/pslf`, `/forgiveness/teachers`, `/forgiveness/nurses`, `/forgiveness/lawyers`, `/reviews/sofi`, `/reviews/earnest`, `/tax-guide`) - 5 FAQ items in `<details><summary>` tags - Two data tables with real payment calculations - YMYL disclaimer at bottom - Meta description at 156 characters - Starts with the answer, zero filler intro