RepayPlan

Income-Based Repayment (IBR)

Remains available (existing borrowers) · Income-driven · counts toward PSLF

Income-Based Repayment (IBR). 10% of discretionary income for borrowers who are new on/after July 1, 2014; 15% for borrowers from before that date. Discretionary income = AGI minus 150% of the HHS poverty guideline for your family size and state. Payment is capped at the 10-year Standard amount. Remaining balance forgiven after 20 years (new IBR) or 25 years (old IBR) of qualifying payments. Counts toward PSLF. General information, not advice.

Source: Federal Student Aid - OBBBA updates. Data as of June 2026.

General information, not financial or legal advice. Federal student loan rules are changing in 2025-2026 under the One Big Beautiful Bill Act - figures here are estimates from public sources and the final program rules are still being implemented. Always verify with your loan servicer and studentaid.gov. See our disclaimer.

How IBR works

Formula. 10% of discretionary income for borrowers who are new on/after July 1, 2014; 15% for borrowers from before that date. Discretionary income = AGI minus 150% of the HHS poverty guideline for your family size and state. Payment is capped at the 10-year Standard amount.

Interest. Interest accrues; unlike RAP/SAVE there is no general unpaid-interest waiver (a limited subsidy existed on some legacy plans). Unpaid interest can capitalize in certain situations.

Forgiveness. Remaining balance forgiven after 20 years (new IBR) or 25 years (old IBR) of qualifying payments. Counts toward PSLF.

Availability. Remains permanently available to borrowers whose first loan is before July 1, 2026. Not available to brand-new borrowers (first loan on/after July 1, 2026), who use RAP instead.

Worked example

A new-IBR borrower with $55,000 AGI, family size 1 in the 48 contiguous states has discretionary income of about $31,525 (AGI minus 150% of the 2025 poverty guideline). At 10%, the estimated payment is about $262.71/month (before the 10-year Standard cap). Old IBR borrowers pay 15%.

Estimate only. Try the calculators with your own numbers.

Pros and cons

Trade-offs of Income-Based Repayment (IBR). General information, not a recommendation.
ProsCons
Payment based on discretionary income (can be $0 at low income)Closed to brand-new borrowers (first loan on/after July 1, 2026)
Counts toward PSLFNo across-the-board interest waiver, so balances can grow
OBBBA removed the partial-financial-hardship entry requirement, so any eligible borrower can enrollRequires annual income recertification
Statutory plan - it stays put while SAVE/PAYE/ICR close

Eligibility

Direct and FFEL borrowers whose first loan is before July 1, 2026. New IBR (10%/20yr) vs old IBR (15%/25yr) depends on whether you were a new borrower on or after July 1, 2014.

Frequently asked questions

Does IBR count toward PSLF?

Yes. Payments under Income-Based Repayment (IBR) count toward Public Service Loan Forgiveness (120 qualifying payments while working full-time for a qualifying public-service employer).

When is loan forgiveness under IBR?

Remaining balance forgiven after 20 years (new IBR) or 25 years (old IBR) of qualifying payments. Counts toward PSLF.

Who can use IBR in 2026?

Direct and FFEL borrowers whose first loan is before July 1, 2026. New IBR (10%/20yr) vs old IBR (15%/25yr) depends on whether you were a new borrower on or after July 1, 2014.

Compare with other plans

Sources & accuracy

Plan rules from Federal Student Aid - OBBBA updates and the U.S. Dept of Education. Data as of June 2026. The 2025-2026 rules are still being implemented - this is general information, not financial or legal advice. Verify with your loan servicer and studentaid.gov. See our methodology and disclaimer.

Last updated: 2026-06-22