Income-Driven Repayment (IDR)

An income-driven plan recalculates your payment each year from your reported income rather than your balance. Income-Based Repayment (IBR) charges 10 or 15 percent of discretionary income, depending on when you borrowed, and forgives the remaining balance after 20 or 25 years. The Repayment Assistance Plan (RAP), the only income-driven option for federal loans first disbursed on or after July 1, 2026, charges 1 to 10 percent of adjusted gross income, has a 10 dollar monthly minimum, and forgives after 30 years of payments.

The tradeoff is time. A lower payment usually means more months of interest and a longer road to zero, so forgiveness credit only builds if you stay enrolled and recertify your income on schedule. Compare an income-driven payment against a fixed payoff schedule in the student loan payoff calculator before you commit.