If you have federal student loans, understanding repayment options is crucial. One key term you’ll encounter is IDR, which stands for Income-Driven Repayment. Simply put, IDR plans calculate your monthly loan payment based on your income and family size, not just the total amount you owe. This makes payments more affordable, especially when your income is low.
IDR plans are available for federal student loans, not private loans. The U.S. Department of Education offers several IDR plans, each with its own formula and forgiveness timeline. Knowing how these plans work can help you choose the best one for your financial situation.
How Income-Driven Repayment Works
Under an IDR plan, your monthly payment is a percentage of your discretionary income. Discretionary income is the amount left after subtracting a certain percentage of the federal poverty level for your family size. Each plan uses a different percentage and poverty level multiplier.
Most IDR plans require you to recertify your income and family size each year. You must provide updated information, even if your situation hasn’t changed. If you fail to recertify, your payment may increase, and interest may capitalize.
After making payments for a set number of years (usually 20 or 25), any remaining balance is forgiven. However, forgiven amounts may be taxable as income, unless you qualify for a specific exception.
Types of IDR Plans
As of August 2026, the Department of Education offers several IDR plans. Here is a comparison of the main options:
| Plan Name | Payment Amount | Forgiveness Timeline |
|---|---|---|
| SAVE (Saving on a Valuable Education) | 10% of discretionary income (based on 225% of poverty line) | 20 years (undergraduate) or 25 years (graduate) |
| PAYE (Pay As You Earn) | 10% of discretionary income (based on 150% of poverty line) | 20 years |
| IBR (Income-Based Repayment) | 10% or 15% of discretionary income (depending on when you borrowed) | 20 or 25 years |
| ICR (Income-Contingent Repayment) | Lesser of 20% of discretionary income or fixed payment based on 12-year amortization | 25 years |
Note: The SAVE plan is currently being phased out due to court rulings. As of July 2025, new enrollments in SAVE are paused. If you are already in SAVE, you may be placed in a different IDR plan. Always check the official Federal Student Aid website for the latest updates.
How to Apply for IDR
Applying for an IDR plan is straightforward. You can submit an application online through the Federal Student Aid website. You will need to provide information about your income, family size, and tax filing status.
Here are the steps to apply:
- Log in to your Federal Student Aid account using your FSA ID.
- Complete the Income-Driven Repayment Plan Request form.
- Choose the specific IDR plan you want (or let the system recommend one).
- Provide consent for the IRS to retrieve your tax information (optional but speeds up the process).
- Submit the form and wait for your loan servicer to confirm your new payment amount.
You can also apply by mailing a paper form to your loan servicer. The paper form is available on the Federal Student Aid website. Processing may take a few weeks, so plan ahead.
Who Should Consider IDR?
IDR plans are beneficial if your current monthly payment is too high relative to your income. They are also helpful if you expect your income to stay low for several years. Additionally, IDR plans are the only way to pursue Public Service Loan Forgiveness (PSLF) for qualifying public service workers.
However, IDR may not be the best choice if you have a high income and can afford to pay off your loans quickly. In that case, a standard repayment plan may save you money in interest over time.
Important Considerations
Before you enroll in an IDR plan, keep these points in mind:
- Your monthly payment may not cover the interest that accrues, leading to negative amortization. This means your loan balance can grow even as you make payments.
- You must recertify your income and family size every year, even if nothing changes.
- Forgiveness after 20 or 25 years may be taxable as ordinary income, unless you are in PSLF or another exempt program.
- If you are married and file taxes jointly, your spouse’s income will be included in the payment calculation. Filing separately may lower your payment but could affect other tax benefits.
Always compare your options using the Loan Simulator on the Federal Student Aid website. This tool gives you an estimate of monthly payments under each plan based on your specific loans and income.
Summary
IDR in FAFSA refers to Income-Driven Repayment, a set of federal student loan repayment plans that base your monthly payment on your income and family size. These plans can make payments more manageable and offer forgiveness after 20 or 25 years. To apply, use the Federal Student Aid website and choose the plan that fits your financial situation. Remember to recertify annually and monitor any changes to the programs.
Frequently Asked Questions
What does IDR stand for in FAFSA?
IDR stands for Income-Driven Repayment, which is a group of federal student loan repayment plans that base your monthly payment on your income and family size.
How do I apply for an IDR plan?
You can apply online through the Federal Student Aid website by completing the Income-Driven Repayment Plan Request form, or you can mail a paper form to your loan servicer.
Will my IDR payment be based on my spouse’s income?
If you file taxes jointly, your spouse’s income will be included in the calculation. Filing separately may exclude it, but you should consider the tax implications before choosing that option.
Can I get loan forgiveness under an IDR plan?
Yes, any remaining balance is forgiven after 20 or 25 years of qualifying payments, depending on the plan. However, forgiven amounts may be taxable unless you qualify for an exemption.
Is IDR the same as income-based repayment?
Income-Based Repayment (IBR) is one type of IDR plan. There are also other plans like PAYE, ICR, and SAVE, each with different rules.
