What Is the Income-Based Repayment (IBR) Plan for Student Loans?

The Income-Based Repayment (IBR) plan is currently one of four federal student loan repayment plans that base monthly bills on income, extend the repayment term beyond the standard 10 years and eventually forgive remaining student debt. Together, this group of plans is called “income-driven repayment.”

Under the “one big, beautiful bill” signed by President Trump in July 2025, IBR will be the only existing income-driven repayment plan available after 2028. The other three plans — SAVE, PAYE and ICR — will end. The bill also makes it easier for existing borrowers to qualify for IBR.

Generally, IBR is the best choice for current borrowers who want to stay on an income-driven repayment plan for the life of their loans. To qualify, you cannot borrow any new loans after July 1, 2026, and you must enroll in IBR before July 1, 2028. Miss the deadline, and you’ll be locked out of IBR permanently. Your only option then will be the new Repayment Assistance Plan (RAP), which could mean higher payments and a longer repayment term.

» MORE: How to choose the best student loan repayment plan

There are two versions of IBR: “old” IBR and “new” IBR. You can qualify for the “new” version of the plan — which has more generous terms — if you took out your first loan between 2014 and 2026.

Income-Based Repayment (IBR) plan overview: Old vs. New IBR

Upcoming changes to the IBR plan

The IBR plan is impacted by the Trump Administration’s budget reconciliation bill, signed into law on July 4, 2025. Here are the key changes and dates to know:

How is IBR not changing?

• Terms of the plan stay the same, depending on whether you took your loans out before or after July 1, 2014. 

• Payments remain capped. That means that monthly IBR payments will never exceed what a borrower would have paid under the standard 10-year plan.

IBR vs. Repayment Assistance Plan (RAP)

If you take out all of your federal student loans prior to July 1, 2026, you’ll have two income-driven repayment plan options going forward: IBR and the new Repayment Assistance Plan (RAP).

You have to make a decision to stay on IBR before July 1, 2028. If you aren’t enrolled in IBR by that date, you can only access RAP going forward. You can switch from IBR to RAP in the future, but you cannot switch from RAP to IBR.

Here’s an overview of the two plans:

Comparing IBR and RAP: Borrower examples

Illustrative examples can help you figure out which plan to choose. For the purposes of these examples, assume a borrower has $40,000 in federal student loans at a 5% interest rate and lives in the lower 48 states.

Single, no kids

Single, one kid

Borrowers with higher incomes tend to get lower monthly payments on the IBR plan when compared to RAP, especially if they qualify for the “new IBR.” That’s because IBR payments have a cap: you’ll never pay more than you would on the standard 10-year plan. On the other hand, people with a lower or middle income may see smaller payments on RAP. But, they may also spend five or 10 additional years paying off their debt until reaching the forgiveness threshold.

Ready to apply these examples to your own student loans?

• Use the Education Department’s loan simulator to get an estimate of your payments under the IBR plan for which you qualify. (It’s not yet updated to estimate RAP payments.) 

• Then, to estimate your RAP payments, determine your “base payment percentage” and use the RAP formula. 

The RAP formula is:

(RAP base payment / 12) - $50 per dependent = Estimated monthly RAP payment

Who is Income-Based Repayment best for?

Generally, IBR is the best plan for borrowers who want access to income-driven repayment after 2028, and who get lower payments on the plan than on RAP.

Income-driven repayment is typically a good fit for:

• Borrowers whose student debt balance is greater than their income. 

• Borrowers who need lower monthly payments. 

• Borrowers pursuing IDR loan forgiveness or Public Service Loan Forgiveness (PSLF). 

Before deciding on IBR or RAP, do the math to see which plan will save you the most money. Remember, RAP could add an additional five or 10 years to your repayment timeline. That means you could pay significantly more in interest over time, even if you get lower monthly bills.

How to apply for Income-Based Repayment

To enroll in Income-Based Repayment, you can contact your federal student loan servicer or complete the process online:

Visit studentaid.gov/IDR. Log into your student loan account with your Federal Student Aid ID. Preview the IDR application to see which documents you’ll need ready, like your tax return.

Complete the application. Choose IBR as your desired repayment plan. Enter required details about your income and family. Remember to include your spouse’s information, if you file taxes jointly, as it will affect your payments under IBR.

» MORE: How to submit an income-driven repayment application

How parent PLUS borrowers can get on IBR

Borrowers with parent PLUS loans are now eligible for the IBR plan, per a change in the law from Trump’s budget reconciliation bill. Previously, parent PLUS borrowers were only eligible for the ICR plan. But the ICR plan is going away.

Follow these steps to enroll in IBR with parent PLUS loans:

• Consolidate your parent PLUS loans before July 1, 2026. 

• Immediately enroll in the Income-Contingent Repayment (ICR) plan.

• Make at least one full payment on the ICR plan. 

• Enroll in the IBR plan before July 1, 2028. 

If you don’t complete these steps by the deadlines, you’ll be permanently blocked from any income-driven repayment plan. Parent PLUS borrowers are not eligible for RAP. Instead, you would have to make payments under the standard plan, which doesn’t tie your student loan bills to your income.

Student loan forgiveness under IBR program temporarily suspended

Student loan forgiveness for borrowers on the IBR plan who finish their 20- or 25-year repayment term is suspended as of mid-August 2025, according to a recent update to an FAQ section on the Education Department’s Federal Student Aid office website.

This move is ostensibly because payments under the three other income-driven repayment plans (ICR, PAYE and SAVE) are paused due to a court order in the SAVE lawsuits. However, there is no court order blocking forgiveness under the IBR plan.

There's no clear guidance for borrowers who finish their 20- or 25-year IBR repayment term during this forgiveness suspension. You are required to make monthly payments until your forgiveness is processed, even after finishing your repayment term. Historically, servicers have sent refunds to borrowers who overpay past the forgiveness finish line.

Alternatively, you can try calling your servicer and ask them to place you in a forbearance until your IBR forgiveness is processed. This will pause payments, though interest may accrue on your debt.

Other ways to lower student loan payments

If income-driven repayment isn't right for you, the federal government offers extended repayment and graduated repayment plans, which lower your payments but aren’t based on your income. You may pay more interest under these plans, though, and neither offers loan forgiveness.

You also may be able to pay less by refinancing your student loans.