Income-Based Repayment Calculator
Calculate your IBR (Income-Based Repayment) monthly payment using 2026 federal poverty guidelines. Includes the OBBBA 2025 changes, post-SAVE rules (SAVE was vacated March 10, 2026), and a preview of the new RAP plan launching July 1, 2026.
Last updated: April 2026 · Source: HHS 2026 Poverty Guidelines, StudentAid.gov, OBBBA 2025
From your most recent tax return (Form 1040, line 11)
Income-driven repayment plans in 2026
| Plan | Payment | Forgiveness | Status |
|---|---|---|---|
| New IBR (post-2014) | 10% discretionary | 20 years | Permanent, recommended |
| Old IBR (pre-2014) | 15% discretionary | 25 years | Permanent |
| PAYE | 10% discretionary | 20 years | Sunsets July 1, 2028 |
| ICR | 20% discretionary | 25 years | Sunsets July 1, 2028 |
| SAVE | 5-10% discretionary | 20-25 years | TERMINATED March 10, 2026 |
| RAP | 1-10% AGI | 30 years | Launches July 1, 2026 |
2026 Federal Poverty Guidelines
IBR uses 150% of the federal poverty guideline as the protected income threshold — income below this level is NOT counted toward the IBR payment calculation. Only discretionary income (AGI minus 150% FPL) is used. Higher cost-of-living states (Alaska, Hawaii) have higher thresholds.
| Family size | 48 states + DC (150% FPL) | Alaska | Hawaii |
|---|---|---|---|
| 1 person | $23,940 | $29,925 | $27,540 |
| 2 people | $32,460 | $40,575 | $37,350 |
| 3 people | $40,980 | $51,225 | $47,160 |
| 4 people | $49,500 | $61,875 | $56,970 |
| 5 people | $58,020 | $72,525 | $66,780 |
| 6 people | $66,540 | $83,175 | $76,590 |
Source: HHS 2026 Poverty Guidelines (published January 13, 2026). Figures are 150% of the 100% FPL used by IBR. Add $5,680 per additional person for 48 states + DC.
Frequently asked questions
What is Income-Based Repayment (IBR)?
IBR is a federal student loan repayment plan that caps your monthly payment at 10% or 15% of your "discretionary income" (depending on when you first borrowed). Any remaining balance is forgiven after 20 or 25 years of qualifying payments. As of 2025, the OBBBA removed the "partial financial hardship" requirement, so any borrower with eligible federal Direct or FFEL loans can enroll regardless of income level. IBR is the most stable income-driven repayment plan available in 2026 — it is permanent, unlike PAYE and ICR which sunset on July 1, 2028.
How is discretionary income calculated for IBR?
Discretionary income for IBR is your Adjusted Gross Income (AGI) minus 150% of the federal poverty guideline for your family size and state. For 2026, 150% of the poverty line in the 48 contiguous states is $23,940 for a household of 1, $32,460 for 2, $40,980 for 3, and $49,500 for 4. Alaska and Hawaii have higher amounts. Example: a single borrower with $50,000 AGI in the continental US has discretionary income of $50,000 - $23,940 = $26,060. Their IBR payment would be 10% of that, or $2,606/year ($217/month) if they are a "new borrower" (first loan on or after July 1, 2014).
What is "New IBR" vs "Old IBR"?
New IBR applies to borrowers whose first federal loan was disbursed on or after July 1, 2014. Under New IBR, your payment is 10% of discretionary income, and remaining balance is forgiven after 20 years. Old IBR applies to borrowers with loans before July 1, 2014. Payment is 15% of discretionary income, and forgiveness comes after 25 years. Both versions cap the payment at what you would pay on the 10-year Standard Repayment plan. If you have loans from both before and after July 1, 2014, you typically get the less favorable Old IBR terms unless you specifically only enroll the newer loans.
What happened to the SAVE plan?
SAVE (Saving on a Valuable Education) was terminated in 2025-2026. The One Big Beautiful Bill Act, signed July 4, 2025, eliminated SAVE by statute. Then on March 10, 2026, a federal court in the Eastern District of Missouri vacated the SAVE Final Rule entirely. Borrowers who were enrolled in SAVE had been placed in administrative forbearance since 2024, but those forbearance months did NOT count toward forgiveness. Former SAVE borrowers must now switch to IBR (available now) or wait for RAP (launches July 1, 2026) to continue earning forgiveness credit.
What is the new RAP plan?
The Repayment Assistance Plan (RAP) was created by the OBBBA and launches July 1, 2026. RAP uses a tiered percentage-of-AGI formula (not discretionary income) with payments ranging from 1% to 10% of AGI across 11 income brackets. Key differences from IBR: $10 minimum payment (no $0 payments), unpaid interest is waived each month (no negative amortization), $50/month principal boost when your payment does not cover interest, and forgiveness at 30 years (longer than IBR). RAP is mandatory for new borrowers starting July 1, 2026 — no other IDR option is available for loans disbursed on/after that date.
Can I qualify for a $0 IBR payment?
Yes. If your Adjusted Gross Income is at or below 150% of the federal poverty guideline for your family size, your calculated IBR payment is $0 and that $0 counts as a qualifying payment toward forgiveness. For 2026 in the 48 contiguous states, this means AGI under $23,940 for a single filer, $32,460 for two people, $40,980 for three, $49,500 for four. Many unemployed or low-income borrowers qualify for $0 payments while still making progress toward the 20 or 25 year forgiveness timeline.
How is IBR forgiveness taxed?
For forgiveness in 2026 or later, IBR forgiveness is treated as ordinary taxable income by the IRS. The American Rescue Plan made student loan forgiveness federally tax-free from 2021 through December 31, 2025, but that exemption expired. If you reach the 20 or 25 year forgiveness point in 2026+, you will receive a Form 1099-C for the forgiven amount and owe federal income tax on it. This can be a "tax bomb" — a $80,000 forgiven balance could generate $18,000-$28,000 in federal tax depending on your bracket. The exception is PSLF, which remains permanently tax-free.
Is IBR better than the Standard 10-year plan?
It depends on your income relative to your debt. IBR lowers the monthly payment but extends the timeline and typically increases total interest paid. IBR is better when: (1) your 10-year Standard payment would be unaffordable, (2) you are pursuing Public Service Loan Forgiveness (IBR is a qualifying plan), or (3) you expect your income to stay low enough that you will benefit from forgiveness after 20-25 years. Standard 10-year is better when you can afford the full payment and want to minimize total interest paid and complete repayment faster.
What loans are eligible for IBR?
Direct Loans (Subsidized, Unsubsidized, Consolidation, PLUS to graduate students) and FFEL loans (Stafford, Consolidation, PLUS to graduate students) are eligible. IMPORTANT: Parent PLUS loans are NOT eligible for IBR — not even through consolidation. The only IDR option for Parent PLUS is Income-Contingent Repayment (ICR), and only if you consolidate before June 30, 2026. After that date, Parent PLUS borrowers lose all IDR access. Private student loans are never eligible for federal IDR plans including IBR.
Do my spouse's income and loans affect my IBR payment?
It depends on your tax filing status. If you file taxes jointly, both your AGI and spousal income are included, making your payment higher. If you file separately, only your income is counted for IBR (a key advantage of IBR over ICR, which always uses joint income). However, filing separately usually loses you other tax benefits like the student loan interest deduction, child tax credit eligibility, and IRA contribution limits. Run both scenarios to see which minimizes your total cost across both student loans and taxes.
How do I apply for IBR?
Submit the Income-Driven Repayment Plan Request online at StudentAid.gov using your FSA ID. You will need to provide your most recent tax return (AGI) or alternative income documentation if your situation has changed. Your loan servicer will process the application, typically within 1-2 months, and your new payment starts the next billing cycle. You must recertify your income annually — if you miss recertification, you can be removed from IBR and placed back on the Standard plan with a higher payment. Apply directly through StudentAid.gov; beware of third-party companies charging fees for something that is free.
When does it make sense to stay on IBR until forgiveness?
When (1) your debt-to-income ratio is very high (e.g., $150K+ loans with $50K income in a field with limited upward mobility), (2) you are pursuing PSLF with qualifying employment, or (3) you have already made 10+ years of qualifying payments. For a "normal" debt-to-income situation, paying off the balance before hitting forgiveness often costs less over the total timeline than pursuing forgiveness — both because of the 20-25 year timeline and the tax bomb at the end. If your math shows you will pay off the loan naturally before forgiveness, you are better off on Standard.
Data sources: HHS 2026 Federal Poverty Guidelines (effective January 13, 2026); US Department of Education Federal Student Aid; One Big Beautiful Bill Act (July 4, 2025); Federal court ruling vacating SAVE Final Rule (March 10, 2026).
Last updated: April 2026. Poverty guidelines update each January. IBR rules are subject to change via regulatory and congressional action.
Disclaimer: This calculator provides estimates for educational purposes only and is not financial or legal advice. The forgiveness timeline estimate assumes your payment stays constant, which may not reflect reality as your income changes over 20-25 years. Consult a qualified student loan advisor or your loan servicer for personalized guidance.