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Income-Based Repayment (IBR) in 2026: Who Can Still Use It and What Will You Pay?

Income-Based Repayment (IBR) is one of the few federal plans that still ties your student loan bill to what you earn. But the rules shifted on July 1, 2026, and the SAVE Plan has ended, so many borrowers are asking the same thing: can I still use IBR, and what would I pay? The answer depends on when your loans were disbursed and what kind of loans you have. Here is how IBR works now, and how Legal Touch handles the work for you.

IBR in 2026: President Trump holding a signed bill beside a borrower checking his student loan statement with a calculator

The Short Answer

IBR is still available for borrowers whose loans were all first disbursed before July 1, 2026. Payments are generally 10% or 15% of discretionary income, and any remaining balance is canceled after 20 or 25 years of qualifying payments. Per the Federal Student Aid income-driven repayment page and 34 CFR 685.209, here is how the three main groups compare:

Your situation	Monthly payment	Remaining balance ends after
New borrower on or after July 1, 2014 (no outstanding Direct or FFEL balance at that time), all loans disbursed before July 1, 2026	Generally 10% of discretionary income, never more than the 10-year Standard amount	20 years of qualifying payments
Not a new borrower on July 1, 2014, all loans disbursed before July 1, 2026	Generally 15% of discretionary income, never more than the 10-year Standard amount	25 years of qualifying payments
Any loan disbursed on or after July 1, 2026	IBR is not available; the Repayment Assistance Plan (RAP) or Tiered Standard applies	RAP: 30 years of qualifying payments

How Your IBR Payment Is Figured

Your servicer starts with your adjusted gross income (AGI) from your tax return or other proof of income. It subtracts 150% of the poverty guideline for your family size and state, which leaves your discretionary income. Then it applies 10% or 15% and divides by 12. Two rules protect you:

Your IBR payment is never more than what you would pay on the 10-year Standard Plan.
If your income is low enough, the payment can be as low as $0 and still count as a qualifying payment.

Because the payment changes with income and family size, it is recalculated every year. Many borrowers with a growing family or a pay cut see their bill drop, while a raise can push it up.

Who Qualifies for IBR

You have Direct Loans or FFEL Program loans.
All of your loans were first disbursed before July 1, 2026.
Your loans are not in default. A defaulted loan must be brought current first, for example through rehabilitation or consolidation.
You do not have a Parent PLUS loan, unless it was consolidated before July 1, 2026 and at least one ICR payment has been made. Our Parent PLUS guide explains that path.
Your debt is high compared with your income. If your income is high, your IBR payment could equal the Standard amount and the plan may not help.

New Borrower or Not: Why 10% vs 15% Matters

Federal Student Aid defines a new borrower for IBR as someone with no outstanding Direct or FFEL balance as of July 1, 2014, or someone who had a zero balance when they took a new loan on or after July 1, 2014 and before July 1, 2026. New borrowers pay 10% and reach cancellation at 20 years. Everyone else pays 15% and reaches it at 25 years. Your servicer decides which group you are in, and an error here can cost you thousands of dollars, so we check your loan history before we send anything.

IBR After the SAVE Plan Ended

If you were on SAVE, you cannot stay there. Our guide on what to do after SAVE ended covers the transition. For borrowers with only older loans, IBR is often the closest replacement because it keeps payments tied to income and keeps the PSLF clock moving. Our Repayment Assistance Plan (RAP) explainer shows the newer plan for borrowers with new loans.

IBR and Public Service Loan Forgiveness

If you work for a government agency or qualifying nonprofit, IBR payments can count toward PSLF. That can shorten your timeline to 10 years. Read our PSLF help page and our note on the PSLF buyback if you had months of deferment or forbearance.

Common Problems That Raise an IBR Payment

Missing the annual renewal, which can move you to the Standard amount.
Filing a joint return when your spouse has high income or large loans.
Taking a new federal loan after July 1, 2026 without checking how it affects plan eligibility.
Letting a loan go into default, which makes it ineligible until it is resolved.

If you are already in default, collections can be serious. See our guides on wage garnishment and tax refund offset and rehabilitation vs. consolidation.

What Legal Touch Does for You

You tell us about your loans once. We do the work:

We review your federal loan records, including loan types, disbursement dates, and whether you are a new borrower as of July 1, 2014.
We tell you whether IBR, RAP, or another plan likely fits, and what your payment is likely to be.
We prepare your income-driven repayment request and submit it to your servicer.
We track your annual renewal date and prepare the update before it is due.
We check whether you may qualify for a discharge such as Borrower Defense, closed school, or total and permanent disability before you commit to a long repayment plan.

If your loans are in default, default resolution by consolidation is a $495 flat-fee Legal Touch service for eligible borrowers. The Department's Default Resolution Group at 1-800-621-3115 can explain rehabilitation and other options for free. You can see all of our loan help services in one place.

Frequently Asked Questions

What is Income-Based Repayment (IBR)?

IBR is an income-driven repayment plan for federal student loans. Your monthly payment is generally 10% of your discretionary income if you are a new borrower as of July 1, 2014, or 15% if you are not, and it is never more than you would have paid on the 10-year Standard Plan. Discretionary income is your adjusted gross income minus 150% of the federal poverty guideline for your family size.

Who can still use IBR in 2026?

IBR is available only if all of your loans were first disbursed before July 1, 2026. Eligible loans are Direct Loans and FFEL Program loans, but not loans in default, not Parent PLUS loans, and not consolidation loans that repaid a Parent PLUS loan unless at least one payment has been made on the Income-Contingent Repayment (ICR) Plan. You also need a high debt compared with your income to get a reduced payment.

Does IBR still lead to loan cancellation after 20 or 25 years?

Yes. Federal rules say the remaining balance is canceled after 240 monthly payments (20 years) for new borrowers as of July 1, 2014, or after 300 payments (25 years) for everyone else. Federal Student Aid notes you may owe income tax on any amount canceled, so tax planning matters near the end.

Can I use IBR if I take out a new loan after July 1, 2026?

No. Federal Student Aid says IBR is available only if all of your loans were first disbursed before July 1, 2026. A borrower with a loan disbursed on or after that date uses the Repayment Assistance Plan (RAP) or the Tiered Standard Plan instead. Check with Legal Touch before taking a new federal loan or consolidating, so you do not lose a plan that fits you.

Does IBR count toward Public Service Loan Forgiveness?

Yes. Qualifying payments on IBR can count toward Public Service Loan Forgiveness (PSLF) while you work full time for a qualifying employer, which can mean cancellation after 120 qualifying payments instead of 20 or 25 years. See our PSLF help page for details.

Do I have to renew IBR every year?

Yes. Your payment is valid for 12 months, and you must submit updated income and family size information every year, even if nothing changed. Missing the deadline can raise your payment to the 10-year Standard amount, so Legal Touch tracks the date for clients and prepares the renewal.

Is my spouse's income counted for IBR?

Only if you file a joint federal tax return. If you are married and file separately, your spouse's income and loan debt are generally not counted, though the tax tradeoffs vary, so ask a tax professional.

Can Legal Touch guarantee a lower payment?

No. The U.S. Department of Education and your loan servicer decide every request. Legal Touch is not a law firm and makes no guarantees. We review your loan types and disbursement dates, tell you which plan you likely qualify for, and handle the paperwork.

Get a Free Repayment Plan Review

Find out if IBR is likely your best plan and what the payment could be. Check My Eligibility or call 800-261-2946.

Questions first? Contact our team.

Sources: Federal Student Aid, Income-Driven Repayment Plans and the IDR Plan Request form; 34 CFR 685.209; Repayment Plan Comparison.

Legal Touch is not a law firm and does not give legal advice. Results are not guaranteed. Every decision is made by the U.S. Department of Education or your loan servicer, and Legal Touch is not affiliated with any government agency. You can apply for repayment plans, discharges, and default resolution yourself, for free, at StudentAid.gov or through your loan servicer. We will never ask for your StudentAid.gov username or password.