Read on to learn about how income limits pertain to IDR plans, including enrollment thresholds, requirements, the advantages of IDR for low-income individuals, and what happens when your income grows beyond the initial requirements of your IDR plan.
Published October 03, 2023
5 min readIncome-Driven Repayment (IDR) plans are highly beneficial student loan tools that adjust your monthly payments according to your income and family size. Each IDR plan operates differently, but they all aim to make student loan repayment more manageable – and more affordable. Since borrowers may remain enrolled in their chosen IDR plan for decades, it’s important to understand what happens within each plan as your income changes throughout your career.
Read on to learn about how income limits pertain to IDR plans, including enrollment thresholds, requirements, the advantages of IDR for low-income individuals, and what happens when your income grows beyond the initial requirements of your IDR plan.
Each IDR plan has unique enrollment requirements, which may not link to a specific salary (there is no “maximum income” threshold) but are implicitly tied to your income level, so certain plans wouldn’t make sense for some income brackets. Suitability for each plan largely depends on your income relative to your federal student loan debt.
Learn more about each plan with our complete guides to:
Generally, for initial eligibility, your calculated monthly payment must be less than what you would pay under the Standard Repayment Plan (a 10-year period of fixed payments) to ensure the IDR program makes sense for you.
Plan | Monthly Payments | Repayment Period | Status |
---|---|---|---|
Income-Based Repayment (IBR) |
|
20-25 years, depending on when you become a new borrower | Remains available but borrowers cannot select plan after 60 payments on REPAYE that occur on/after July 1, 2024 |
Pay as You Earn (PAYE) |
|
20 years | Not accepting new enrollments as of July 2023 |
SAVE (formerly REPAYE) |
|
|
This plan replaces REPAYE |
Income-Contingent Repayment (ICR) |
The lesser of the following:
|
25 years | Not accepting enrollments for current students; only available to future borrowers with consolidated Parent PLUS loans |
Each year, you must recertify your income and other changes with your loan servicer to remain enrolled in IDR, and so there may come a time over the 10 to 25 years of your repayment plan when your income outgrows the original qualifications of your plan. But don’t be alarmed that you’ll suddenly have a student loan payment you can’t afford. If your adjusted payment would no longer qualify you for your plan (for instance, due to a jump in income, your calculated payment would be larger than the Standard Repayment Plan amount), the following adjustments to your plan would take place:
Don’t let the complexities of possible income limits deter you from exploring the benefits of IDR. Contact our team of experts for a comprehensive consultation and let us help you make informed decisions about your student loan repayment choices, tailored to your unique financial circumstances. Make the most of your educational investment by navigating the world of student loans with confidence.
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