Which federal loan repayment programs are available
There are several federal student loan repayment programs available depending on your financial needs and qualifications.
When looking to get a student loan, you can choose between federal or private student loans. Federal loans can come with more favorable repayment and forgiveness options, though they do come with certain requirements that borrowers need to meet. If you do not meet these requirements, you can apply for private student loans to help fund your education.
Federal student loan repayment plan options
Let’s take a look at some of the federal student loan repayment plan options you have, how they work and what their benefits are.
What happened to the SAVE plan?
The Save on a Valuable Education (SAVE) plan was introduced in 2023 and eliminated in March 2026.
The SAVE plan was an affordable income-driven repayment plan offering borrowers with low balances, lower monthly payments and fast loan forgiveness. This plan is scheduled to be phased out by the first of July 2028. Borrowers on the SAVE plan will have to switch to other plans before it is phased out.
What is IBR?
Income-Based Repayment (IBR) bases a borrowers monthly student loan payments on income and family size. IBR set your federal student loan payments at 10% to 15% of your discretionary income, your income after paying taxes and essential living expenses. If you got a federal loan before 2014, you would qualify for 15% of your discretionary income. If you got a federal loan afterward, your payments would qualify for 10%. IBR payments are recalculated each year and updated according to any changes in your family size or income.
After 20 or 25 years on the IBR plan, your remaining loan amount is forgiven. You can use a free online tool to track your loan forgiveness progress and your monthly payments and make sure you are not overpaying.
What is ICR?
The Income-Contingent Repayment (ICR) plan can make student loans more affordable and let borrowers be eligible for loan forgiveness. With the ICR plan, your monthly payments will either be 20% of your discretionary income or a 12-year fixed plan, whichever option is lower for you. After 25 years of qualifying payments ICR offers loan forgiveness on your remaining balance, though your forgiven balance is taxable.
ICR plans are being phased out in the summer of 2026 and will be eliminated by July 1st, 2028.
What is PAYE?
Through a Pay As You Earn (PAYE) plan, your monthly payments will be maxed to 10% of your discretionary income. PAYE plans offer borrowers loan forgiveness after 20 years. New borrowers, after July 1st, 2026, are no longer eligible for PAYE plans. Any borrowers currently on a PAYE plan will have to switch to a new plan by July of 2028 .
What is RAP?
The Repayment Assistance Plan (RAP) went into effect July 1st, 2026, and is available for any borrower, regardless of when you got your loan. Unlike other plans, which use your discretionary income, RAP uses your total adjusted gross income, AGI. Your AGI is your income from all sources before taxes, minus IRS allowed adjustments. While discretionary income is a portion of your AGI. Annual payments on a RAP will be 1% to 10% of your AGI, depending on how much you earn. Loan forgiveness with RAP is available after 30 years of eligible payments.
What are the differences between the federal student loan repayment plans?
The main differences between federal student loan plans are payment structure and loan forgiveness potential.
Federal student loans can vary in payment structure. Some will be based on your income, while others will be a standard amount. Not all federal student loans will be eligible for loan forgiveness. If you are hoping for loan forgiveness after a certain number of years, check to see if the options you are looking at qualify.
Make sure you research all federal student loan options to see which one works the best for you.
What if I don’t qualify for federal student loans?
If you don’t qualify for a federal student loan, or if you need additional help funding your education, private student loans can help cover your expenses.
Private student loans are backed by a bank, credit union or private lender. These loans could help cover your tuition, room, board and other educational expenses. Private loans typically have higher loan limits than federal loans, but do have certain requirements that you, or a cosigner, will need to meet.
Keep in mind, some private student loans may require that you start loan repayment while you are still in school.
How can I apply for a private student loan?
If you are looking to apply for a private student loan, you can fill out an application form online through a lender. Before you start your application, there are a few things you will want to check first.
Lenders have requirements that must be met to qualify for private student loans. These requirements include a minimum credit score, income to help cover payments and a maximum debt-to-income (DTI) ratio. Make sure you check your financial situation to make sure it meets a lender’s requirements. If you don’t meet the requirements, you may need to find a cosigner who could help you meet them.
After you have met your lender’s requirements, you will be ready to start your private student loan application.
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