Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.

PAYE vs. IBR vs. ICR: How these repayment plans stack up

It comes down to when you borrowed and if you're a parent or student.

Updated

Fact checked
The Pay As You Earn (PAYE) Repayment Plan might be the best deal if you have loans issued between 2011 and 2104. Older loans are ineligible for PAYE, in which case the Income-Based Repayment (IBR) Plan could be a better choice. Both plans work the same for loans taken out after 2014.

If you can qualify for either of these plans, we recommend going for one of them. The Income-Contingent Repayment (ICR) is generally more expensive — unless you’re a parent borrower and can’t qualify for the PAYE or IBR Plans.

How these federal repayment plans compare

Pay As You Earn (PAYE) Repayment Plan Income-Based Repayment (IBR) Plan Income-Contingent Repayment (ICR) Plan
Best for... Student borrowers with a high debt-to-income ratio who are either single or married and file taxes separately Student borrowers looking for income-driven repayments on FFEL Loans that haven’t been consolidated Parent and student borrowers who want higher monthly income-driven repayments to save on interest
Eligible loans
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Graduate PLUS Loans
  • Direct Consolidation Loans — can't include Direct or FFEL Parent PLUS Loans
  • Subsidized Federal Stafford Loans*
  • Unsubsidized Federal Stafford Loans*
  • FFEL Graduate PLUS Loans*
  • FFEL Consolidation Loans* — can't include FFEL Parent PLUS Loans
  • Federal Perkins Loans*

*Only qualify if consolidated with a Direct Consolidation Loan.

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Graduate PLUS Loans
  • Direct Consolidation Loans — can't include Direct or FFEL Parent PLUS Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • FFEL Graduate PLUS Loans
  • FFEL Consolidation Loans — can't include FFEL Parent PLUS Loans
  • Federal Perkins Loans*

*Only qualify if consolidated with a Direct Consolidation Loan.

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Graduate PLUS Loans
  • Direct Consolidation Loans — can include Direct Parent PLUS Loans
  • Subsidized Federal Stafford Loans*
  • Unsubsidized Federal Stafford Loans*
  • FFEL Graduate PLUS Loans*
  • FFEL Consolidation Loans* — can include FFEL Parent PLUS Loans
  • Federal Perkins Loans*

*Only qualify if consolidated with a Direct Consolidation Loan.

How much you pay
  • 10% of your monthly discretionary income — never more than what you’d pay on the Standard Repayment Plan
  • 10% or 15% of your monthly discretionary income — depending on when your loan was first issued
  • Never more than what you'd pay on the Standard Repayment Plan
  • 20% of your monthly discretionary income*
  • Fixed monthly repayments on a 12-year term*

*You’ll pay the lesser of these two options.

Repayment Term
  • 20 years
  • 20 or 25 years — depending on when your loan was first issued
  • 25 years
Eligibility requirements
  • Eligible loans
  • High-enough debt-to-income ratio that repayments are lower than what they'd be on the Standard Repayment Plan
  • Direct Loans disbursed after September 30, 2011
  • No outstanding federal student debt as of October 1, 2007
  • Eligible loans
  • High-enough debt-to-income ratio that repayments are lower than what they'd be on the Standard Repayment Plan
  • Eligible loans
Eligible for forgiveness at the end of the term
Eligible for Public Service Loan Forgiveness
Required to reapply each year

Yes

Yes

Yes

Pros
  • Repayments adjust with your income
  • Cap on monthly repayments
  • Same term for all loans
  • Spousal income won't count if you file taxes separately
  • Repayments adjust with your income
  • Cap on monthly repayments
  • Spousal income won't count if you file taxes separately
  • Open to parent borrowers
  • Save on interest compared to other income-driven repayment plans
  • Repayments adjust with your income
  • Cap on monthly repayments
  • Spousal income won't count if you file taxes separately
Cons
  • Age limits for eligible loans
  • Joint tax returns mean higher repayments
  • More paperwork annually
  • Not open to parent borrowers
  • Longer term and higher monthly repayments for older loans
  • More paperwork annually
  • No FFEL Loans
  • Highest monthly cost of income-driven repayment plans
  • More paperwork annually
Learn more
Learn more
Learn more

Check out our guide to student loan repayment plans to compare all options available to you.

Interested in refinancing instead? Compare your options

Data indicated here is updated regularly
Name Product Min. Credit Score Max. Loan Amount APR
Discover Private Consolidation Loan
Good to excellent credit
$150,000
2.80% to 12.49%
Splash Financial Student Loan Refinancing
660
None
Starting at 1.89%
Save on your student loans with this market-leading newcomer.
Credible Student Loan Refinancing
Good to excellent credit
None
1.99% to 9.24%
Get prequalified offers from top student loan refinancing providers in one place.
Education Loan Finance Student Loan Refinancing
680
None
2.39% to 5.99%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
650
$500,000
1.99% to 5.64%
Get a tailored interest rate and repayment plan with no hidden fees.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
2.25% to 6.09%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
loading

Compare up to 4 providers

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site