What is Income-Driven Repayment (IDR)?
Income-driven repayment (IDR) is a federal student loan repayment program that allows students to repay their loans based on their income, family size, and loan balance. Since 1994, the federal government has offered income-driven repayment plan options to help borrowers with lower earning power repay loans at a slower pace without penalty. IDR helps many borrowers manage their federal student loans by offering affordable loan repayment options tailored to their current income levels. The number of borrowers enrolled in IDR has increased 16 percent from September 2016 to September 2017. In the third quarter of 2018, the number of Direct Loan and Federal Family Education Loan borrowers enrolled in income-driven repayment plans is as follows: 650,000 in ICR; 2.85 million in IBR; 1.24 million in PAYE; and 2.34 million in REPAYE.
Since 1994, the federal government has offered income-driven repayment (IDR) plans to help borrowers with lower earning power repay their federal student loans at a slower pace without penalty. Today, over 7 million federal student loan borrowers are enrolled in some form of income-driven repayment. How do these plans vary in terms of their requirements and payment schedules, and which students are eligible? Our 101 breaks down the basics of this program and why it exists and provides a skimmable summary of the six IDR plans available to students.