IBR Student Loan Requirements Explained

Short answer: IBR, short for Income Based Repayment, is a federal income driven repayment plan that sets your monthly student loan payment at 10 percent of your discretionary income if you first borrowed on or after July 1, 2014, or 15 percent if you borrowed before that date. Any balance that remains is forgiven after 20 years for new borrowers, or 25 years for older borrowers. IBR is for Direct Loans and FFEL loans disbursed before July 1, 2026. Since July 4, 2025, there is no partial financial hardship test to enroll, so any borrower with eligible loans can apply, whatever their income.

IBR is the oldest income driven repayment plan, and after the changes of 2025 and 2026 it is also one of the two plans expected to remain. The other is the new Repayment Assistance Plan, known as RAP. This guide explains the IBR requirements in plain English: which loans qualify, how the payment is calculated, and what changed about the hardship test.

What IBR is

IBR is a federal income driven repayment plan for federal student loans. Instead of setting your payment from your loan balance alone, it sets it from your income and family size.

IBR has two versions, and which one applies to you depends on when you first borrowed. That date decides both your percentage and your forgiveness period. The plan is open to more loan types than any other income driven plan, because it is the only one that accepts FFEL loans in their original form. It also remains open for new enrollments, while PAYE and ICR are being phased out and SAVE has ended.

The IBR requirements

There are four requirements to check before you apply: your loans, your loan dates, your application, and your yearly recertification. Income is no longer a requirement, as explained below.

Requirement 1: Eligible loans

IBR is available for Direct Loans and Federal Family Education Loans, known as FFEL loans, disbursed before July 1, 2026. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans can qualify. FFEL Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans can qualify in their original form, which makes IBR the only income driven plan for many FFEL borrowers. Our guide What Is an FFEL Loan? explains how to check whether each of your loans is an FFEL loan or a Direct Loan.

Perkins Loans do not qualify in their original form, but they can become eligible if consolidated into a Direct Consolidation Loan. Private student loans are never eligible for any federal income driven plan.

Requirement 2: Loans disbursed before July 1, 2026

Your loans must have been disbursed before July 1, 2026. According to studentaid.gov, IBR applies to Direct and FFEL Program loans disbursed before that date. If you receive a new loan disbursed on or after July 1, 2026, RAP is the only income driven plan available to you for that loan. Parent PLUS Loans do not qualify in their original form, and they have special consolidation rules, so parents should check the current page at studentaid.gov and talk to their servicer.

Requirement 3: A completed application

You apply through the Income Driven Repayment Plan Request form at studentaid.gov, or by mailing a paper version to your loan servicer. You will need your income information, usually from your most recent federal tax return, or other proof of income such as pay stubs. The Department says the online application takes most people about 10 minutes. There is no fee to apply.

Requirement 4: Yearly recertification

IBR is approved for 12 months at a time. You must recertify your income and family size every year, even if nothing has changed. If you do not recertify on time, your monthly payment changes to the amount you would pay under the standard 10 year plan. Set a yearly reminder.

Old borrower vs new borrower: 10 percent or 15 percent

Your percentage and your forgiveness period depend on when you first borrowed a federal student loan. This is the most important split in IBR, and it is easy to get wrong.

A new borrower first borrowed on or after July 1, 2014. New borrowers pay 10 percent of discretionary income, and any balance that remains is forgiven after 20 years of qualifying payments, which is 240 monthly payments. An older borrower first borrowed before July 1, 2014. Older borrowers pay 15 percent of discretionary income, and any balance that remains is forgiven after 25 years of qualifying payments, which is 300 monthly payments.

The date that matters is the date of your first federal student loan, not the date of your largest loan, and not the date you graduated. If you are not sure when you first borrowed, check your loan record at studentaid.gov.

Both versions share the same payment cap. Your IBR payment can never be more than your standard 10 year payment. If the IBR formula gives a higher number, you pay the standard amount instead.

Partial financial hardship: the test that was removed

Partial financial hardship was the old eligibility test for IBR. Before the change, you could only enroll if your calculated IBR payment was lower than your payment under the standard 10 year plan.

Congress removed that requirement on July 4, 2025, when the One Big Beautiful Bill Act was signed. The requirement no longer exists. Any borrower with eligible loans can now enroll in IBR, whatever their income. If you applied for IBR before July 2025 and were turned down because you did not show a partial financial hardship, you can apply again now.

The removal changes who can enroll, but it does not change what IBR saves you. If your income is high, the IBR formula may give a payment at or above the standard amount, and the cap means you would simply pay the standard amount. In that case IBR gives no monthly saving.

How your IBR payment is calculated

Your IBR payment comes from three numbers: your adjusted gross income, your family size, and the federal poverty guideline for that family size.

Step 1: Find your adjusted gross income

Adjusted gross income, known as AGI, is the income figure on your most recent federal tax return. If your income has changed a lot since that return, you can usually provide other proof of income, such as pay stubs.

Step 2: Work out your discretionary income

For IBR, discretionary income is your adjusted gross income minus 150 percent of the federal poverty guideline for your family size. This is the loan definition of discretionary income, and it is different from the budgeting meaning, which is take home pay minus your real essential spending.

The poverty guideline is published each year by the Department of Health and Human Services, known as HHS. For 2026, the guideline for a single person in the 48 contiguous states and Washington, D.C. is $15,960 a year, and $5,680 is added for each additional family member. For a family of four, the 2026 guideline is $33,000 a year.

For a single borrower in 2026, the protected amount is 150 percent of $15,960, which is $23,940 a year. Only income above that amount counts toward the payment. If your adjusted gross income is at or below the protected amount, your discretionary income is zero, and your IBR payment can be $0 a month. A $0 payment can still count toward forgiveness, if you are enrolled and you recertify each year.

To learn more about the two meanings of this term, read our guide What Is Discretionary Income?

Step 3: Apply your percentage and divide by 12

Multiply your yearly discretionary income by 10 percent if you are a new borrower, or by 15 percent if you are an older borrower. Then divide by 12 to get the monthly payment, and compare it with your standard 10 year payment. You pay the lower of the two.

Worked example: new borrower vs older borrower

This illustration uses real 2026 poverty guideline figures. The result is not your payment.

Suppose a single borrower with no dependents has an adjusted gross income of $48,000 a year. The 2026 poverty guideline for one person is $15,960, so 150 percent of it is $23,940. Discretionary income is $48,000 minus $23,940, which is $24,060 a year. As a new borrower, at 10 percent, the yearly payment is $2,406, which is $200.50 a month. As an older borrower, at 15 percent, the yearly payment is $3,609, which is $300.75 a month.

Now compare both with the standard payment. Suppose the borrower owes $35,000 at 6 percent interest, repaid over 10 years. The standard monthly payment would be about $389 a month. Both IBR payments are below the cap.

Forgiveness after 20 or 25 years

If a balance remains after 20 years of qualifying payments for a new borrower, or 25 years for an older borrower, it may be forgiven. Qualifying payments are payments made while enrolled in the plan, on time, for the full amount due, while meeting the other rules, including yearly recertification.

Forgiveness is not automatic, and it is not quick. Keep a record of your payments and check your payment count with your servicer each year. A balance forgiven under IDR may be treated as taxable income in the year it is forgiven, depending on the tax law in force at that time. Do not assume it will be tax free.

Public Service Loan Forgiveness, known as PSLF, is separate. It forgives Direct Loans after 120 qualifying monthly payments, or 10 years, while working full time for a qualifying employer.

IBR in 2026: what changed, and what is next

The Saving on a Valuable Education plan, known as SAVE, has ended. A court order ended SAVE in March 2026, and no new borrowers are enrolled in it. If you were on SAVE, check your servicer messages and your account at studentaid.gov for your own deadline.

PAYE and ICR are being phased out. According to studentaid.gov, both end no later than July 1, 2028, and borrowers on those plans must select a new plan by that date. IBR does not have a closing date. It stays open for loans disbursed before July 1, 2026.

RAP, the Repayment Assistance Plan, launched on July 1, 2026, under the One Big Beautiful Bill Act. RAP applies to Direct Loans disbursed at any time. In broad terms, RAP sets payments at 1 to 10 percent of adjusted gross income, depending on income, and forgiveness is reported as 30 years. Those figures come from draft regulations and secondary reporting, so treat them as provisional until you see them on the official page at studentaid.gov.

How to apply for IBR, step by step

1. List every federal loan you hold, with its type, balance, interest rate, disbursement date, and servicer, from your account at studentaid.gov.
2. Find the date you first borrowed a federal student loan. That date decides whether you pay 10 percent or 15 percent, and whether forgiveness comes after 20 or 25 years.
3. Work out your discretionary income with the steps above, using your adjusted gross income and family size.
4. Use the loan simulator at studentaid.gov to estimate your payment under IBR, and compare it with your standard payment.
5. Apply for IDR at studentaid.gov, using your FSA ID, and choose IBR. If you were turned down before July 2025 for lack of partial financial hardship, you can apply again.
6. Set a yearly reminder to recertify your income and family size. Missing recertification can raise your payment to the standard 10 year amount.
7. Check your payment count each year with your servicer. Build a small emergency fund alongside the loan payments, so a surprise bill does not become new debt. Our guide How Do I Build an Emergency Fund From Zero? gives a step by step plan that starts with a small starter goal.

Common mistakes to avoid

First, do not use an old poverty guideline. The guideline changes each year, so a figure from an old article will give a wrong payment. Second, do not assume you cannot enroll because your income is too high. Since July 4, 2025, there is no partial financial hardship test for IBR. Third, do not use the wrong percentage. Check your first borrowing date, not your graduation date. Fourth, do not confuse the two meanings of discretionary income. Fifth, do not miss recertification, because a missed deadline can raise your payment to the standard amount. Sixth, do not assume a low payment means the loan is shrinking. If your payment is lower than the monthly interest, your balance grows.

FAQ

What are the requirements for IBR?

You need eligible federal loans disbursed before July 1, 2026, a completed IDR application at studentaid.gov, and yearly recertification. There is no income test and no partial financial hardship test since July 4, 2025.

How much will I pay under IBR?

It depends on when you first borrowed. New borrowers, who first borrowed on or after July 1, 2014, pay 10 percent of discretionary income. Older borrowers pay 15 percent. Your payment is capped at the standard 10 year amount.

Can my IBR payment be $0?

Yes. If your adjusted gross income is at or below 150 percent of the poverty guideline for your family size, your discretionary income is zero, so your payment can be $0. For a single borrower in 2026, that threshold is $23,940 a year. A $0 payment can still count toward forgiveness.

Do I need to show a partial financial hardship for IBR?

No, not any more. The One Big Beautiful Bill Act removed that requirement on July 4, 2025. Now any borrower with eligible loans can enroll, whatever their income.

Which loans qualify for IBR?

Direct Loans and FFEL loans disbursed before July 1, 2026 qualify, including Direct Consolidation Loans. Perkins Loans qualify only after consolidation into a Direct Loan. Parent PLUS Loans do not qualify in their original form. Private student loans never qualify.

Conclusion

IBR sets your federal student loan payment at 10 percent of discretionary income if you first borrowed on or after July 1, 2014, or 15 percent if you borrowed before that date, with forgiveness after 20 or 25 years. For a single borrower in 2026, discretionary income is adjusted gross income minus $23,940, which is 150 percent of the $15,960 poverty guideline.

The requirements are simple now: eligible Direct or FFEL loans disbursed before July 1, 2026, a completed application at studentaid.gov, and yearly recertification. There is no partial financial hardship test since July 4, 2025, and your payment can never be more than the standard 10 year amount.

This article is for general information and education only. It is not legal or financial advice.