Compare every federal student loan repayment plan: Standard 10-year, SAVE, IBR, PAYE, and PSLF. See monthly payments, total interest, and forgiveness timelines. 2026 income limits.
Federal Student Loan Repayment Plans: Which Is Right for You?
The best repayment plan depends on three factors: your income relative to your debt, whether you work for a qualifying PSLF employer, and how you value paying less now vs. paying less overall.
Plan Comparison at a Glance
Plan
Payment Based On
Forgiveness
Best If
Standard 10-Year
Fixed (no income consideration)
None
Debt < 1× annual income
SAVE
5–10% discretionary income
10–25 years
Low income, large balance
IBR
10–15% discretionary income
20–25 years
Pre-2014 borrowers
PAYE
10% discretionary income
20 years
Post-Oct 2011 Direct Loans
PSLF + Any IDR
IDR payment
10 years
Government/nonprofit workers
The IDR Forgiveness Tax Question
Under current law (through at least 2025, likely extended), forgiven amounts under SAVE, IBR, and PAYE are NOT taxable at the federal level. Some states still tax forgiven amounts. PSLF forgiveness is tax-free everywhere. If you’re pursuing IDR forgiveness over 20–25 years, the forgiven balance could be large — plan ahead.
Should You Refinance Federal Loans?
Refinancing converts federal loans to private loans — permanently eliminating access to IDR plans, PSLF, and federal forbearance protections. Only refinance if: you’re not pursuing PSLF, you have stable income that won’t need IDR, AND you can get a meaningfully lower rate. Current federal grad rates are 7.05%–9.08%; if you can get 5.5% privately and your employment is stable, refinancing saves real money.
For calculating payoff on private loans, use our Loan Calculator.
Frequently Asked Questions
The math answer: if your student loan rate is lower than your expected investment return, investing wins mathematically. Federal student loan rates in 2026 run 6.53%–9.08%. The S&P 500 has averaged ~10%/year historically, or ~7% inflation-adjusted. If your rate is 6.53% and you have a long time horizon, investing has a slight mathematical edge. But this ignores risk and psychology — guaranteed 7% return (paying off debt) vs uncertain 10% return (investing). A hybrid approach: invest enough to get your full 401(k) employer match (guaranteed 50%–100% return), then aggressively pay loans.
SAVE (Saving on a Valuable Education) replaced REPAYE in 2023 and is the most generous IDR plan for most borrowers. Monthly payment = 5% of discretionary income for undergraduate loans (10% for graduate-only, 5%–10% blended for mixed). Discretionary income = AGI minus 225% of the federal poverty guideline for your family size. Example: $55,000 income, single, no dependents: FPL = $15,650. 225% FPL = $35,213. Discretionary income = $19,787. SAVE payment = $19,787 × 5% ÷ 12 = $82/month. After 10 years (for undergrad balances under $12,000) or 20 years (most borrowers), remaining balance is forgiven.
Public Service Loan Forgiveness forgives remaining federal loan balances after 120 qualifying payments (10 years) while working full-time for a qualifying employer: federal, state, local, or tribal government, or a 501(c)(3) nonprofit. Qualifying loans: Direct Loans only (FFEL and Perkins loans can be consolidated). Qualifying payments: any income-driven repayment plan. Submit an Employment Certification Form annually to track progress. PSLF was poorly administered until 2020 reforms — over 700,000 borrowers have now received forgiveness. If you might qualify, enroll in IDR immediately and submit certification paperwork.
Federal student loans are discharged (forgiven) upon death or Total and Permanent Disability (TPD). For death discharge, the servicer requires a death certificate. For TPD, you must apply through the TPD discharge program with documentation from VA, SSA, or a physician. Private student loans vary by lender — some discharge, some pursue the estate. If you have a cosigner on private loans, their liability may continue even after your death, which is why cosigner release is important.
The Supreme Court struck down the Biden administration's broad $10,000 forgiveness program in 2023. As of 2026, there is no universal forgiveness program. Available forgiveness options: PSLF (10 years in public service), IDR forgiveness (20–25 years on income-driven repayment), Teacher Loan Forgiveness ($17,500 after 5 years in low-income schools), and various career-specific forgiveness programs. The political situation remains dynamic — check studentaid.gov for current program status.
