Income-driven repayment for student loans: how it works and alternatives

The program can make a big difference in the affordability of federal student loan payments

Man in a suit holding a piece of paper in his hands that reads "Income-based repayment plan"
The plans base monthly payments on your income and family size
(Image credit: designer491 / Getty Images)

For many student loan borrowers, income-driven repayment (IDR) plans can make monthly payments much more manageable. Rather than simply divvying up the total owed across the loan term, IDR plans base the monthly payments on a borrower's income and family size.

But lately, borrowers have faced some whiplash on the option's availability. "In February, a U.S. appeals court blocked" one IDR plan, the Saving on a Valuable Education (SAVE) plan, and "called into question parts of other IDR plans." As a result, the Department of Education "closed applications for all IDR plans," said Investopedia. Borrowers already enrolled were also affected, as they could not recertify their loans.

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Becca Stanek, The Week US

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.