How Is Income-Based Repayment Calculated? (2026)

Your Income-Based Repayment (IBR) payment is 10% or 15% of your discretionary income — your adjusted gross income (AGI) minus 150% of the federal poverty guideline for your family size — divided by 12, and never more than the 10-year Standard amount.

• Your income drives the number, not your balance. Owing more doesn’t raise your IBR payment. Balance only matters through the payment cap.

• The percentage depends on when you borrowed. New IBR is 10%; Old IBR is 15%.

• Low income can mean a $0 payment. If your AGI is at or below 150% of the poverty guideline, your payment is $0.

• You can estimate yours in minutes. Run your numbers through the IBR calculator, then check the math below.

Four things determine your IBR payment: your AGI, your family size, the federal poverty guideline, and which version of IBR you’re on. Your loan balance is not one of them — it only sets the ceiling on your payment, which we cover below.

Your AGI. This is line 11 of your Form 1040 — your income after above-the-line deductions, not your gross pay and not your take-home pay. It’s the single biggest input.

Your family size. This is you, your spouse if you file jointly, your children who receive more than half their support from you (including a child expected during the year), and anyone else living with you who you support more than halfway. It is not always the same as your tax household.

The federal poverty guideline. The U.S. Department of Health and Human Services publishes these every January. IBR protects 150% of the guideline for your family size. For 2026, in the 48 contiguous states, 150% of the guideline is $23,940 for a household of one, $32,460 for two, $40,980 for three, and $49,500 for four. Alaska and Hawaii use higher figures.

Your IBR version. New IBR — for borrowers whose first loan was disbursed on or after July 1, 2014 — uses 10% of discretionary income. Old IBR — for borrowers who had loans before that date — uses 15%. The version also sets your forgiveness term: 20 years for New IBR, 25 for Old IBR.

IBR is a legacy plan now. It’s available only for federal loans disbursed before July 1, 2026; borrowers whose loans came later use the Repayment Assistance Plan instead, which is calculated from full AGI on a different scale.

The formula is the same for every borrower — only the percentage changes. Work it in four steps.

1. Start with your AGI. Pull it from your most recent tax return, or from current income documentation if your income has changed.

2. Subtract 150% of the poverty guideline for your family size. What’s left is your discretionary income. If the result is zero or negative, your payment is $0.

3. Multiply by 10% (New IBR) or 15% (Old IBR). That’s your annual payment.

4. Divide by 12. That’s your monthly payment.

Worked example — single, $50,000 income, New IBR. Your AGI is $50,000. Subtract $23,940 (150% of the 2026 single-person guideline) to get $26,060 in discretionary income. Ten percent is $2,606 a year, or about $217 a month. On Old IBR, the same borrower pays 15% — about $326 a month.

Worked example — earning $30,000. A single borrower with a $30,000 AGI has $6,060 in discretionary income ($30,000 − $23,940). On New IBR, that’s $606 a year — about $50 a month.

Worked example — family of four. With a $60,000 AGI and a family of four, you subtract $49,500 to get $10,500 in discretionary income. On New IBR, that’s $1,050 a year, or about $88 a month. If that same family earned $45,000 — below the $49,500 protected amount — discretionary income is zero and the payment is $0.

Why your balance barely matters

Notice that balance never entered the math. A borrower earning $50,000 pays about $217 a month on New IBR whether they owe $30,000 or $150,000. If your balance doubled or tripled tomorrow, your IBR payment wouldn’t move — the formula only looks at income and family size.

Balance changes your payment in one direction only: down, and only when it’s small. That’s because of the cap.

The 10-year Standard cap

Your IBR payment is capped at what you would have paid under the 10-year Standard Repayment Plan, measured on your balance at the time you entered IBR. Your monthly payment is the lower of the two numbers — the income formula above, or that Standard amount.

For most borrowers the Standard amount is far higher than the formula payment, so the cap never binds. A $70,000 balance carries a 10-year Standard payment well above $217, so the $50,000 earner just pays the $217. But a small balance can produce a Standard payment below your formula amount. A $15,000 balance might carry a 10-year Standard payment around $170 a month, depending on your interest rate — below the $217 formula figure — so you’d pay the $170 instead.

The cap is a ceiling, not a floor. If your income rises, your payment climbs with the formula until it reaches the cap, then stops there while you keep earning forgiveness credit. If your income falls, the payment drops again. And once your calculated payment lands under $5, it rounds to $0; between $5 and $10, it rounds to $10.

Your IBR payment is a snapshot of one year’s income and family size. When either changes, the number changes — and you have some control over the inputs.

Recertification and off-cycle recalculation. You recertify your income and family size every 12 months, and the payment resets based on your latest figures. If you miss the deadline, your payment reverts to the Standard amount and unpaid interest capitalizes. You don’t have to wait a full year to adjust, though — if your income drops mid-year after a job loss, a pay cut, or a leave, you can send updated documentation and request a recalculation right away. Servicers generally process these off-cycle requests quickly.

Which income document you submit. The formula runs on AGI, but you choose what proves it. If your last tax return was inflated by a one-time bonus, a stock sale, or severance, it can overstate what you earn day to day. A recent pay stub often reflects your current income better, and you’re allowed to submit one instead of the return. It’s also worth checking your above-the-line deductions — contributions to a traditional IRA, an HSA, or self-employment retirement accounts lower your AGI, which lowers your discretionary income and your payment.

Filing status if you’re married. File jointly and the calculation uses both spouses’ income; file separately and it uses only yours, which usually lowers the payment. Filing separately can raise your combined tax bill, so weigh the two. The choice isn’t necessarily locked in for good, either — if you filed separately, you can often amend to a joint return within three years, so it’s worth asking a tax professional about your year. The math also feels different depending on who owes. When both spouses have loans and share the household’s payments, joint filing spreads the obligation; when only one spouse has loans, joint filing pulls the other spouse’s income into the calculation with no offset. The married-filing-separately and spouse-income guides walk through both cases.

Estimating before you apply. To see your number without doing the arithmetic by hand, run your income, family size, and filing status through the IBR calculator. It applies the current poverty guidelines, checks the Standard cap, and handles spouse-loan proration. For the plan itself — eligibility, the application, forgiveness — see the full Income-Based Repayment guide, or the income-driven repayment overview to compare IBR with the other plans.