Should You Switch IDR Plans in 2026? What to Know About SAVE, PAYE, IBR, and ICR

If you’re in an income-driven repayment (IDR) plan in 2026, not all plans are functioning the same way. SAVE is expected to be terminated once a proposed December 2025 settlement is approved. PAYE remains open for now but is scheduled to close to new enrollments in 2027. IBR and ICR remain available and operational.

That distinction matters because only active plans continue to generate payment and forgiveness credit. Being in a plan that’s ending doesn’t lock in progress. It can leave your account unable to accrue credit while required changes are sorted out.

Here’s what that looks like in real terms:

• If you were eligible for forgiveness in 2025 and stayed in SAVE, that eligibility wasn’t lost—but forgiveness can’t be processed until you move into an active plan.

• If you’re in PAYE or ICR, those plans are still processing payments and forgiveness credit.

• If you’re choosing between IBR, PAYE, or ICR, the key question in 2026 is which plans are still generating credit—not which plan looked best before SAVE existed.

Yes. SAVE is expected to be terminated, PAYE is scheduled to close to new enrollments in 2027, and IBR and ICR remain available in 2026.

Here’s how each plan stands:

SAVE

In December 2025, the Education Department and the State of Missouri announced a proposed settlement to end the SAVE plan. The settlement is still awaiting court approval.

Under the proposal, SAVE would be permanently terminated. New enrollments are no longer being accepted. Pending applications are expected to be denied. Borrowers currently in SAVE will be required to move into another repayment plan before forgiveness can be processed.

PAYE (Pay As You Earn)

PAYE remains open to borrowers who meet eligibility requirements. New enrollments are scheduled to end on July 1, 2027. Existing PAYE borrowers can stay in the plan during the wind-down period and continue earning forgiveness and PSLF credit.

IBR (Income-Based Repayment)

IBR remains available. New enrollments are allowed, and the plan is part of the long-term repayment structure. Recent legislative changes removed the partial financial hardship requirement, although payments are still calculated under IBR rules.

ICR (Income-Contingent Repayment)

ICR is also open to enrollment. It qualifies for forgiveness and Public Service Loan Forgiveness (PSLF). Payments are often higher than under other IDR plans, which is why ICR is typically used when other options aren’t available.

In 2026, IBR and ICR remain open to new enrollments. PAYE is still open, but only to borrowers who meet narrow eligibility rules and is scheduled to close.

For most borrowers, the practical difference comes down to enrollment access and forgiveness timelines: PAYE is limited and winding down, while IBR and ICR remain available for ongoing enrollment and credit.

Here’s how the plans compare today.

Who can enroll

• IBR is open to new enrollments and remains part of the long-term repayment system. Borrowers with Parent PLUS loans can also access IBR after consolidating into an eligible Direct Consolidation Loan.

• PAYE is open only to borrowers who meet strict “new borrower” requirements. New enrollments are scheduled to end on July 1, 2027.

• ICR is open to all eligible borrowers and is often used when other IDR plans aren’t available.

Forgiveness timelines

• PAYE offers forgiveness after 20 years of qualifying payments.

• IBR requires 25 years of qualifying payments for borrowers with graduate school loans. For undergraduate-only borrowers, forgiveness occurs after 20 years under old IBR and 25 years under new IBR, depending on when the loans were taken out.

• ICR also leads to forgiveness, but the longer timeline and higher payments often increase total cost.

Related: How Income-Driven Repayment Loan Forgiveness Works

Payment structure

• IBR payments are 10–15% of discretionary income, based on when the loans were taken out.

• PAYE uses 10%, but only for borrowers who meet eligibility rules.

• ICR uses a different calculation formula and usually produces higher monthly payments.

Switching income-driven repayment plans only matters when your current plan is ending or no longer able to process payments and forgiveness credit.

Here’s how that plays out in practice:

If you’re still in SAVE

SAVE is expected to be terminated once the proposed settlement is approved. Staying in SAVE means your loans will eventually have to transition into another repayment plan. Switching earlier places your loans into an active plan that can continue processing payments and forgiveness credit, rather than remaining idle until a required change occurs.

If you’re already in PAYE or ICR

These plans remain active. Switching plans usually doesn’t change outcomes unless another plan offers a lower payment or a shorter forgiveness timeline based on eligibility.

If you’re choosing a plan going forward

The main issue is availability. IBR remains open to new enrollments and is the most durable option going forward. PAYE is available to some borrowers now but is limited to a shrinking group and scheduled to close.

No. Switching between income-driven repayment plans does not reset your forgiveness progress.

Here’s what happens when you change plans:

• Prior qualifying months still count. Payments made under SAVE, PAYE, IBR, or ICR all count toward the 20- or 25-year forgiveness timeline. When you switch plans, those qualifying months carry over.

• Temporary gaps are usually processing delays. During a plan change, servicer portals may briefly show missing or incomplete counts while records update. Prior qualifying months are applied once processing is complete.

• Processing forbearance months still count. If your account is placed in administrative or processing forbearance while an IDR application is reviewed, those months may be credited toward IDR forgiveness once the plan change is finalized.

Switching IDR plans is typically quick when applications are submitted with complete income data. Processing is fastest when IRS income data is used instead of manual document uploads.

Here’s how the process works:

• Submit an IDR application. Apply online through StudentAid.gov or uploading a paper application through your loan servicer’s website. You can select a specific plan, such as IBR, PAYE, or ICR, subject to eligibility.

• Authorize IRS income data. Allowing automatic income retrieval from the IRS speeds up processing. When IRS data is used, most IDR applications are processed within a few business days. Applications that rely on manually uploaded income documents usually take longer.

• Plan activation and payment update. Once approved, your servicer updates your repayment plan and monthly payment. During processing, some account portals temporarily label the plan as “IDR” before the final plan name appears.

• Save confirmation records. Keep a copy of your application confirmation and updated loan summary. These records matter if questions come up later about payment amounts or qualifying credit.

Switching between qualifying income-driven repayment plans does not interrupt Public Service Loan Forgiveness.

Payments made under IBR, PAYE, and ICR all qualify for PSLF as long as employment and loan requirements are met. Changing IDR plans does not reset PSLF progress. After a plan change, servicers typically update PSLF payment counts once the new plan is active.

Related: How Public Service Loan Forgiveness Works