How does Income-Driven Repayment (IDR) Forgiveness Work?

Income-Driven Repayment (IDR) plans are student loan repayment plans that set your monthly payment based on how much money you earn and the size of your family. If you stay on an IDR plan long enough, any remaining balance on your federal student loans can be forgiven.

Here’s how it works:

1. You enroll in an IDR plan.
   Your payment is tied to your income, not your loan amount. If you earn less, you pay less.
   
2. You make payments each month.
   Every 12 months, you must recertify your income and family size so your payment amount stays accurate.
   
3. The clock toward forgiveness runs while you’re in the plan.
   Each month you make a qualifying payment counts toward your forgiveness timeline.
   
   • Some loans are forgiven after 20 years of payments.
     
   • Others take 25 years, depending on your loan type and the specific IDR plan.
     
4. At the end of 20 or 25 years, the rest of your loan is forgiven.
   If you still owe money after you reach the required number of years, the remaining balance is erased.
   
5. **Under current rules, forgiveness after 20 or 25 years is scheduled to be tax-free through at least 2025, and future tax rules may change.
   

Important: Starting July 1, 2026, updated IDR rules will apply, but the basic idea stays the same: affordable payments now, and forgiveness after many years of consistent payments.