IDR Plans for Residents: PAYE, IBR, SAVE, and ICR

As a resident doctor with more than $200,000 of federal loans IDR is not just a choice but essential; it is the only way to keep monthly payments reasonable and to avoid crushing your income. There are four different plans and these plans vary quite a bit. You have to choose carefully since this choice affects both your budget and eligibility for PSLF.

What IDR Plans Do

IDR plans calculate monthly payments based on a percentage of disposable income rather than total debt. Disposable income is the amount remaining after income is reduced according to poverty guidelines based on family size.

For example, if someone makes $65,000 in 2026, use poverty guidelines for singles (which are $15,060 in 2026):

150% of that is roughly $22,590. Disposable income therefore is $65,000 minus $22,590 for $42,410. Annual payments are 10% of disposable income at $4,241. Monthly amount is thus about $353 and fixed and independent of debt.

Payments depend only on income and family size.

PAYE — Pay As You Earn

PAYE is generally preferred for forgiveness through PSLF by 2026 because payments are fixed at 10 percent of discretionary income with exclusions at poverty guidelines at 150 percent. PAYE is approved under PSLF. Forgiveness through SAVE requires 20 years but PAYE has no upper limit on payments. PAYE became legal in 2011 but eligibility disputes lasted until mid 2024. PAYE is stable but eligibility for PSLF might be interrupted if balance was due before October 1, 2007. You need new disbursements after October 1, 2011 to be eligible. Most people are now eligible now.

IBR — Income-Based Repayment

There are two different versions of IBR depending when you first received a Direct Loan. Most people today use the newer version. Monthly payments equal 150 percent of poverty guideline level and this version gets PSLF eligibility. PAYE usually has better monthly payments and also gets PSLF but has limited terms according to income and ends sooner. Another version does not set any income limits and extends longer regardless of individual income.

SAVE — Saving on a Valuable Education

In 2023 SAVE was the biggest plan for undergrad loans and replaced PAYE that year. SAVE offered many advantages such as lower monthly payments for undergrad loans (5% versus 10%), higher poverty threshold (225% versus 150%, so less disposable income and lower payments), and subsidy of interest that stops unpaid interest from growing. Generally SAVE borrowers pay less monthly compared to PAYE or Pay for Undergraduate Program (PAYE).

The problem: SAVE has been partially blocked by federal courts since July 2024.

Federal Circuit Courts have issued injunctions blocking different parts of SAVE. Current SAVE borrowers are in administrative forbearance and do not currently have to make payments. However, no qualifying payments will accumulate after 2026 for those who remain in forbearance. This is an extremely serious matter for PSLF applicants. Anyone currently in SAVE who is on forbearance should switch right away to PAYE or Pay for Undergraduate (PAYE) and contact their servicer immediately because this is the most urgent step for anyone affected.

ICR — Income-Contingent Repayment

Payments via ICR are usually much smaller: 20 percent of income after income above higher level is disregarded or a fixed amount for twelve years which is adjusted according to income; PAYE and IBR usually result in higher payments. Poverty guidelines for ICR are generally less favorable and PSLF is an important tool. This is more significant for people who consolidate PLUS loans today. Consolidation of PLUS loans and choosing ICR lets PSLF to be used; this is its main use. Most borrowers who got loans as graduate students find PAYE or IBR to result in lower payments; ICR rarely does.

How to Choose

People prefer to use PAYE by 2026 if eligible. PAYE is cheapest and has best eligibility for PSLF and fixed capped payments. If you are not eligible for PAYE, you should use IBR because that is open to new borrowers for PSLF. Saving is best because you want to avoid losing qualifying months for PSLF and you cannot afford to lose; if you are in forbearance switch to SAVE status. Use ICR only for consolidation of PLUS loans for eligibility of PSLF, there is no other way to get PLUS loans eligible for PSLF.

The Annual Recertification Requirement

To keep receiving IDR payments you must recertify annually. You upload new financial documents and then your new payments are reassessed.

You will face two results if you miss recertification deadline: servicers may switch you to a standard plan for 10 years and you pay more and your different payments won't count towards eligibility for Public Service Loan Forgiveness.

So set a reminder six months from now. Usually you spend about 20 minutes at studentaid.gov to use IRS Data Retrieval Tool to import data automatically.

Submitting the PSLF Employment Certification Form

When you start residency begin pursuing PSLF immediately and submit Employment Certification Form (ECF) early. This form certifies your program qualifies for PSLF and counts correct payments. Most programs that qualify are at hospitals, public hospitals or VA facilities and non profits; profit programs do not qualify. Check early to avoid difficulties later on and use Medical Debt Calculator both during residency and later as attending doctor and use this for comparing with other repayment options too.