Your Income-Driven Repayment (IDR) payment might be high because your income increased, your family size decreased, your previous plan expired, you're on a plan that rises incrementally, you filed taxes jointly with a higher-earning spouse, or your loan balance is high enough that your payment covers more interest. IDR payments are recalculated yearly based on your income and family size, so higher earnings, less dependents, or changes in federal poverty guidelines can all raise your bill.
What can I do? If you disagree with how your loan servicer calculated your IDR payment after you applied, contact your servicer. It's possible they made a mistake. You may also be able to switch plans to get a lower monthly payment amount if there wasn't a mistake.
Under all of the income-driven repayment (IDR) plans, your required monthly payment amount may increase or decrease if your income or family size changes from one year to the next or if you switch repayment plan. Loan Simulator can help you determine if your current plan is still the best option for you.
How is discretionary income used to calculate monthly payment amounts on income-driven repayment (IDR) plans? A percentage of the borrower's discretionary income is divided by 12 to determine the monthly payment amount.
Why do some people pay a higher interest rate on their student loan than others? The interest rates for plan 2 and 3 loans are higher than for other plans because they include a “real interest rate” of up to 3%. This is added to the loan on top of the rate of RPI inflation.
Those who need longer-term student loan payment assistance for their federal loans may apply for income-based repayment, deferment, or forbearance. Refinancing or consolidating federal or private student loans† could potentially help you lower your monthly student loan payments.
The main drawbacks of Income-Driven Repayment (IDR) plans are longer repayment periods (20-25 years), leading to significantly higher total interest paid, potential for ballooning loan balances (negative amortization) if payments don't cover interest, mandatory annual income/family size recertification, and the risk of taxable forgiveness (though temporarily tax-free through 2025). Borrowers must actively manage these plans and may face complexity or servicing issues.
Among those who do borrow, the average debt at graduation is $27,420 — or $6,855 for each year of a four-year degree at a public university. Recent college graduates earn $24,000 more annually than peers of the same age whose highest degree is a high school diploma.
Apply for another available IDR plan
If you can't afford your current payments and haven't yet applied for the SAVE Plan, consider applying for the next lowest-payment IDR Plan available to you.
You're on a graduated repayment plan
Graduated repayment plans start low and increase every two years. If you're on one, this is likely why your payment went up. You can switch to a different plan if the new amount doesn't fit your budget.
While everyone's situation is different, guidelines from the Department of Education suggest that student debt payments should stay around or below 20% of your discretionary income – or 8% of your total income each month. Discretionary income is what remains after taxes and other necessities are covered.
Switch to Direct Debit
You might make a further repayment after you've finished paying off your loan. To avoid this, you can switch to repaying by Direct Debit.
The #1 most common FAFSA mistake is leaving fields blank, followed closely by name/Social Security Number mismatches, but other major errors include incorrect marital/parental info, not reading questions carefully (especially "you" vs. "parent"), and filing late or not at all. You must complete all questions, entering '0' or 'N/A' if applicable, use exact legal names, and ensure accurate SSNs to avoid delays or rejections, with many sources highlighting the importance of filing on time for maximum aid.
You can only qualify as an independent student on the FAFSA if you are at least 24 years of age, married, on active duty in the U.S. Armed Forces, financially supporting dependent children, an orphan (both parents deceased), a ward of the court, or an emancipated minor.
IDR plans calculate your monthly payment amount based on your income and family size. So if your income increases, so does your payment amount.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.