Whose Income Counts for Income-Driven Repayment Plans?
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By Mark Kantrowitz

June 1, 2020

Do income-driven repayment plans count the income of both spouses, or just the spouse who was the student?

The answer depends on the type of income-driven repayment and the tax-filing status of the borrower.

With all of the income-driven repayment plans, the loan payments are based on the joint income of a married borrower and the borrower’s spouse if they file their federal income tax return as married filing jointly.

Income-contingent repayment (ICR), income-based repayment (IBR) and pay-as-you-earn repayment (PAYE) base the monthly loan payments on just the borrower’s income, if a married borrower files their federal income tax return as married filing separately.

Revised pay-as-you-earn repayment (REPAYE), however, has a marriage penalty. It bases the monthly payment on the joint income of borrower and spouse even if they file separate federal income tax returns.

Which income counts is summarized in this table.

Income-Driven Repayment Calculators

Below is a description of each income-driven repayment. Use our calculator for each plan to compare the monthly loan payments and total payments for each of the income-driven repayment plans. The calculators also evaluate the cost of the income-driven repayment plans under public service loan forgiveness.

  • Income-Contingent Repayment Calculator (ICR). Income-contingent repayment bases the monthly payment on 20% of discretionary income, which is defined as the amount by which income exceeds 100% of the poverty line, with a 25-year repayment term.
  • Income-Based Repayment Calculator (IBR). Income-based repayment bases the monthly payment on 15% of discretionary income, which is defined as the amount by which income exceeds 150% of the poverty line, with a 25-year repayment term.
  • Pay-As-You-Earn Repayment Calculator (PAYE). Pay-as-you-earn repayment bases the monthly payment on 10% of discretionary income, which is defined as the amount by which income exceeds 150% of the poverty line, with a 20-year repayment term.
  • Revised Pay-As-You-Earn Repayment Calculator (REPAYE). Revised pay-as-you-earn repayment bases the monthly payment on 10% of discretionary income, which is defined as the amount by which income exceeds 150% of the poverty line. The repayment term is 20 years for borrowers with just undergraduate loans and 25 years for borrowers with at least one graduate loan.



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