The IDR landscape was scrambled by the courts in 2024, by OBBBA in 2025, and by the rollout calendar through 2026. The 2026 picture:
The only IDR plan available to new borrowers (loans first disbursed on or after July 1, 2026). Payments are tiered to AGI: $10/month for AGI at or below $10,000, rising in bands to 10% of AGI for the top tier, with a $50/month per-dependent reduction. Remaining balance is forgiven after 360 qualifying payments (30 years). Interest does not capitalize during RAP, and the government subsidizes any shortfall between the calculated payment and the accruing interest so the principal does not grow. RAP is administratively simpler than the prior alphabet soup, but it has no upper cap on the monthly payment: at the top 10%-of-AGI band, and with no discretionary- income deduction to soften it, a graduate whose AGI climbs into the high six figures pays more under RAP than under the Standard 10-Year plan, with no relief. Borrowers on a high-income career track (medicine, law, big-tech engineering) should model both side-by-side before enrolling — if projected total RAP payments exceed the loan balance plus interest under Standard, RAP is the worse plan and the only reason to stay in it is to keep PSLF eligibility (see below).
Remains available to pre-2026 borrowers. Payments are 10% (post-2014 borrowers) or 15% (pre-2014 borrowers) of discretionary income, with forgiveness after 20 or 25 years respectively. Pre-2026 borrowers stranded by the SAVE shutdown have IBR as their only IDR path forward.
The default for borrowers who do not enroll in an IDR plan. Fixed monthly payment that pays the loan in full over 10 years. The only path available on private loans (in roughly equivalent form) and the right choice for any borrower who can afford it and who does not have a credible PSLF or 20–30-year forgiveness pathway.
All terminated by OBBBA. Borrowers who were enrolled were transitioned to IBR (legacy) or to RAP (new disbursements). Any planning advice written before mid-2025 that references SAVE is obsolete.
Taxation of forgiveness. The American Rescue Plan Act made student-loan forgiveness tax-free at the federal level only through December 31, 2025 — and that exclusion has now sunset. As of 2026, IDR forgiveness (including RAP forgiveness at year 30) is once again taxable as ordinary income at the federal level: a $200,000 balance forgiven at year 30 becomes a $200,000 taxable event in the forgiveness year, on top of whatever else the borrower earns. PSLF is the exception — PSLF forgiveness remains permanently tax-free under its own statute and never depended on the ARPA exclusion. Private-loan forgiveness and some state treatments differ. This ordinary-income hit is the “tax bomb” the borrower-advocacy community refers to, and for IDR forgiveness it is now live, not a future risk. Whether Congress restores the exclusion is a political question, not a planning one; plan as if the bomb is real, because for IDR it currently is.