What income-driven repayment means

Income-driven repayment (IDR) plans cap your monthly federal student loan payments at a percentage of your discretionary income rather than basing payments on the amount you borrowed. For physicians completing residency with $200,000 or more in educational debt, IDR plans are often essential during the low-income training years and may also be the foundation of a long-term forgiveness strategy.

There are four main IDR plans currently available for federal loans. Each has different terms, but the core principle is the same: your payment adjusts based on what you earn, not what you owe.

The four IDR plans

The Saving on a Valuable Education (SAVE) plan replaced the older REPAYE plan. Payments are 5% of discretionary income for undergraduate loans and 10% for graduate loans (most medical school debt). Discretionary income is calculated as your adjusted gross income minus 225% of the federal poverty guideline. Remaining balances are forgiven after 20 years (undergraduate) or 25 years (graduate). Interest that exceeds your monthly payment does not capitalize, meaning your balance does not grow if your payments are less than the interest accruing. For residents earning $55,000 to $65,000, monthly payments under SAVE may be $200 to $400, significantly less than standard repayment.
Income-Based Repayment caps payments at 10% of discretionary income (for new borrowers after July 2014) or 15% (for borrowers before that date). Forgiveness after 20 or 25 years. You must demonstrate partial financial hardship to enroll. Monthly payments are generally slightly higher than SAVE for the same income level.
Pay As You Earn caps payments at 10% of discretionary income. Available only to new borrowers after October 2007 with loan disbursements after October 2011. Forgiveness after 20 years. PAYE does not include the interest subsidy that SAVE offers.
Income-Contingent Repayment caps payments at 20% of discretionary income or the amount you would pay on a 12-year fixed plan, whichever is less. Forgiveness after 25 years. ICR has the highest payments of the four plans and is generally used only when no other IDR plan is available (such as for Parent PLUS loans consolidated into a Direct Consolidation Loan).

IDR during residency

Residency salaries typically range from $58,000 to $75,000 (varies by institution, specialty, and PGY year) depending on location, specialty, and year. On a standard 10-year repayment plan, a $250,000 loan balance would require monthly payments of approximately $2,600 to $2,800. Under SAVE at a $60,000 salary, your monthly payment would be roughly $250 to $350. This difference is why nearly all residents with federal loans enroll in an IDR plan.

Important
Even if you plan to pay off your loans aggressively as an attending physician, enrolling in IDR during residency preserves cash flow and keeps you eligible for Public Service Loan Forgiveness if you work at a qualifying employer. There is no penalty for paying more than your IDR minimum or for switching to standard repayment later.

The forgiveness tradeoff

Under IDR, any remaining balance is forgiven after 20 to 25 years of payments. However, for physicians who earn attending-level salaries ($250,000+) for most of their career, the total amount paid over 20 to 25 years may exceed the original loan balance. In those cases, an aggressive payoff strategy after residency (3 to 5 years of high payments) may cost less overall than riding out IDR for 25 years.

The exception is Public Service Loan Forgiveness (PSLF), which forgives the remaining balance after only 10 years of qualifying payments while working at a nonprofit or government employer. For physicians who plan to work at academic medical centers, VA hospitals, or community health centers, PSLF combined with IDR is often the most financially advantageous strategy. See our PSLF Guide.

How to enroll

Enroll through your federal loan servicer’s website or through StudentAid.gov. You will need to provide income documentation (typically your most recent tax return or pay stubs). You must recertify your income annually to remain on the plan.

Next steps

Use the federal Loan Simulator (free) to estimate your payments under each plan. If you are entering residency, enroll in SAVE before your first payment is due. If you are still in school, understanding these options now helps you make smarter borrowing decisions.

Related pages

PSLF: Who Actually Qualifies
Military Medical Scholarships
The True Cost of Becoming a Doctor
Medical School Debt

Last verified: March 2026