Federal Poverty Line

The federal poverty line is a set of income thresholds published every year by the U.S. Department of Health and Human Services (HHS). It's used to determine eligibility for many federal programs — Medicaid, SNAP, ACA subsidies — and to set the floor for discretionary income in every IDR repayment plan.

How it scales

The poverty line goes up with household size. As of the 2025 HHS Poverty Guidelines for the 48 contiguous states and DC: $15,650 for a household of one, with about $5,500 added for each additional person. Alaska and Hawaii have separate, higher thresholds.

How IDR plans use it

Every IDR plan starts by calculating a multiple of the poverty line for your household size. The SAVE Plan uses 225% (so $35,213 for one person, $47,588 for two, etc.). PAYE and IBR use 150%. ICR uses 100%. Any income above that multiple is "discretionary" and feeds into the payment formula.

Why the multiple matters

Doubling the poverty multiple (from 150% to a hypothetical 300%) would dramatically lower payments for most borrowers. This is why SAVE's 225% threshold is more generous than the 150% used by older plans.

When it changes

HHS releases new poverty guidelines every January. IDR calculations typically use the guidelines that were in effect when you certified your income, so a January re-certification will reflect the new year's numbers.