diff --git a/changelog.d/idr-cap-before-proration.fixed.md b/changelog.d/idr-cap-before-proration.fixed.md
new file mode 100644
index 00000000000..be92e4d1d2e
--- /dev/null
+++ b/changelog.d/idr-cap-before-proration.fixed.md
@@ -0,0 +1 @@
+Apply the Income-Based Repayment and Pay As You Earn 10-year standard payment cap before the spousal balance proration, as 34 CFR 685.209(f)(2)-(3) and (g)(1) order them.
diff --git a/policyengine_us/programs.yaml b/policyengine_us/programs.yaml
index c1bc9f0b631..4cb94f1a03b 100644
--- a/policyengine_us/programs.yaml
+++ b/policyengine_us/programs.yaml
@@ -1790,7 +1790,7 @@ programs:
     variable: income_based_repayment_payment
     parameter_prefix: gov.ed.student_loans.income_based_repayment
     verified_start_year: 2026
-    notes: Monthly payment (15% or 10% for new borrowers of income above 150% of the poverty guideline on the latest return's AGI, spousal and FFEL proration, cap at the borrower's own 10-year standard payment on their current Direct and FFEL balances, small payment adjustment); zero for borrowers with a Direct Loan made on or after July 1, 2026; tax-dependent borrowers treated as ineligible; interest and forgiveness not modeled; not subtracted from household net income
+    notes: Monthly payment (15% or 10% for new borrowers of income above 150% of the poverty guideline on the latest return's AGI, cap at the borrower's own 10-year standard payment on their current Direct and FFEL balances, then spousal and FFEL proration, small payment adjustment); zero for borrowers with a Direct Loan made on or after July 1, 2026; tax-dependent borrowers treated as ineligible; interest and forgiveness not modeled; not subtracted from household net income
 
   - id: save_plan
     name: SAVE plan (counterfactual)
@@ -1814,7 +1814,7 @@ programs:
     variable: pay_as_you_earn_payment
     parameter_prefix: gov.ed.student_loans.pay_as_you_earn
     verified_start_year: 2026
-    notes: Monthly payment (10% of income above 150% of the poverty guideline on the latest return's AGI, spousal and FFEL proration, cap at the borrower's own 10-year standard payment on their current Direct and FFEL balances, small payment adjustment); tax-dependent borrowers treated as ineligible; zero for borrowers with a Direct Loan made on or after July 1, 2026; enrollment limits (new borrower, repaying under PAYE on July 1, 2024) and the June 30, 2028 end not modeled; interest and forgiveness not modeled; not subtracted from household net income
+    notes: Monthly payment (10% of income above 150% of the poverty guideline on the latest return's AGI, cap at the borrower's own 10-year standard payment on their current Direct and FFEL balances, then spousal and FFEL proration, small payment adjustment); tax-dependent borrowers treated as ineligible; zero for borrowers with a Direct Loan made on or after July 1, 2026; enrollment limits (new borrower, repaying under PAYE on July 1, 2024) and the June 30, 2028 end not modeled; interest and forgiveness not modeled; not subtracted from household net income
 
   - id: income_contingent_repayment
     name: Income-Contingent Repayment
diff --git a/policyengine_us/tests/policy/baseline/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.yaml b/policyengine_us/tests/policy/baseline/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.yaml
index 93a9b823204..21803726095 100644
--- a/policyengine_us/tests/policy/baseline/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.yaml
@@ -2,10 +2,10 @@
 #   discretionary income = max(AGI - 1.5 x poverty guideline, 0)
 #   payment = lesser of
 #     15% (new borrowers 10%) x discretionary income / 12
-#       x own Direct balance / couple's Direct and FFEL balance ((g)(1)(i)-(ii))
 #     and the borrower's own 10-year standard payment on their Direct and FFEL
-#       loans (1098e(b)(6)(A); (f)(2)(ii), (f)(3)(ii))
-#       x own Direct balance / own Direct and FFEL balance ((g)(1)(ii))
+#       loans (1098e(b)(6)(A); (f)(2)(ii), (f)(3)(ii)),
+#   times own Direct balance / couple's Direct and FFEL balance
+#     ((g)(1)(i)-(ii), applied to the lesser-of amount),
 #   rounded to the cent; under 5 -> 0; 5 to under 10 -> 10; at most the
 #   borrower's Direct balance.
 # 2026 guideline in the 48 states: 15,960 + 5,680 per additional person.
@@ -193,10 +193,10 @@
         members: [person1, person2]
         state_code: TX
   output:
-    # 1.5 x 21,640 = 32,460; 15% x 47,540 / 12 = 594.25.
-    # Shares 75% and 25%: 445.69 and 148.56, below the caps of 666.12 and
-    # 222.04.
-    income_based_repayment_payment: [445.69, 148.56]
+    # 1.5 x 21,640 = 32,460; 15% x 47,540 / 12 = 594.25. Own standard
+    # payments 666.12 and 222.04. min(594.25, 666.12) x 75% = 445.69 and
+    # min(594.25, 222.04) x 25% = 55.51 (685.209(f)(2)-(3), then (g)(1)).
+    income_based_repayment_payment: [445.69, 55.51]
 
 - name: Case 9, married filing separately excludes the spouse's income.
   period: 2026-01
@@ -446,10 +446,12 @@
         state_code: TX
   output:
     # Issue #10411 example. 1.5 x 21,640 = 32,460; 15% x 48,000 / 12 = 600,
-    # split 50/50: 300 each. Standard payments: 30,000 / 120 = 250 and
-    # 30,000 x 0.01 / (1 - 1.01 ^ -120) = 430.41. min(300, 250) = 250 and
-    # min(300, 430.41) = 300 (20 U.S.C. 1098e(b)(6)(A)).
-    income_based_repayment_payment: [250, 300]
+    # with balance shares of 50% each. Standard payments: 30,000 / 120 = 250
+    # and 30,000 x 0.01 / (1 - 1.01 ^ -120) = 430.4128. min(600, 250) x 50% =
+    # 125 and min(600, 430.4128) x 50% = 215.2064 -> 215.21 (20 U.S.C.
+    # 1098e(b)(6)(A); 685.209(f)(2)-(3), then (g)(1)). Capping after
+    # proration would give min(300, 250) = 250 and min(300, 430.41) = 300.
+    income_based_repayment_payment: [125, 215.21]
 
 - name: Case 19, each spouse's own standard payment caps a high income.
   period: 2026-01
@@ -474,9 +476,10 @@
         members: [person1, person2]
         state_code: TX
   output:
-    # 15% x (96,460 - 32,460) / 12 = 800, split 50/50: 400 each.
-    # min(400, 250) = 250 and min(400, 430.41) = 400.
-    income_based_repayment_payment: [250, 400]
+    # 15% x (96,460 - 32,460) / 12 = 800, above both standard payments.
+    # min(800, 250) x 50% = 125 and min(800, 430.4128) x 50% = 215.21.
+    # Capping after proration would give 250 and 400.
+    income_based_repayment_payment: [125, 215.21]
 
 - name: Case 20, spouses keep their own new-borrower and other-borrower rates.
   period: 2026-01
@@ -503,9 +506,11 @@
         state_code: TX
   output:
     # Discretionary income (92,460 - 32,460) / 12 = 5,000. Each spouse's own
-    # standard payment is 333.06. New borrower: min(10% x 5,000 x 50%,
-    # 333.06) = 250. Other borrower: min(15% x 5,000 x 50%, 333.06) = 333.06.
-    income_based_repayment_payment: [250, 333.06]
+    # standard payment is 333.0615. New borrower: min(10% x 5,000 = 500,
+    # 333.0615) x 50% = 166.53. Other borrower: min(15% x 5,000 = 750,
+    # 333.0615) x 50% = 166.53. Capping after proration would give 250 and
+    # 333.06.
+    income_based_repayment_payment: [166.53, 166.53]
 
 - name: Case 21, a spouse's FFEL debt counts in the joint proration.
   period: 2026-01
@@ -532,10 +537,12 @@
         state_code: TX
   output:
     # IBR analogue of rulespec-us#1455 C16. 15% x (60,000 - 32,460) / 12 =
-    # 344.25. The borrower pays 344.25 x 10,000 / 40,000 = 86.06
-    # (685.209(g)(1)(i)-(ii)), under their own standard payment of 111.02; the
-    # spouse has no Direct Loans and owes nothing under the plan.
-    income_based_repayment_payment: [86.06, 0]
+    # 344.25, above the borrower's own standard payment of 111.0205. The
+    # borrower pays min(344.25, 111.0205) x 10,000 / 40,000 = 27.7551 ->
+    # 27.76 (685.209(f)(2)-(3), then (g)(1)(i)-(ii)); the spouse has no Direct
+    # Loans and owes nothing under the plan. Capping after proration would
+    # give min(86.06, 111.02) = 86.06.
+    income_based_repayment_payment: [27.76, 0]
 
 - name: Case 22, a borrower's own FFEL loans reduce the Direct Loan payment.
   period: 2026-01
@@ -574,10 +581,11 @@
         members: [person2]
         state_code: TX
   output:
-    # 685.209(g)(1)(ii): x 10,000 / 40,000 = 25%. Cap on all 40,000 of
-    # eligible loans: 444.08, of which the Direct Loans carry 25% = 111.02.
-    # person1: min(200.75 x 25%, 111.02) = 50.19.
-    # person2: min(950.75 x 25%, 111.02) = 111.02.
+    # 685.209(g)(1)(ii): x 10,000 / 40,000 = 25%. Standard payment on all
+    # 40,000 of eligible loans: 444.08. No spouse debt, so the order of cap
+    # and proration does not matter.
+    # person1: min(200.75, 444.08) x 25% = 50.19.
+    # person2: min(950.75, 444.08) x 25% = 111.02.
     income_based_repayment_payment: [50.19, 111.02]
 
 - name: Case 23, a Direct Loan balance under 10 dollars caps the 10 dollar minimum payment.
@@ -634,8 +642,129 @@
   output:
     # The spouse's Direct Loans stay eligible loans (685.209(b)(5)); (d)(5)
     # only stops the plan from repaying them. (60,000 - 1.5 x 20,000) / 12 =
-    # 2,500. Income-Based Repayment 15% = 375 and Pay As You Earn 10% = 250,
-    # each x 30,000 / 60,000 = 187.50 and 125, under the 333.06 standard
-    # payment; the spouse owes 0.
-    income_based_repayment_payment: [187.5, 0]
+    # 2,500. Income-Based Repayment: min(15% x 2,500 = 375, 333.0615) x
+    # 30,000 / 60,000 = 166.53. Pay As You Earn: min(10% x 2,500 = 250,
+    # 333.0615) x 50% = 125. The spouse owes 0. Capping after proration
+    # would give IBR min(187.50, 333.06) = 187.50.
+    income_based_repayment_payment: [166.53, 0]
     pay_as_you_earn_payment: [125, 0]
+
+- name: Case 25, joint filers at 6 percent pay each standard payment times their balance share.
+  period: 2026-01
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 40
+        federal_student_loan_balance: 30_000
+        federal_student_loan_interest_rate: 0.06
+      person2:
+        age: 38
+        federal_student_loan_balance: 30_000
+        federal_student_loan_interest_rate: 0.06
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        adjusted_gross_income: 80_460
+    households:
+      household:
+        members: [person1, person2]
+        state_code: TX
+  output:
+    # 15% x (80,460 - 32,460) / 12 = 600. Each spouse's own standard payment
+    # is 30,000 x 0.005 / (1 - 1.005 ^ -120) = 333.0615. min(600, 333.0615) x
+    # 50% = 166.53 each. Capping after proration would give min(300, 333.06)
+    # = 300 each.
+    income_based_repayment_payment: [166.53, 166.53]
+
+- name: Case 26, a low income-based amount is prorated the same way under either order.
+  period: 2026-01
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 40
+        federal_student_loan_balance: 30_000
+        federal_student_loan_interest_rate: 0.06
+      person2:
+        age: 38
+        federal_student_loan_balance: 30_000
+        federal_student_loan_interest_rate: 0.06
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        adjusted_gross_income: 40_460
+    households:
+      household:
+        members: [person1, person2]
+        state_code: TX
+  output:
+    # 15% x (40,460 - 32,460) / 12 = 100, below each 333.0615 standard
+    # payment. min(100, 333.0615) x 50% = 50 each.
+    income_based_repayment_payment: [50, 50]
+
+- name: Case 27, with 10 and 15 percent rates the cap binds on one spouse only.
+  period: 2026-01
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 30
+        federal_student_loan_balance: 30_000
+        federal_student_loan_interest_rate: 0.06
+        is_income_based_repayment_new_borrower: true
+      person2:
+        age: 40
+        federal_student_loan_balance: 30_000
+        federal_student_loan_interest_rate: 0.06
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        adjusted_gross_income: 68_460
+    households:
+      household:
+        members: [person1, person2]
+        state_code: TX
+  output:
+    # Discretionary income (68,460 - 32,460) / 12 = 3,000. New borrower:
+    # min(10% x 3,000 = 300, 333.0615) x 50% = 150, under the cap. Other
+    # borrower: min(15% x 3,000 = 450, 333.0615) x 50% = 166.53, at the cap.
+    # Capping after proration would give 150 and min(225, 333.06) = 225.
+    income_based_repayment_payment: [150, 166.53]
+
+- name: Case 28, both spouses' FFEL loans enter the proration of each spouse's capped amount.
+  period: 2026-01
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 40
+        federal_student_loan_balance: 10_000
+        federal_ffel_loan_balance: 10_000
+        federal_student_loan_interest_rate: 0.06
+      person2:
+        age: 38
+        federal_student_loan_balance: 20_000
+        federal_ffel_loan_balance: 20_000
+        federal_student_loan_interest_rate: 0.06
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        adjusted_gross_income: 80_460
+    households:
+      household:
+        members: [person1, person2]
+        state_code: TX
+  output:
+    # 15% x (80,460 - 32,460) / 12 = 600. Own standard payments on Direct and
+    # FFEL loans: 20,000 -> 222.0410 and 40,000 -> 444.0820. Balance shares,
+    # (g)(1)(i) x (g)(1)(ii): 10,000 / 60,000 = 1/6 and 20,000 / 60,000 = 1/3.
+    # person1: min(600, 222.0410) / 6 = 37.0068 -> 37.01.
+    # person2: min(600, 444.0820) / 3 = 148.0273 -> 148.03.
+    # Capping after proration (cap x own Direct fraction of 50%) would give
+    # min(100, 111.02) = 100 and min(200, 222.04) = 200.
+    income_based_repayment_payment: [37.01, 148.03]
diff --git a/policyengine_us/tests/policy/baseline/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.yaml b/policyengine_us/tests/policy/baseline/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.yaml
index 2b2773a3e4a..f1f096904f5 100644
--- a/policyengine_us/tests/policy/baseline/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.yaml
@@ -2,10 +2,10 @@
 #   discretionary income = max(AGI - 1.5 x poverty guideline, 0)
 #   payment = lesser of
 #     10% x discretionary income / 12
-#       x own Direct balance / couple's Direct and FFEL balance ((g)(1)(i)-(ii))
 #     and the borrower's own 10-year standard payment on their Direct and FFEL
-#       loans ((f)(2)(ii))
-#       x own Direct balance / own Direct and FFEL balance ((g)(1)(ii))
+#       loans ((f)(2)(ii)),
+#   times own Direct balance / couple's Direct and FFEL balance
+#     ((g)(1)(i)-(ii), applied to the lesser-of amount),
 #   rounded to the cent; under 5 -> 0; 5 to under 10 -> 10; at most the
 #   borrower's Direct balance.
 # 2026 guideline in the 48 states: 15,960 + 5,680 per additional person.
@@ -79,10 +79,11 @@
         members: [person1, person2]
         state_code: TX
   output:
-    # 1.5 x 21,640 = 32,460; 10% x 47,540 / 12 = 396.17.
-    # Shares 2/3 and 1/3: 264.11 and 132.06, below the caps of 444.08 and
-    # 222.04.
-    pay_as_you_earn_payment: [264.11, 132.06]
+    # 1.5 x 21,640 = 32,460; 10% x 47,540 / 12 = 396.17. Own standard
+    # payments 444.0820 and 222.0410. min(396.17, 444.08) x 2/3 = 264.11 and
+    # min(396.17, 222.0410) x 1/3 = 74.0137 -> 74.01. Capping after
+    # proration would give min(132.06, 222.04) = 132.06 for the spouse.
+    pay_as_you_earn_payment: [264.11, 74.01]
 
 - name: Case 4, each spouse's own standard payment caps joint filers who both borrowed.
   period: 2026-01
@@ -107,9 +108,12 @@
         members: [person1, person2]
         state_code: TX
   output:
-    # 10% x (150,000 - 32,460) / 12 = 979.50; shares 80% and 20%: 783.60 and
-    # 195.90, above each spouse's own standard payment of 444.08 and 111.02.
-    pay_as_you_earn_payment: [444.08, 111.02]
+    # 10% x (150,000 - 32,460) / 12 = 979.50, above each spouse's own
+    # standard payment of 444.0820 and 111.0205. Shares 80% and 20%:
+    # 444.0820 x 80% = 355.2656 -> 355.27 and 111.0205 x 20% = 22.2041 ->
+    # 22.20. Capping after proration would give min(783.60, 444.08) = 444.08
+    # and min(195.90, 111.02) = 111.02.
+    pay_as_you_earn_payment: [355.27, 22.20]
 
 - name: Case 5, a payment under 5 dollars becomes zero.
   period: 2026-01
@@ -256,10 +260,11 @@
         state_code: TX
   output:
     # Issue #10411 example. 1.5 x 21,640 = 32,460; 10% x 72,000 / 12 = 600,
-    # split 50/50: 300 each. Standard payments: 30,000 / 120 = 250 and
-    # 30,000 x 0.01 / (1 - 1.01 ^ -120) = 430.41. min(300, 250) = 250 and
-    # min(300, 430.41) = 300.
-    pay_as_you_earn_payment: [250, 300]
+    # with balance shares of 50% each. Standard payments: 30,000 / 120 = 250
+    # and 30,000 x 0.01 / (1 - 1.01 ^ -120) = 430.4128. min(600, 250) x 50% =
+    # 125 and min(600, 430.4128) x 50% = 215.2064 -> 215.21. Capping after
+    # proration would give 250 and 300.
+    pay_as_you_earn_payment: [125, 215.21]
 
 - name: Case 11, each spouse's own standard payment caps a high income.
   period: 2026-01
@@ -284,9 +289,10 @@
         members: [person1, person2]
         state_code: TX
   output:
-    # 10% x (128,460 - 32,460) / 12 = 800, split 50/50: 400 each.
-    # min(400, 250) = 250 and min(400, 430.41) = 400.
-    pay_as_you_earn_payment: [250, 400]
+    # 10% x (128,460 - 32,460) / 12 = 800, above both standard payments.
+    # min(800, 250) x 50% = 125 and min(800, 430.4128) x 50% = 215.21.
+    # Capping after proration would give 250 and 400.
+    pay_as_you_earn_payment: [125, 215.21]
 
 - name: Case 12, a spouse's FFEL debt counts in the joint proration.
   period: 2026-01
@@ -312,10 +318,12 @@
         members: [person1, person2]
         state_code: TX
   output:
-    # 10% x (61,000 - 32,460) / 12 = 237.83. The borrower pays
-    # 237.83 x 10,000 / 40,000 = 59.46 (685.209(g)(1)(i)-(ii)), under their own
-    # standard payment of 111.02; the spouse owes nothing.
-    pay_as_you_earn_payment: [59.46, 0]
+    # 10% x (61,000 - 32,460) / 12 = 237.83, above the borrower's own
+    # standard payment of 111.0205. The borrower pays min(237.83, 111.0205) x
+    # 10,000 / 40,000 = 27.7551 -> 27.76 (685.209(f)(2), then
+    # (g)(1)(i)-(ii)); the spouse owes nothing. Capping after proration would
+    # give min(59.46, 111.02) = 59.46.
+    pay_as_you_earn_payment: [27.76, 0]
 
 - name: Case 13, a payment within half a cent below 5 dollars rounds to 5 and rises to 10.
   period: 2026-01
@@ -339,3 +347,33 @@
     # 24,539.52 - 23,940 = 599.52; 10% x 599.52 / 12 = 4.996, which rounds to
     # 5.00 and rises to 10 (the modeling choice in the documentation).
     pay_as_you_earn_payment: 10
+
+- name: Case 14, both spouses' FFEL loans enter the proration of each spouse's capped amount.
+  period: 2026-01
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 40
+        federal_student_loan_balance: 10_000
+        federal_ffel_loan_balance: 10_000
+        federal_student_loan_interest_rate: 0.06
+      person2:
+        age: 38
+        federal_student_loan_balance: 20_000
+        federal_ffel_loan_balance: 20_000
+        federal_student_loan_interest_rate: 0.06
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        adjusted_gross_income: 104_460
+    households:
+      household:
+        members: [person1, person2]
+        state_code: TX
+  output:
+    # 10% x (104,460 - 32,460) / 12 = 600. Own standard payments 222.0410 and
+    # 444.0820; balance shares 1/6 and 1/3 ((g)(1)(i) x (g)(1)(ii)).
+    # min(600, 222.0410) / 6 = 37.01 and min(600, 444.0820) / 3 = 148.03.
+    pay_as_you_earn_payment: [37.01, 148.03]
diff --git a/policyengine_us/tests/test_student_loan_idr_cap_order_property.py b/policyengine_us/tests/test_student_loan_idr_cap_order_property.py
new file mode 100644
index 00000000000..649af88f3a2
--- /dev/null
+++ b/policyengine_us/tests/test_student_loan_idr_cap_order_property.py
@@ -0,0 +1,285 @@
+"""Hypothesis checks: the IBR and PAYE 10-year cap applies before proration.
+
+34 CFR 685.209(f)(2) and (f)(3) make an Income-Based Repayment or Pay As You
+Earn payment the lesser of the income-based amount A = rate x discretionary
+income and the borrower's own 10-year standard payment S on their Direct and
+FFEL loans. 685.209(g)(1) then multiplies that lesser amount by the balance
+share: own Direct / couple's (Direct + FFEL). So, with own Direct d, own FFEL
+f and the couple's Direct and FFEL total T:
+
+    P = min(A, S) x d / T
+
+Properties, for generated balances, interest rates, new-borrower status and
+discretionary income:
+
+1. Differential: with no spouse debt, P equals min(A x d / (d + f),
+   S x d / (d + f)), written here independently of the model.
+2. Identity: P equals min(A, S) x d / T, and a borrower whose spouse has no
+   eligible debt pays what a single filer pays at the same income.
+3. Bound: P <= S x d / (d + f) and P <= A x d / T.
+4. Monotonicity: P never falls as income rises, and never rises as the
+   spouse's balance rises.
+
+The model's payment also rounds to the cent, applies the small-payment rule
+of 685.209(g)(1)(iii) and caps the payment at the Direct Loan balance. That
+post-processing is a nondecreasing function of P, so each property is
+checked on the model's payment against references passed through the same
+post-processing: equalities stay equalities, and bounds and monotonicity
+carry through.
+
+Every generated couple is simulated in five variants (as drawn, with more
+income, with a larger spouse balance, with no spouse debt, and as a single
+filer) in one vectorized simulation per example.
+"""
+
+import numpy as np
+import pytest
+
+from policyengine_us import Simulation
+
+hypothesis = pytest.importorskip("hypothesis")
+st = pytest.importorskip("hypothesis.strategies")
+
+MONTH = "2026-01"
+YEAR = 2026
+# Written from the law, not read from the parameter tree.
+IBR_RATE = 0.15  # 20 U.S.C. 1098e(b)(1); 685.209(f)(3)(i)
+IBR_NEW_BORROWER_RATE = 0.10  # 20 U.S.C. 1098e(e); 685.209(f)(2)(i)
+PAYE_RATE = 0.10  # 685.209(f)(2)(i)
+STANDARD_MONTHS = 120  # 685.208(b)(1)(i)
+STANDARD_MINIMUM = 50  # 685.208(b)(1)(ii)
+SMALL_THRESHOLD = 5  # 685.209(g)(1)(iii)(A)
+SMALL_MINIMUM = 10  # 685.209(g)(1)(iii)(B)
+TOLERANCE = 0.011
+VARIANTS = ("base", "more_income", "larger_spouse_balance", "no_spouse_debt")
+
+
+def standard_payment(balance, annual_rate):
+    """10-year level payment on the balance, at least 50, at most the balance."""
+    monthly_rate = annual_rate / 12
+    if monthly_rate == 0:
+        amortized = balance / STANDARD_MONTHS
+    else:
+        amortized = (
+            balance * monthly_rate / (1 - (1 + monthly_rate) ** -STANDARD_MONTHS)
+        )
+    return min(max(amortized, STANDARD_MINIMUM), balance)
+
+
+def post_process(amount, direct_balance):
+    """Round to the cent, apply the small-payment rule, cap at the balance."""
+    rounded = round(amount, 2)
+    if rounded < SMALL_THRESHOLD:
+        adjusted = 0
+    else:
+        adjusted = max(rounded, SMALL_MINIMUM)
+    return min(adjusted, direct_balance)
+
+
+def near_threshold(amount):
+    # A reference within a cent of the 5 dollar threshold can round to the
+    # other side of it than the model's floating-point result.
+    return abs(amount - SMALL_THRESHOLD) < 0.01
+
+
+borrower = st.fixed_dictionaries(
+    {
+        "direct": st.integers(1, 150_000),
+        "ffel": st.one_of(st.just(0), st.integers(1, 100_000)),
+        "rate": st.sampled_from([0, 0.03, 0.055, 0.068, 0.12]),
+        "new_borrower": st.booleans(),
+    }
+)
+spouse = st.fixed_dictionaries(
+    {
+        "direct": st.one_of(st.just(0), st.integers(1, 150_000)),
+        "ffel": st.one_of(st.just(0), st.integers(1, 100_000)),
+        "rate": st.sampled_from([0, 0.03, 0.055, 0.068, 0.12]),
+        "new_borrower": st.booleans(),
+    }
+)
+couple = st.fixed_dictionaries(
+    {
+        "borrower": borrower,
+        "spouse": spouse,
+        # Monthly discretionary income, often enough to reach the cap.
+        "income": st.one_of(st.integers(0, 2_000), st.integers(0, 15_000)),
+        "income_rise": st.integers(1, 5_000),
+        "spouse_direct_rise": st.integers(0, 50_000),
+        "spouse_ffel_rise": st.integers(0, 50_000),
+    }
+)
+
+
+def person_input(name, loans):
+    return name, {
+        "age": {YEAR: 40},
+        "federal_student_loan_balance": {YEAR: loans["direct"]},
+        "federal_ffel_loan_balance": {YEAR: loans["ffel"]},
+        "federal_student_loan_interest_rate": {YEAR: loans["rate"]},
+        "is_income_based_repayment_new_borrower": {YEAR: loans["new_borrower"]},
+    }
+
+
+def build(couples):
+    """One situation holding every variant of every couple, in a fixed order."""
+    people, tax_units, households, marital_units = {}, {}, {}, {}
+    order = []
+
+    def add_unit(key, members, income, filing_status):
+        names = []
+        for i, loans in enumerate(members):
+            name, values = person_input(f"{key}_p{i}", loans)
+            people[name] = values
+            names.append(name)
+            order.append((key, i))
+        tax_units[key] = {
+            "members": names,
+            "filing_status": {YEAR: filing_status},
+            "income_based_repayment_discretionary_income": {MONTH: income},
+            "pay_as_you_earn_discretionary_income": {MONTH: income},
+        }
+        households[key] = {"members": names, "state_code": {YEAR: "TX"}}
+        marital_units[key] = {"members": names}
+
+    for n, c in enumerate(couples):
+        b, s = c["borrower"], c["spouse"]
+        add_unit(f"c{n}_base", [b, s], c["income"], "JOINT")
+        add_unit(f"c{n}_more_income", [b, s], c["income"] + c["income_rise"], "JOINT")
+        larger = dict(
+            s,
+            direct=s["direct"] + c["spouse_direct_rise"],
+            ffel=s["ffel"] + c["spouse_ffel_rise"],
+        )
+        add_unit(f"c{n}_larger_spouse_balance", [b, larger], c["income"], "JOINT")
+        add_unit(
+            f"c{n}_no_spouse_debt",
+            [b, dict(s, direct=0, ffel=0)],
+            c["income"],
+            "JOINT",
+        )
+        add_unit(f"c{n}_single", [b], c["income"], "SINGLE")
+    situation = {
+        "people": people,
+        "tax_units": tax_units,
+        "households": households,
+        "marital_units": marital_units,
+        "spm_units": {k: {"members": v["members"]} for k, v in households.items()},
+        "families": {k: {"members": v["members"]} for k, v in households.items()},
+    }
+    simulation = Simulation(situation=situation)
+    results = {}
+    for variable in ("income_based_repayment_payment", "pay_as_you_earn_payment"):
+        values = simulation.calculate(variable, MONTH)
+        results[variable] = {key: float(v) for key, v in zip(order, values)}
+    return results
+
+
+def plan_rate(variable, loans):
+    if variable == "pay_as_you_earn_payment":
+        return PAYE_RATE
+    return IBR_NEW_BORROWER_RATE if loans["new_borrower"] else IBR_RATE
+
+
+def check(couples):
+    results = build(couples)
+    problems = []
+    for n, c in enumerate(couples):
+        b, s = c["borrower"], c["spouse"]
+        for variable, paid in results.items():
+
+            def p(variant, i=0):
+                return paid[(f"c{n}_{variant}", i)]
+
+            for i, (own, other) in enumerate(((b, s), (s, b))):
+                if own["direct"] == 0:
+                    if p("base", i) != 0:
+                        problems.append(f"{variable} c{n}: no Direct Loans but pays")
+                    continue
+                d, f = own["direct"], own["ffel"]
+                couple_total = d + f + other["direct"] + other["ffel"]
+                a = plan_rate(variable, own) * c["income"]
+                cap = standard_payment(d + f, own["rate"])
+                share = d / couple_total
+                # 2. Identity.
+                reference = min(a, cap) * share
+                if not near_threshold(reference) and (
+                    abs(p("base", i) - post_process(reference, d)) > TOLERANCE
+                ):
+                    problems.append(
+                        f"{variable} c{n} spouse {i}: identity {p('base', i)} vs "
+                        f"{post_process(reference, d)}"
+                    )
+                # 3. Bound.
+                own_fraction = d / (d + f)
+                for bound, label in (
+                    (cap * own_fraction, "standard payment x own Direct fraction"),
+                    (a * share, "income-based amount x balance share"),
+                ):
+                    if p("base", i) > post_process(bound, d) + TOLERANCE:
+                        problems.append(
+                            f"{variable} c{n} spouse {i}: {p('base', i)} above {label}"
+                        )
+                # 4. Monotonicity in income.
+                if p("more_income", i) < p("base", i) - TOLERANCE:
+                    problems.append(f"{variable} c{n} spouse {i}: falls with income")
+            # The borrower (spouse 0) always has Direct Loans.
+            d, f = b["direct"], b["ffel"]
+            a = plan_rate(variable, b) * c["income"]
+            cap = standard_payment(d + f, b["rate"])
+            fraction = d / (d + f)
+            # 1. Differential: main's order, which agrees with no spouse debt.
+            differential = min(a * fraction, cap * fraction)
+            if not near_threshold(differential):
+                for variant in ("no_spouse_debt", "single"):
+                    if abs(p(variant) - post_process(differential, d)) > TOLERANCE:
+                        problems.append(
+                            f"{variable} c{n} {variant}: {p(variant)} vs "
+                            f"{post_process(differential, d)}"
+                        )
+            # 2. Identity: no spouse debt pays what a single filer pays.
+            if abs(p("no_spouse_debt") - p("single")) > TOLERANCE:
+                problems.append(f"{variable} c{n}: joint with no spouse debt != single")
+            # 4. Monotonicity in the spouse's balance.
+            if p("larger_spouse_balance") > p("base") + TOLERANCE:
+                problems.append(f"{variable} c{n}: rises with the spouse's balance")
+    assert not problems, "\n".join(problems)
+
+
+@hypothesis.settings(
+    max_examples=10,
+    deadline=None,
+    # Each example is a simulation of up to 40 people. Shrinking a failure
+    # would run hundreds more, so a failing example is reported as drawn.
+    phases=[
+        hypothesis.Phase.explicit,
+        hypothesis.Phase.reuse,
+        hypothesis.Phase.generate,
+    ],
+    suppress_health_check=[
+        hypothesis.HealthCheck.too_slow,
+        hypothesis.HealthCheck.data_too_large,
+    ],
+)
+@hypothesis.given(st.lists(couple, min_size=1, max_size=8))
+def test_cap_before_proration(couples):
+    check(couples)
+
+
+def test_cap_before_proration_hand_case():
+    # $30,000 each at 0% and 12%, $600 income-based amount: standard payments
+    # 250 and 430.41, so each spouse pays half: 125 and 215.21.
+    loans = {"ffel": 0, "new_borrower": False}
+    c = {
+        "borrower": dict(loans, direct=30_000, rate=0),
+        "spouse": dict(loans, direct=30_000, rate=0.12),
+        "income": 4_000,
+        "income_rise": 1,
+        "spouse_direct_rise": 0,
+        "spouse_ffel_rise": 0,
+    }
+    results = build([c])
+    paid = results["income_based_repayment_payment"]
+    assert paid[("c0_base", 0)] == pytest.approx(125, abs=0.01)
+    assert paid[("c0_base", 1)] == pytest.approx(215.21, abs=0.01)
+    check([c])
diff --git a/policyengine_us/variables/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.py b/policyengine_us/variables/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.py
index e8ab75d21b1..e17ddae6cd0 100644
--- a/policyengine_us/variables/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.py
+++ b/policyengine_us/variables/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.py
@@ -8,25 +8,29 @@ class income_based_repayment_payment(Variable):
     documentation = (
         "Monthly payment owed by a borrower under the Income-Based Repayment "
         "plan, assuming the borrower is enrolled in the plan and in active "
-        "repayment, not in deferment, forbearance or default. The borrower's "
-        "plan rate times discretionary income is prorated to their Direct "
-        "Loans (income_driven_repayment_balance_share, which for joint filers "
-        "divides by both spouses' Direct and FFEL loans) and capped at the "
-        "Direct Loan part of the borrower's own 10-year standard payment "
-        "(income_driven_repayment_standard_payment on their Direct and FFEL "
-        "loans, times their Direct share of those loans). The result is "
-        "rounded to the cent, given the small payment adjustment and capped "
-        "at the borrower's Direct Loan balance. Spouses keep their own rates, "
-        "so a new borrower pays 10 percent and the other spouse 15 percent of "
-        "the same discretionary income before proration, and each spouse's "
-        "cap covers only their own loans. The cap uses the current balance, "
-        "not the balance when the borrower entered the plan. The prorated "
-        "payment is rounded to the cent before the small payment adjustment, "
-        "a modeling choice: a calculated payment just under $5, such as "
-        "$4.996, rounds to $5.00 and becomes $10 rather than $0 under 34 CFR "
-        "685.209(g)(1)(iii), which sets a payment of less than $5 to $0. A "
-        "borrower with a Direct Loan made on or after July 1, 2026 cannot use "
-        "the plan and owes nothing under it."
+        "repayment, not in deferment, forbearance or default. The payment is "
+        "the lesser of the borrower's plan rate times discretionary income "
+        "and the borrower's own 10-year standard payment "
+        "(income_driven_repayment_standard_payment, on their own Direct and "
+        "FFEL loans), under 34 CFR 685.209(f)(2) and (f)(3). That lesser "
+        "amount is then prorated to the borrower's Direct Loans under "
+        "685.209(g)(1) (income_driven_repayment_balance_share, which for "
+        "joint filers divides by both spouses' Direct and FFEL loans). The "
+        "result is rounded to the cent, given the small payment adjustment "
+        "and capped at the borrower's Direct Loan balance. Spouses keep their "
+        "own rates, so a new borrower pays 10 percent and the other spouse 15 "
+        "percent of the same discretionary income, and each spouse's "
+        "standard payment covers only their own loans. Because the proration "
+        "applies after the cap, a joint filer whose income-based amount "
+        "exceeds their standard payment pays that standard payment times "
+        "their balance share. The cap uses the current balance, not the "
+        "balance when the borrower entered the plan. The payment is rounded "
+        "to the cent before the small payment adjustment, a modeling choice: "
+        "a calculated payment just under $5, such as $4.996, rounds to $5.00 "
+        "and becomes $10 rather than $0 under 34 CFR 685.209(g)(1)(iii), "
+        "which sets a payment of less than $5 to $0. A borrower with a Direct "
+        "Loan made on or after July 1, 2026 cannot use the plan and owes "
+        "nothing under it."
     )
     unit = USD
     definition_period = MONTH
@@ -53,24 +57,16 @@ def formula(person, period, parameters):
         discretionary_income = person.tax_unit(
             "income_based_repayment_discretionary_income", period
         )
-        # 685.209(g)(1)(i)-(ii) prorate the income-based amount to the
-        # borrower's Direct Loans. 20 U.S.C. 1098e(b)(6)(A) and 685.209(f)(2)(ii),
-        # (f)(3)(ii) cap the payment on all of the borrower's eligible loans at
-        # their own 10-year standard payment; the Direct Loans carry the
-        # (g)(1)(ii) part of that cap.
+        # 20 U.S.C. 1098e(b)(6)(A) and 685.209(f)(2)(ii), (f)(3)(ii) make the
+        # payment the lesser of the income-based amount and the borrower's own
+        # 10-year standard payment on their eligible loans. 685.209(g)(1)
+        # adjusts the payment amounts calculated under (f)(1) through (3):
+        # (g)(1)(i)(B) and (g)(1)(ii) multiply that lesser amount by the
+        # balance shares, so the proration follows the cap.
         balance_share = person(
             "income_driven_repayment_balance_share", period.this_year
         )
         balance = person("federal_student_loan_balance", period.this_year)
-        eligible_balance = balance + person(
-            "federal_ffel_loan_balance", period.this_year
-        )
-        direct_fraction = np.divide(
-            balance,
-            eligible_balance,
-            out=np.zeros_like(balance),
-            where=eligible_balance > 0,
-        )
         standard_payment = person("income_driven_repayment_standard_payment", period)
         # Payments are set in whole cents. Rounding before the small payment
         # test keeps an exact $5.00 from falling below the threshold through
@@ -78,10 +74,7 @@ def formula(person, period, parameters):
         # within half a cent below $5 to $5.00, a modeling choice described in
         # the documentation.
         prorated_payment = np.round(
-            min_(
-                rate * discretionary_income * balance_share,
-                standard_payment * direct_fraction,
-            ),
+            min_(rate * discretionary_income, standard_payment) * balance_share,
             2,
         )
         small_payment = p.income_driven_repayment.small_payment
diff --git a/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_balance_share.py b/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_balance_share.py
index c199aa4deaf..05ddc5cc6c8 100644
--- a/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_balance_share.py
+++ b/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_balance_share.py
@@ -17,7 +17,10 @@ class income_driven_repayment_balance_share(Variable):
         "plans do not repay FFEL loans. The product is the person's Direct "
         "Loan balance divided by the couple's combined Direct and FFEL "
         "balance. Married people filing separately are in separate tax units, "
-        "so only their own loans count."
+        "so only their own loans count. Under the Income-Based Repayment and "
+        "Pay As You Earn plans the share multiplies the lesser of the "
+        "income-based amount and the borrower's own 10-year standard payment, "
+        "since (g)(1) adjusts the amount calculated under (f)(2) and (f)(3)."
     )
     unit = "/1"
     definition_period = YEAR
diff --git a/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_standard_payment.py b/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_standard_payment.py
index 83d2358d965..984cf202c34 100644
--- a/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_standard_payment.py
+++ b/policyengine_us/variables/gov/ed/student_loans/income_driven_repayment/income_driven_repayment_standard_payment.py
@@ -10,8 +10,8 @@ class income_driven_repayment_standard_payment(Variable):
     label = "Income-driven repayment 10-year standard payment cap"
     documentation = (
         "What the borrower would pay on the 10-year standard repayment plan "
-        "on their own eligible loans, the most the borrower pays under the "
-        "Income-Based Repayment and Pay As You Earn plans (20 U.S.C. "
+        "on their own eligible loans, the cap on the income-based amount under "
+        "the Income-Based Repayment and Pay As You Earn plans (20 U.S.C. "
         "1098e(b)(6)(A): 'for all loans made to the borrower under part B or "
         "D'). Eligible loans are Direct and FFEL loans other than parent PLUS "
         "loans and excepted consolidation loans, so this is the 10-year "
@@ -20,8 +20,14 @@ class income_driven_repayment_standard_payment(Variable):
         "One standard plan minimum covers the Direct and FFEL loans together, "
         "and the payment is no more than the eligible balance. A joint filer's "
         "spouse's loans do not enter it: 34 CFR 685.209(e)(2)(i) counts them "
-        "only in the (g) proration. The cap uses the current balance, not the "
-        "balance when the borrower began paying under the plan."
+        "only in the (g) proration. The plans take the lesser of the "
+        "income-based amount and this payment (685.209(f)(2), (f)(3)) and "
+        "then prorate that lesser amount by "
+        "income_driven_repayment_balance_share (685.209(g)(1)), so a joint "
+        "filer whose income-based amount exceeds this payment pays this "
+        "payment times their balance share. The cap uses the current "
+        "balance, not the balance when the borrower began paying under the "
+        "plan."
     )
     unit = USD
     definition_period = MONTH
diff --git a/policyengine_us/variables/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.py b/policyengine_us/variables/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.py
index 902f2100ca6..7142081e6a4 100644
--- a/policyengine_us/variables/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.py
+++ b/policyengine_us/variables/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.py
@@ -8,27 +8,31 @@ class pay_as_you_earn_payment(Variable):
     documentation = (
         "Monthly payment owed by a borrower under the Pay As You Earn plan, "
         "assuming the borrower is enrolled in the plan and in active "
-        "repayment, not in deferment, forbearance or default. The plan rate "
-        "times discretionary income is prorated to the borrower's Direct "
-        "Loans (income_driven_repayment_balance_share, which for joint filers "
-        "divides by both spouses' Direct and FFEL loans) and capped at the "
-        "Direct Loan part of the borrower's own 10-year standard payment "
-        "(income_driven_repayment_standard_payment on their Direct and FFEL "
-        "loans at their own interest rate, times their Direct share of those "
-        "loans). The result is rounded to the cent, given the small payment "
+        "repayment, not in deferment, forbearance or default. The payment is "
+        "the lesser of the plan rate times discretionary income and the "
+        "borrower's own 10-year standard payment "
+        "(income_driven_repayment_standard_payment, on their own Direct and "
+        "FFEL loans at their own interest rate), under 34 CFR 685.209(f)(2). "
+        "That lesser amount is then prorated to the borrower's Direct Loans "
+        "under 685.209(g)(1) (income_driven_repayment_balance_share, which "
+        "for joint filers divides by both spouses' Direct and FFEL loans). "
+        "The result is rounded to the cent, given the small payment "
         "adjustment and capped at the borrower's Direct Loan balance. Each "
-        "spouse's cap covers only their own loans. As with the Income-Based "
-        "Repayment plan, the cap uses the current balance, not the balance "
-        "when the borrower entered the plan. A borrower with a Direct Loan "
-        "made on or after July 1, 2026 cannot use the plan and owes nothing "
-        "under it. The other limits on who can repay under the plan are not "
-        "modeled: being a new borrower under 34 CFR 685.209(b)(13)(i), "
-        "repaying under the plan on July 1, 2024, and the plan's end on June "
-        "30, 2028 (685.209(c)(4)). The prorated payment is rounded to the "
-        "cent before the small payment adjustment, a modeling choice: a "
-        "calculated payment just under $5, such as $4.996, rounds to $5.00 "
-        "and becomes $10 rather than $0 under 685.209(g)(1)(iii), which sets "
-        "a payment of less than $5 to $0."
+        "spouse's standard payment covers only their own loans. Because the "
+        "proration applies after the cap, a joint filer whose income-based "
+        "amount exceeds their standard payment pays that standard payment "
+        "times their balance share. As with the Income-Based Repayment plan, "
+        "the cap uses the current balance, not the balance when the borrower "
+        "entered the plan. A borrower with a Direct Loan made on or after "
+        "July 1, 2026 cannot use the plan and owes nothing under it. The "
+        "other limits on who can repay under the plan are not modeled: being "
+        "a new borrower under 34 CFR 685.209(b)(13)(i), repaying under the "
+        "plan on July 1, 2024, and the plan's end on June 30, 2028 "
+        "(685.209(c)(4)). The payment is rounded to the cent before the small "
+        "payment adjustment, a modeling choice: a calculated payment just "
+        "under $5, such as $4.996, rounds to $5.00 and becomes $10 rather "
+        "than $0 under 685.209(g)(1)(iii), which sets a payment of less than "
+        "$5 to $0."
     )
     unit = USD
     definition_period = MONTH
@@ -48,24 +52,17 @@ def formula(person, period, parameters):
         discretionary_income = person.tax_unit(
             "pay_as_you_earn_discretionary_income", period
         )
-        # 685.209(g)(1)(i)-(ii) prorate the income-based amount to the
-        # borrower's Direct Loans. 685.209(f)(2)(ii), as in 20 U.S.C.
-        # 1098e(b)(6)(A) for the Income-Based Repayment plan, caps the payment
-        # on all of the borrower's eligible loans at their own 10-year standard
-        # payment; the Direct Loans carry the (g)(1)(ii) part of that cap.
+        # 685.209(f)(2)(ii), as 20 U.S.C. 1098e(b)(6)(A) does for the
+        # Income-Based Repayment plan, makes the payment the lesser of the
+        # income-based amount and the borrower's own 10-year standard payment
+        # on their eligible loans. 685.209(g)(1) adjusts the payment amounts
+        # calculated under (f)(1) through (3): (g)(1)(i)(B) and (g)(1)(ii)
+        # multiply that lesser amount by the balance shares, so the proration
+        # follows the cap.
         balance_share = person(
             "income_driven_repayment_balance_share", period.this_year
         )
         balance = person("federal_student_loan_balance", period.this_year)
-        eligible_balance = balance + person(
-            "federal_ffel_loan_balance", period.this_year
-        )
-        direct_fraction = np.divide(
-            balance,
-            eligible_balance,
-            out=np.zeros_like(balance),
-            where=eligible_balance > 0,
-        )
         standard_payment = person("income_driven_repayment_standard_payment", period)
         # Payments are set in whole cents. Rounding before the small payment
         # test keeps an exact $5.00 from falling below the threshold through
@@ -73,9 +70,10 @@ def formula(person, period, parameters):
         # below $5 to $5.00, a modeling choice described in the documentation.
         prorated_payment = np.round(
             min_(
-                p.pay_as_you_earn.rate * discretionary_income * balance_share,
-                standard_payment * direct_fraction,
-            ),
+                p.pay_as_you_earn.rate * discretionary_income,
+                standard_payment,
+            )
+            * balance_share,
             2,
         )
         small_payment = p.income_driven_repayment.small_payment
diff --git a/source_conflicts/candidates.yaml b/source_conflicts/candidates.yaml
index 0aa317084eb..2ad017d3121 100644
--- a/source_conflicts/candidates.yaml
+++ b/source_conflicts/candidates.yaml
@@ -10542,6 +10542,44 @@ candidates:
     limit/self_only.yaml, limit/family.yaml). The statute-first rule requires changing conflicting projections;
     verify the statutory window substitution first, and preserve the distinction from published limits fixed through
     2027.'
+- id: us:idr-10-year-cap-before-spousal-proration
+  program: student-loans
+  years:
+    from: 2026
+    type: calendar
+  question: For a married borrower who files jointly and whose spouse has eligible loans, is the Income-Based Repayment
+    or Pay As You Earn payment capped at the borrower's 10-year standard payment before or after it is prorated by
+    the borrower's share of the couple's loans?
+  sources:
+  - kind: statute
+    citation: 20 U.S.C. 1098e(b)(6)(A)
+    url: https://www.law.cornell.edu/uscode/text/20/1098e#b_6_A
+  - kind: regulation
+    citation: 34 CFR 685.209(e)(2)(i), (f)(2), (f)(3) and (g)(1)
+    url: https://www.ecfr.gov/current/title-34/section-685.209
+  readings:
+    statute: Section 1098e(b)(6)(A) sets a maximum, the 10-year standard payment on all the borrower's loans, and says
+      nothing of proration between spouses.
+    other: 'Regulation order: (f)(2) and (f)(3) make the payment the lesser of the income-based amount and the 10-year
+      standard payment, and (g)(1) multiplies "the borrower''s payment amount as calculated in accordance with paragraphs
+      (f)(1) through (3)" by the balance share, so the share applies to the capped amount. The other reading prorates
+      the income-based amount first and caps each spouse''s share at their own standard payment.'
+  example: Spouses with $30,000 each at 0% and 12% and a $600 income-based amount have standard payments of $250.00
+    and $430.41. In the regulation's order each pays half of min($600, own standard payment), $125.00 and $215.21;
+    capping after proration gives min($300, $250) = $250 and min($300, $430.41) = $300.
+  pe_us:
+    follows: gap-fill
+    code:
+    - policyengine_us/variables/gov/ed/student_loans/income_based_repayment/income_based_repayment_payment.py
+    - policyengine_us/variables/gov/ed/student_loans/pay_as_you_earn/pay_as_you_earn_payment.py
+    prs:
+    - https://github.com/PolicyEngine/policyengine-us/pull/10570
+  state: ruled
+  note: The model follows the regulation's order for both plans. For Income-Based Repayment it stays under the
+    statute's maximum; Pay As You Earn has no statutory cap. Each borrower's standard
+    payment covers only their own Direct and FFEL loans; (e)(2)(i) brings the spouse's loans in only for (g). A couple
+    whose income-based amount exceeds both standard payments pays each standard payment times the balance share,
+    so at equal balances and rates half their combined standard amount.
 - id: us:mortgage-interest-limit-ratio-rounding
   program: income-tax
   years: