Income-Driven Repayment Options

Income-Driven Repayment Options

Income-Driven Repayment (IDR) plans are designed to help you manage your student loan debt by reducing the amount of your monthly payment, which is based primarily upon your income, family size and state of residency.  These plans also qualify for Public Service Loan Forgiveness (PSLF) and most federal loans are eligible for at least one Income-Driven Repayment plan.

IDR plans include:

To apply for an Income-Driven Repayment plan, visit StudentLoans.gov or request an application from your servicer.

To maintain your eligibility for all IDR plans, you will need to re-certify your application annually or your payment will default to the Standard Repayment plan.

Remember that any amount forgiven is subject to taxation during the year of forgiveness.

 

Income-Contingent Repayment (ICR)

Eligible Loans

Loans made under the Federal Direct Loan Program are eligible for ICR (including consolidation loans that repaid Parent PLUS loans)

 

Eligible Borrowers

Any borrower with eligible student loans qualifies for ICR.

 

Monthly Payment Amount

Your monthly payment amount is determined by your income and total debt.

Monthly payments are determined annually and equal the lesser of 20% of your discretionary income or a 12-year fixed payment (adjusted for income). After 25 years of repayment, any remaining loan balance is forgiven. 

 

Repayment Timeframe

25 years

 

Important Notes

Verification of income and family size is requred annually.

There is no cap on the maximum payment amount and no interest subsidy.

 

 

Income-Based Repayment (IBR)

Eligible Loans

Loans made under the Federal Direct Loan and Federal Family Education Loan Programs are eligible for the IBR plan.

 

Eligible Borrowers

Any borrower with eligible student loans and who demonstrates a partial financial hardship qualifies for IBR. Partial financial hardship exists when the annual amount due under Standard Repayment exceeds 15% of your discretionary income, which is the difference between your adjusted gross income and 150% of the poverty guideline for your household size and state of residency.

 

Monthly Payment Amount

Your monthly payment amount is determined by your income, family size and state of residency.

Monthly payments are determined annually and equal 15% of discretionary income but never more than the 10-year Standard Repayment amount. After 25 years of repayment, any remaining loan balance is forgiven. 

 

Repayment Timeframe

25 years

 

Important Notes

Verification of income and family size is requred annually.

Any unpaid interest is capitalized (subsidy available for the first three years on subsidized loans only—as long as you remain eligible and stay on this plan.

 

 

New Income-Based Repayment (IBR)

Eligible Loans

Loans made under the Federal Direct Loan Programs are eligible for the New IBR plan.

 

Eligible Borrowers

Any new borrower on or after July 1, 2014 with eligible student loans and who demonstrates a partial financial hardship qualifies for New IBR. Partial financial hardship exists when the annual amount due under Standard Repayment exceeds 10% of your discretionary income, which is the difference between your adjusted gross income and 150% of the poverty guideline for your household size and state of residency.

 

Monthly Payment Amount

Your monthly payment amount is determined by your income, family size and state of residency.

Monthly payments are determined annually and equal 10% of discretionary income but never more than the 10-year Standard Repayment amount. After 20 years of repayment, any remaining loan balance is forgiven. 

 

Repayment Timeframe

20 years

 

Important Notes

Verification of income and family size is requred annually.

Any unpaid interest is capitalized (subsidy available for the first three years on subsidized loans only—as long as you remain eligible and stay on this plan.

 

 

Pay As You Earn (PAYE)

Eligible Loans

Loans made under the Federal Direct Loan Programs are eligible for the PAYE plan.

 

Eligible Borrowers

Any new borrower on or after October 1, 2007with eligible student loans who received a Direct loan disbursement on or after October 1, 2011 and who also demonstrates a partial financial hardship qualifies for PAYE. Partial financial hardship exists when the annual amount due under Standard Repayment exceeds 10% of your discretionary income, which is the difference between your adjusted gross income and 150% of the poverty guideline for your household size and state of residency.

 

Monthly Payment Amount

Your monthly payment amount is determined by your income, family size and state of residency.

Monthly payments are determined annually and equal 10% of discretionary income but never more than the 10-year Standard Repayment amount. After 20 years of repayment, any remaining loan balance is forgiven. 

Repayment Timeframe

20 Years
 

Important Notes

Verification of income and family size is requred annually.

Any unpaid interest is capitalized (subsidy my be available for the first three years on subsidized loans only—as long as you remain eligible and stay on this plan). 

The cap on umpaid interest that can be capitalized is limited to 10% od your original loan balance when you enetered PAYE.

 

Revised Pay As You Earn (REPAYE)

Eligible Loans

Loans made under the Federal Direct Loan Programs are eligible for the REPAYE plan.
Eligible Borrowers Any borrower with eligible student loans qualifies for REPAYE.

 

Monthly Payment Amount

 

Your monthly payment amount is determined by your income, family size and state of residency.

Monthly payments are determined annually and equal 10% of discretionary income and there is no cap.  After 20 years of repayment (undergrad) or 25 years (grad), any remaining loan balance is forgiven. 

Repayment Timeframe 20 (undergrad) or 25 years (grad)
 

 

Important Notes

 

Verification of income and family size is requred annually.

If you are married, both your and your spouse's income and loan debt will be considered

Any unpaid interest is capitalized (full subsidy available for the first three years on subsidized loans, plus 50% of the intrest on subsidized loans after the first three years, plus 50% of the interst subsidy on unsubsidized loans during any year—as  long as you remain eligible and stay on this plan).  

   

 

Share