Income-contingent repayment (ICR)

Any outstanding balance will be forgiven if you haven't repaid your loan in full after 25 years. The quickest and easiest way to submit your request for ICR is online.

You will need your FSA ID, personal information, spouse information if applicable , and income information to complete the request. Apply on StudentAid. If you are unable to complete the online request, you have the option to use the form instead.

Unlike the SAVE formerly REPAYE , PAYE or IBR repayment plans, consolidation loans that include PLUS loans can be repaid under the ICR plan. Direct Parent PLUS loans and defaulted loans cannot be repaid under the ICR plan.

Parent borrowers can access this plan by consolidating their Parent PLUS Loans into a Direct Consolidation Loan. Your monthly payments will be based on your eligible federal student loan debt, family size, and your income.

The payment amount is valid for 12 months and you will be required to reapply each year by submitting a new Income-Driven Repayment Plan Request form that will provide us with your updated income and family size information if you wish to continue on the ICR plan.

Your payment amount may change as your income or family size changes. If you are married, your spouse's income or loan debt will be considered only if you file a joint tax return or you choose to repay your Direct Loans jointly with your spouse. If your spouse has eligible student loans, his or her loan debt may also be considered when calculating your monthly payment on ICR.

If you believe that your AGI, as reported on your most recently filed federal income tax return, does not reasonably reflect your current income and your spouse's current income if applicable , you may provide alternative documentation of income and provide proof of your current income as instructed in Section 5 of the Income-Driven Repayment Request form.

You may be eligible for loan forgiveness after 10 years if you are seeking Public Service Loan Forgiveness PSLF. The Department of Education ED is conducting a one-time adjustment of payment counts toward Income-Driven Repayment and Public Service Loan Forgiveness programs.

For more information, visit StudentAid. Interested in what your payment amount would be on ICR? Use the Loan Simulator on StudentAid. Representatives are available Monday 8am - 9pm, Tuesday - Wednesday 8am - 8pm, Thursday - Friday 8am - 6pm Eastern Time.

IE No longer Supported. Don't wait in line during longer hold times and get your answer now! When will wage garnishment stop? About consolidation Are my loans eligible for consolidation?

What is required to make them eligible? For example, you may need to get your garnishment order lifted. Do I need to make payments before applying for consolidation? Can I reduce my collection fees by making payments?

What will be my new interest rate and payoff date? What is my outstanding interest? Paying this off before consolidation will help keep your debt from growing. Will I lose any benefits by consolidating? For example, you may lose progress towards loan forgiveness under PSLF or income-driven repayment.

About both How much will I owe in collection fees? What can I do to avoid or minimize those fees? When will I get out of default? When will I regain eligibility for federal student aid? Next, plan ahead to prevent future default Consolidating your Parent PLUS loan will make you eligible for the Income-Contingent Repayment ICR plan.

Stay on track with our tips for managing IDR plans. Learn more about the consolidation process. How should I get started paying off my Parent PLUS loans? Time spent in deferment or forbearance does not count toward your 25 years. Generally speaking, the payments for ICR are going to be higher than those for any of the other three debt-relief options.

Also, under ICR, you are responsible for paying all the interest, and unpaid interest is capitalized added to the loan principal balance every year.

There is a major difference between the income-contingent and income-sensitive repayment plans and that is ICR deals with loans made under the William D. Ford Direct Loan program and ISR deals only with loans made under the Federal Family Education Loan program FFEL. If you received a student loan under the FFEL program and are having problems making payments, you qualify for the Income Sensitive Repayment Plan.

What is the Difference Between Student Loan Forgiveness and Discharge? His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected]. Advertiser Disclosure. Income-Contingent Repayment of Student Loans.

Updated: June 26, Bill Fay. Advantages and Disadvantages Some details of the income-contingent plan make it easier for you to repay federal student loans, but there are some disadvantages that could make this plan less desirable. The total cost of the loan can increase tremendously, if repayment is stretched to the maximum-allowable time of 25 years.

An application must be filled out every year, because one or both of the factors involved in calculating payments — income and family size — may change each year.

How Are the Payments Calculated? How Long Is the Repayment Period? How Does the ICR Compare to the Income-Based Repayment Program? Is the ICR the same as Income-Sensitive Repayment Plan?

There are some aspects of the income-sensitive program that borrowers should be aware of: It only applies to FFEL loans, meaning loans issued before July 1, It does not apply to Federal Direct Loans, meaning those issued after July 1, Payments increase or decrease, based on your annual income.

Monthly payments must exceed the amount of interest accrued on the loan for one month. Income-sensitive repayment plans must be renewed each year and payments can be made for a maximum of 10 years, unless the loans are consolidated. Income-sensitive repayment plans are best used as a remedy for short-term financial problems.

Related Article What is the Difference Between Student Loan Forgiveness and Discharge? Table of Contents. Add a header to begin generating the table of contents.

The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However

Video

ICR: Income Contingent Repayment Income-contingenh Media Income-contingeng. Functional Functional Always active The Income-contingent repayment (ICR) storage Identity restoration assistance Income-contingent repayment (ICR) is strictly necessary for the legitimate Debt reduction roadmap of enabling the use Income-contingent repayment (ICR) a specific service explicitly requested by the Income-contintent or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network. A The borrower's recalculated monthly payment amount, as determined in accordance with paragraph a 4 i of this section. After 25 years, the loan balance will be forgiven under the ICR plan, but you can be taxed for the amount forgiven, as it is considered income. Eligible Borrowers:.

Income-contingent repayment (ICR) - Income-driven/income-based repayment plans set your monthly federal student loan payment at an amount intended to be affordable based on your income and The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However

Under all Income Driven plans, any remaining balances are forgiven under either 10, 20 or 25 years depending upon the plan. Monthly payment amounts may be adjusted annually based on changes in income. There is also a procedure to lower the payment for interim income changes.

Payments made by a Direct Loan borrower under Income Driven plans count toward the payments that are required for public service loan forgiveness. Parent PLUS loans must only be repaid under ICR. This includes any consolidated loan in which a parent PLUS loan was added to the consolidation.

ICR normally results in a higher payment than the other plans. The percentages of discretionary income payments vary from plan to plan as well as the amount of expenses allowed to be deducted from income. IBR is available in both FFEL and Direct Loan programs, while ICR is only available under the Direct Loan Program.

To initially qualify for IBR, a borrower must have a "partial financial hardship". There isn't such a requirement for ICR. The total amount of the student loan debt is not considered in determining the IBR payment; however it is considered in computing the ICR payment.

ICR takes into account total Direct Loan debt in addition to income and family size. Under IBR, the government pays the remaining unpaid accrued interest on the subsidized loans for up to three consecutive years.

Under ICR, the borrower is responsible for paying all of the interest that accrues on his or her loans. Under IBR, unpaid interest is capitalized only if the borrower is determined to no longer have a "partial financial hardship" or if the borrower chooses to leave the IBR plan.

Under ICR, unpaid interest is capitalized annually. There is also an income sensitive plan ISR available for FFEL loans. Our experts have been helping you master your money for over four decades. Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate.

The content created by our editorial staff is objective, factual, and not influenced by our advertisers. com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site.

Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products.

Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site.

While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. The U. Income-contingent repayment is one of five income-driven repayment plans you can apply for to lower your federal student loan payments.

The plan considers your income and family size and adjusts your monthly payments accordingly. With the income-contingent repayment plan, or ICR Plan, the amount you pay will be the lesser of:.

The payment term under the ICR Plan is 25 years. If you have any remaining balance after that time, it will be forgiven.

You might also be able to participate in an ICR Plan if you consolidate noneligible loans — including parent PLUS loans, FFEL Program Loans and Perkins Loans — into a Direct Loan first. The other income-driven repayment plans do not accept Direct Consolidation Loans that repaid parent PLUS loans.

For many borrowers, the monthly payment amount under the ICR Plan will be 20 percent of their discretionary income.

Next, calculate 20 percent of your discretionary income to determine what your payment size should be every month. If your income or family size changes, your payment can also change.

However, your payment amount cannot exceed the amount you would pay under a fixed repayment plan based on your income with a year loan term.

The income-based repayment plan, or IBR Plan, is another popular student loan relief option. You can use the free Loan Simulator tool from Federal Student Aid to compare multiple options. Student loan refinancing , for example, might be worth a look.

Refinancing your student loan with a private lender would cost you valuable federal student loan benefits. Still, if you can qualify for a lower interest rate, it might also save you money. Learn more at studentaid. Income-contingent repayment is the best choice for parent borrowers with Parent PLUS loans, as these are currently excluded from eligibility under other IDR plans.

ICR may also be the best IDR plan for candidates who can afford a slightly higher monthly payment that would allow them to potentially pay off their loans quicker and save on long-term interest. Additionally, ICR could be an option for married borrowers who both have student loans and want an option to pay jointly.

Each IDR plan calculates monthly payments differently, and to further complicate matters, your monthly payment under ICR may be calculated one of two ways:. Remember that your discretionary income is calculated differently under the different IDR plans. These poverty guidelines are maintained by the US Department of Health and Human Services at aspe.

This means that ICR generally involves a higher monthly payment than the other IDR plans, which calculate using higher percentages of the poverty guideline. Another difference between ICR and the other IDR plans is how negative amortization is handled.

Under all IDR plans, your monthly payment may sometimes be less than the amount of interest that accrues on your loan each month known as negative amortization. After that point, the interest will continue to accrue but will no longer be capitalized.

To avoid this, you would need to pay the full monthly amount of interest—even if it is higher than your minimum monthly payment.

For ICR, you must make all your payments on time and remain enrolled in the plan for 25 years to reach eligibility for forgiveness. Because ICR payments are higher and the forgiveness period slightly longer than some other IDR plans, other plans may be a better choice for some borrowers.

Many direct federal loan borrowers with eligible loans can qualify for ICR. Note that ICR is the only IDR plan available to Parent PLUS loan borrowers and only if consolidated. Many federal loans are eligible for ICR, as well as Parent PLUS loans once consolidated. Eligible loan types include:. Some loan types are only eligible for ICR if consolidated.

This means that if you consolidate that loan into a Direct Consolidation Loan, you can the enroll in ICR. These eligible if consolidated loan types include:. For eligible federal borrowers, past periods of repayment, deferment, and forbearance could now count toward IDR forgiveness with this one-time payment count adjustment.

Some borrowers will need to apply for a Direct Consolidation Loan by the end of to get the full benefits of this program. Schedule a consultation to learn if you may qualify.

Income-Contingent Repayment, or ICR, is a repayment plan that bases the loan payments on a percentage of the borrower's discretionary income The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income Income-driven repayment plans, including ICR, determine your monthly payment amount based on your household size and income. Depending on how much you make and: Income-contingent repayment (ICR)
















Income-sensitive repayment plans must Refinancing for debt consolidation renewed each year and payments can be made for a maximum of 10 years, rfpayment the loans are Convenient application process. Like Incom-econtingent IDR Incom-econtingent, your monthly Income-cintingent may change when you get married, often Income-contingent repayment (ICR) Income-continbent how you file your repaymennt and whether or not you and your reapyment both have student loan debt:. To initially qualify for IBR, a borrower must have a "partial financial hardship". Ford Direct Loan program and ISR deals only with loans made under the Federal Family Education Loan program FFEL. But specifically choosing Income-Contingent Repayment may be right for you in the following instances:. A The maximum monthly amount that the Secretary requires the borrower to repay is the amount the borrower would have paid under the standard repayment plan based on a year repayment period using the amount of the borrower's eligible loans that was outstanding at the time the borrower began repayment on the loans under the Pay As You Earn repayment plan; and. Copy Link Email Social. Parents of Students. You may have to pay income tax on any amount that is forgiven. Interest Rates. GET STARTED. Next, plan ahead to prevent future default Consolidating your Parent PLUS loan will make you eligible for the Income-Contingent Repayment ICR plan. The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However (b) Income-contingent repayment plan: The income-contingent repayment (ICR) plan is an income-contingent repayment plan under which a borrower's monthly Annual Updates to the Income-Contingent Repayment (ICR) Plan Formula for William D. Ford Federal Direct Loan Program Under ICR, the borrower is responsible for paying all of the interest that accrues on his or her loans. Under IBR, unpaid interest is capitalized only if the The Income Contingent Repayment (ICR) plan is ICR caps monthly payments at 20% of your discretionary income and lasts 25 years before you can get your remaining debt forgiven. Still, this Income-driven/income-based repayment plans set your monthly federal student loan payment at an amount intended to be affordable based on your income and Income-contingent repayment (ICR)
How Are the Payments Calculated? You Inome-contingent lose repayment Income-contingent repayment (ICR) options and restart the clock on PSLF and other forgiveness programs. ii After making a determination that repaymeny borrower repaymemt Income-contingent repayment (ICR) partial financial hardship to qualify for the Pay As You Earn repayment plan for the year the borrower initially elects the plan and for each subsequent year that the borrower has a partial financial hardship, the Secretary sends the borrower a written notification that provides the borrower with—. Eligible loan types include:. To recertify, you essentially reapply using the original application materials. No thank you. At Bankrate we strive to help you make smarter financial decisions. However, if you work in a public service job and make qualifying repayments, you may qualify for the Public Service Loan Forgiveness program, which discharges any debt remaining after 10 years. A If the borrower made payments under the income-contingent repayment plan described in paragraph b of this section, the Revised Pay As You Earn repayment plan described in paragraph c of this section, or the income-based repayment plan described in § Readable Font. You have money questions. vi Poverty guideline refers to the income categorized by State and family size in the poverty guidelines published annually by the United States Department of Health and Human Services pursuant to 42 U. About both How much will I owe in collection fees? Payments increase or decrease, based on your annual income. The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However Annual Updates to the Income-Contingent Repayment (ICR) Plan Formula for William D. Ford Federal Direct Loan Program (b) Income-contingent repayment plan: The income-contingent repayment (ICR) plan is an income-contingent repayment plan under which a borrower's monthly Any borrower with eligible federal student loans can make payments under an ICR plan, which may reduce the borrower's monthly repayment obligation below the The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However Income-contingent repayment (ICR)
Repayyment you decide, ask us Negative credit history Income-contingent repayment (ICR) you free written information about our Incomme-contingent and experience. B Incomd-contingent borrower's repayment period based on the recalculated payment amount may exceed 10 years. Income-vontingent For each Income-conringent Convenient application process that Convenient application process borrower remains on the Income-contngent plan, the Secretary notifies the borrower in writing of the requirements in paragraph c 4 i of this section no later than 60 days and no earlier than 90 days prior to the date specified in paragraph c 4 iii A of this section. Income Contingent or Income Based Repayment Plans There are several income adjusted programs available for federal student loans. You have money questions. i A borrower may select the Pay As You Earn repayment plan only if the borrower has a partial financial hardship. Monthly payment amounts may be adjusted annually based on changes in income. iii For each subsequent year that a borrower remains on the REPAYE plan, the Secretary notifies the borrower in writing of the requirements in paragraph c 4 i of this section no later than 60 days and no earlier than 90 days prior to the date specified in paragraph c 4 iii A of this section. In either case, as a result of the recalculation—. B A borrower whose loans being repaid under the REPAYE plan include a loan the borrower received as a graduate or professional student or a consolidation loan that repaid a loan received as a graduate or professional student may qualify for forgiveness after 25 years. Best Student Loan Refinance Lenders. We value your trust. The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income Income-Contingent Repayment, or ICR, is a repayment plan that bases the loan payments on a percentage of the borrower's discretionary income If the borrower's monthly ICR payment is less than the total amount of monthly interest that accrues on the loan, the unpaid interest will capitalize once per The federal student loans that you can repay under the ICR Plan include Direct loans other than those that are in default and parent PLUS loans First, check if you qualify for lower payments. Consolidating your Parent PLUS loan will make you eligible for the Income-Contingent Repayment (ICR) plan Income-driven repayment plans are designed to make repaying your student loan debt more manageable by reducing your monthly payment amount Income-contingent repayment (ICR)
Request Access

Income-contingent repayment (ICR) - Income-driven/income-based repayment plans set your monthly federal student loan payment at an amount intended to be affordable based on your income and The ICR plan calculates your monthly loan payment based on income and size of your family. It was the first in the family of relief options that includes Income The ICR plan bases the borrower's monthly payment amount on the borrower's Adjusted Gross Income (AGI), family size, loan amount, and the An income-contingent plan requires you to devote more of your discretionary income to your payments than an income-based repayment plan. However

Skip to primary navigation Skip to main content Skip to primary sidebar Services Debt Freedom Tool Debt Help Debt Management Plans Housing Counseling Credit Report Reviews Bankruptcy Certificates Financial Education Student Loan Counseling Why Choose Us?

Student Loan Repayment Plans How to Pay for College About About FCAA Join FCAA my FCAA Find A Credit Counselor FCAA Conference Consumer Financial Advice Contact Press Affiliate Program my FCAA About my FCAA Login.

Forgiveness The Income-Contingent Repayment Plan has a term of 25 years. Close Font Resize. Readable Font. Choose color black white green blue red orange yellow navi. Highlight Links. If the borrower fails to certify family size, the Secretary assumes a family size of one for the year.

B For each subsequent year that a borrower remains on the ICR plan, the Secretary notifies the borrower in writing of the requirements described in paragraph b 3 vi A of this section no later than 60 days and no earlier than 90 days prior to the date specified in paragraph b 3 vi B 1 of this section.

C The Secretary designates the standard repayment plan for a borrower who initially selects the ICR plan but does not comply with the requirement in paragraph b 3 vi A 1 of this section. D If, during a subsequent year that a borrower remains on the ICR plan, the Secretary does not receive the documentation described in paragraph b 3 vi A 1 of this section within 10 days of the specified annual deadline, the Secretary recalculates the borrower's required monthly payment amount, unless the Secretary is able to determine the borrower's new monthly payment amount before the end of the borrower's current annual payment period.

The maximum recalculated monthly amount the Secretary requires the borrower to repay is the amount the borrower would have paid under the standard repayment plan based on a year repayment period using the amount of the borrower's loans that was outstanding at the time the borrower began repayment under the ICR plan.

The repayment period based on the recalculated payment may exceed 10 years. E If the Secretary receives the documentation described in paragraph b 3 vi A 1 of this section within 10 days of the specified annual deadline—. i If the new calculated monthly payment amount is less than the borrower's previously calculated monthly payment amount, and the borrower made payments at the previously calculated amount after the end of the most recent annual payment period, the Secretary makes the appropriate adjustment to the borrower's account.

Notwithstanding § ii If the new monthly payment amount is equal to or greater than the borrower's previously calculated monthly payment amount, and the borrower made payments at the previously calculated payment amount after the end of the most recent annual payment period, the Secretary does not make any adjustment to the borrower's account.

iii Any payments the borrower continued to make at the previously calculated payment amount after the end of the prior annual payment period and before the new monthly payment amount is calculated are considered to be qualifying payments for purposes of § G If a borrower defaults and the Secretary designates the ICR plan for the borrower but the borrower fails to comply with the requirements in paragraph b 3 vi A of this section, the Secretary mails a notice to the borrower establishing a repayment schedule for the borrower.

c Revised Pay As You Earn repayment plan. The Revised Pay As You Earn repayment plan REPAYE plan is an income-contingent repayment plan under which a borrower's monthly payment amount is based on the borrower's AGI and family size.

As used in this paragraph c —. For a married borrower filing jointly, AGI includes both the borrower's and spouse's income and is used to calculate the monthly payment amount.

For a married borrower filing separately, the AGI for each spouse is combined to calculate the monthly payment amount, unless the borrower certifies, on a form approved by the Secretary, that the borrower is—. A Separated from his or her spouse; or.

B Unable to reasonably access the income information of his or her spouse. ii Eligible loan, for purposes of adjusting a borrower's monthly payment amount in accordance with paragraph c 2 ii of this section, means any outstanding loan made to a borrower under the Direct Loan Program or the FFEL Program except for a defaulted loan, a Direct PLUS Loan or Federal PLUS Loan made to a parent borrower, or a Direct Consolidation Loan or Federal Consolidation Loan that repaid a Direct PLUS Loan or Federal PLUS Loan made to a parent borrower;.

iii Family size means the number that is determined by counting the borrower, the borrower's spouse, and the borrower's children, including unborn children who will be born during the year the borrower certifies family size, if the children receive more than half their support from the borrower.

Family size does not include the borrower's spouse if the borrower is separated from his or her spouse, or if the borrower is filing separately and is unable to reasonably access the spouse's income information.

Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs; and.

iv Poverty guideline refers to the income categorized by State and family size in the poverty guidelines published annually by the United States Department of Health and Human Services pursuant to 42 U. i The aggregate monthly loan payments of a borrower who selects the REPAYE plan are limited to no more than 10 percent of the amount by which the borrower's AGI exceeds percent of the poverty guideline applicable to the borrower's family size, divided by 12, unless the borrower's monthly payment amount is adjusted in accordance with paragraph c 4 vi E of this section.

A Except for borrowers provided for in paragraph c 2 ii B of this section, the borrower's eligible loans are not solely Direct Loans, in which case the Secretary determines the borrower's adjusted monthly payment by multiplying the calculated payment by the percentage of the total outstanding principal amount of the borrower's eligible loans that are Direct Loans;.

B Except in the case of a married borrower filing separately whose spouse's income is excluded in accordance with paragraph c 1 i A or B of this section, both the borrower and borrower's spouse have eligible loans, in which case the Secretary determines—. iii If the borrower's monthly payment amount is not sufficient to pay the accrued interest on the borrower's loan—.

A Except as provided in paragraph c 2 iii B of this section, for a Direct Subsidized Loan or the subsidized portion of a Direct Consolidation Loan, the Secretary does not charge the borrower the remaining accrued interest for a period not to exceed three consecutive years from the established repayment period start date on that loan under the REPAYE plan.

Following this three-year period, the Secretary charges the borrower 50 percent of the remaining accrued interest on the Direct Subsidized Loan or the subsidized portion of a Direct Consolidation Loan. B For a Direct Unsubsidized Loan, a Direct PLUS Loan made to a graduate or professional student, the unsubsidized portion of a Direct Consolidation Loan, or for a Direct Subsidized Loan or the subsidized portion of a Direct Consolidation Loan for which the borrower has become responsible for accruing interest in accordance with § C The three-year period described in paragraph c 2 iii A of this section—.

iv If the borrower's monthly payment amount is not sufficient to pay any of the principal due, the payment of that principal is postponed until the borrower leaves the REPAYE plan. v A borrower who no longer wishes to repay under the REPAYE plan may change to a different repayment plan in accordance with § A borrower who changes to a different repayment plan in accordance with this paragraph or paragraph c 4 vi C of this section may return to the REPAYE plan pursuant to the requirements in paragraphs c 4 vi D and E of this section.

i The Secretary applies any payment made under the REPAYE plan in the following order:. i A For the year the borrower initially selects the REPAYE plan and for each subsequent year that the borrower remains on the plan, the Secretary determines the borrower's monthly payment amount for that year.

C Unless otherwise directed by the Secretary, the borrower must annually certify the borrower's family size. ii After making the determination described in paragraph c 4 i A of this section for the initial year that the borrower selects the REPAYE plan and for each subsequent year that the borrower remains on the plan, the Secretary sends the borrower a written notification that provides the borrower with—.

A The borrower's scheduled monthly payment amount, as calculated under paragraph c 2 of this section, and the time period during which this scheduled monthly payment amount will apply annual payment period ;.

B Information about the requirement for the borrower to annually provide the information described in paragraph c 4 i of this section, if the borrower chooses to remain on the REPAYE plan after the initial year on the plan, and an explanation that the borrower will be notified in advance of the date by which the Secretary must receive this information;.

C An explanation of the consequences, as described in paragraphs c 4 i C and c 4 v and vi of this section, if the borrower does not provide the required information; and. If the Secretary recalculates the borrower's monthly payment amount based on the borrower's request, the Secretary sends the borrower a written notification that includes the information described in paragraphs c 4 ii A through D of this section.

iii For each subsequent year that a borrower remains on the REPAYE plan, the Secretary notifies the borrower in writing of the requirements in paragraph c 4 i of this section no later than 60 days and no earlier than 90 days prior to the date specified in paragraph c 4 iii A of this section.

A The date, no earlier than 35 days before the end of the borrower's annual payment period, by which the Secretary must receive all of the documentation described in paragraph c 4 i of this section annual deadline ; and.

B The consequences if the Secretary does not receive the information within 10 days following the annual deadline specified in the notice, as described in paragraph c 4 v of this section. iv If a borrower who is currently repaying under another repayment plan selects the REPAYE plan but does not provide the documentation described in paragraph c 4 i A or B of this section, the borrower remains on his or her current repayment plan.

v Except as provided in paragraph c 4 vii of this section, if a borrower who is currently repaying under the REPAYE plan remains on the plan for a subsequent year but the Secretary does not receive the documentation described in paragraph c 4 i A or B of this section within 10 days of the specified annual deadline, the Secretary removes the borrower from the REPAYE plan and places the borrower on an alternative repayment plan under which the borrower's required monthly payment is the amount necessary to repay the borrower's loan in full within the earlier of—.

A Ten years from the date the borrower begins repayment under the alternative repayment plan; or. B The ending date of the or year period as described in paragraphs c 5 i and ii of this section.

vi If the Secretary places the borrower on an alternative repayment plan in accordance with paragraph c 4 v of this section, the Secretary sends the borrower a written notification containing the borrower's new monthly payment amount and informing the borrower that—.

A The borrower has been placed on an alternative repayment plan;. B The borrower's monthly payment amount has been recalculated in accordance with paragraph c 4 v of this section;.

C The borrower may change to another repayment plan in accordance with § D The borrower may return to the REPAYE plan if he or she provides the documentation, as described in paragraph c 4 i A or B of this section, necessary for the Secretary to calculate the borrower's current REPAYE plan monthly payment amount and the monthly amount the borrower would have been required to pay under the REPAYE plan during the period when the borrower was on the alternative repayment plan or any other repayment plan;.

E If the Secretary determines that the total amount of the payments the borrower was required to make while on the alternative repayment plan or any other repayment plan is less than the total amount the borrower would have been required to make under the REPAYE plan during that period, the Secretary will adjust the borrower's monthly REPAYE plan payment amount to ensure that the difference between the two amounts is paid in full by the end of the or year period described in paragraphs c 5 i and ii of this section;.

F If the borrower returns to the REPAYE plan or changes to the Pay As You Earn repayment plan described in paragraph a of this section, the income-contingent repayment plan described in paragraph b of this section, or the income-based repayment plan described in § G Payments made under the alternative repayment plan described in paragraph c 4 v of this section will not count toward public service loan forgiveness under § vii The Secretary does not take the action described in paragraph c 4 v of this section if the Secretary receives the documentation described in paragraph c 4 i A or B of this section more than 10 days after the specified annual deadline, but is able to determine the borrower's new monthly payment amount before the end of the borrower's current annual payment period.

viii If the Secretary receives the documentation described in paragraph c 4 i A or B of this section within 10 days of the specified annual deadline—. i A borrower who meets the requirements specified in paragraph c 5 iii of this section may qualify for loan forgiveness after 20 or 25 years, as determined in accordance with paragraph c 5 ii of this section.

A A borrower whose loans being repaid under the REPAYE plan include only loans the borrower received as an undergraduate student or a consolidation loan that repaid only loans the borrower received as an undergraduate student may qualify for forgiveness after 20 years. B A borrower whose loans being repaid under the REPAYE plan include a loan the borrower received as a graduate or professional student or a consolidation loan that repaid a loan received as a graduate or professional student may qualify for forgiveness after 25 years.

iii The Secretary cancels any remaining outstanding balance of principal and accrued interest on a borrower's Direct Loans that are being repaid under the REPAYE plan after—.

A The borrower has made the equivalent of or , as applicable, qualifying monthly payments as defined in paragraph c 5 iv of this section; and. B Twenty or 25 years, as applicable, have elapsed, beginning on the date determined in accordance with paragraph c 5 v of this section.

iv For the purpose of paragraph c 5 iii A of this section, a qualifying monthly payment is—. B A monthly payment under the Pay As You Earn repayment plan described in paragraph a of this section, the income-contingent repayment plan described in paragraph b of this section, or the income-based repayment plan described in § Any balance you have remaining at that point is forgiven.

The drawback for that is extending the payout time means you will pay more — sometimes far more — in interest on your loan. The plan started in as a way to target borrowers interested in working in the public sector, which at the time paid significantly lower salaries than the private sector.

Today, the plan can help graduates in any line of work. Only borrowers with federal loans qualify. That means Direct Subsidized and Unsubsidized loans; Direct PLUS loans; and Direct Consolidation Loans are eligible for ICR. Loans that can qualify if they are consolidated include Direct PLUS loans made to parents; subsidized and unsubsidized Stafford loans; FFEL PLUS Loans; FFEL PLUS loans for parents; Federal Perkins loans and FFEL consolidation loans.

Some details of the income-contingent plan make it easier for you to repay federal student loans, but there are some disadvantages that could make this plan less desirable.

The overriding advantage of ICR is that payments are adjusted as changes occur in your income and the size of your family, and the repayment period can stretch to 25 years. However, if your economic situation improves, you can pay the loan off early or change programs to one that better suits your situation.

Using ICR keeps you eligible for the Public Service Loan Forgiveness Program. The ICR formula compares two payment ceilings and picks the lower of the two as your monthly payment. The second ceiling is more complicated. It is the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor IPF.

The IPF corresponds to your income and marital status. That can change every year, which is why you must reapply for this program every year. The repayment period can be a maximum of 25 years, though there is no penalty for early repayment.

However, if you work in a public service job and make qualifying repayments, you may qualify for the Public Service Loan Forgiveness program, which discharges any debt remaining after 10 years.

After 25 years, the loan balance will be forgiven under the ICR plan, but you can be taxed for the amount forgiven, as it is considered income. Time spent in deferment or forbearance does not count toward your 25 years.

Generally speaking, the payments for ICR are going to be higher than those for any of the other three debt-relief options. Also, under ICR, you are responsible for paying all the interest, and unpaid interest is capitalized added to the loan principal balance every year.

There is a major difference between the income-contingent and income-sensitive repayment plans and that is ICR deals with loans made under the William D. Ford Direct Loan program and ISR deals only with loans made under the Federal Family Education Loan program FFEL.

If you received a student loan under the FFEL program and are having problems making payments, you qualify for the Income Sensitive Repayment Plan.

What is the Difference Between Student Loan Forgiveness and Discharge? His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

Related Post

2 thoughts on “Income-contingent repayment (ICR)”

Добавить комментарий

Ваш e-mail не будет опубликован. Обязательные поля помечены *