Income-Based Repayment (IBR)-Depending on when you first took out loans (before or on or after July 1, 2014), payments are generally 10% or 15% of the borrower’s discretionary income, but never more than the 10-year Standard repayment plan amount.The remaining unpaid balance of loans is forgiven after 25 years Income-Contingent Repayment (ICR)-Payments are 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income.(Starting in 2024, the terms are expected to change to 5% of your discretionary income for payments on undergraduate loans, and unpaid balances will be forgiven after 10 years for borrowers with original principal balances of $12,000 or less.) The remaining unpaid balance of loans is forgiven after 20 or 25 years. Saving on a Valuable Education (SAVE)-Formerly known as Revised Pay As You Earn, this newly updated plan requires payments that are generally 10% of your discretionary income.Their differences include the percentage of income used to calculate monthly payments amounts and years required for repayment: The Department of Education currently offers four Income-Driven Repayment plans. The Department of Education and the loan servicers it contracts with are responsible for identifying borrowers on these plans who have made enough qualifying payments to receive forgiveness. Monthly payments can be as low as $0 for some borrowers and still count toward forgiveness.īorrowers enrolled in IDR plans do not have to apply for forgiveness. And also unlike other repayment plans that require the loan to be repaid in full over time, IDR plans offer forgiveness of the loans balance at the end of the repayment period. Unlike Standard repayment, which typically requires repayment over 10 years, the repayment periods for IDR plans can be up to 20 or 25 years. Monthly payments for Income-Driven Repayment (IDR) plans are based on a borrower’s income and family size. How do Income-Driven Repayment plans work?
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