How To Calculate Income Contingent Repayment Plan

If your monthly student loan payment is less than 20 of your discretionary income then your monthly student loan payment.

How to calculate income contingent repayment plan. Federal student loan borrowers pay a percentage of their discretionary income 10 15 or 20 depending on the specific income driven repayment plan you choose. With icr your monthly student loan payments are limited to 20 of your discretionary income. Under repaye for example which is an income driven student loan repayment plan your graduate student loans can be forgiven after 25 years. The federal income contingent repayment icr plan might come with the highest monthly cost out of all of the income driven repayment idr options available.

However your payments may instead be capped by the amount of a fixed payment on your loans over a 12 year term if this monthly payment amount is less than 20 of discretionary income. The income contingent repayment icr plan can help lower your monthly payments and give you a way to earn student loan forgiveness if you re eligible for this income driven repayment plan. Income driven repayment plans base student loan payments on a percentage of the borrower s discretionary income as opposed to the amount owed. Discretionary income is what you have left after taxes and an allowance for necessary spending such as food and shelter.

As one of the oldest student loan repayment programs available the income contingent repayment icr plan uses your income to determine how much you can. An income contingent repayment calculator is a tool that helps student loan borrowers plan their finances. Income contingent repayment icr was the first income driven repayment plan. The income contingent repayment icr plan is one of four income driven student loan repayment plans for federal student loans.

The income contingent repayment plan is an income driven repayment option for federal student loans. But those high monthly repayments might actually help cut down on the total cost of your loans. Developing a solid repayment strategy is key to eliminating your debt. With the introduction of newer income driven repayment plans icr has dropped in popularity.

Icr generally limits payments to 20 of your discretionary income. How your income contingent repayment icr monthly payment is calculated. By student loan borrowers we re referring to borrowers who may potentially enroll in an income contingent repayment icr plan. Still if you have a parent plus loan income contingent repayment is the only idr plan available to you.

Income contingent repayment icr this repayment plan is the only one that is available for all federal student loans including ones made to parents.