Income Contingent Repayment For Parent Plus Loans

The parent plus loan is not otherwise eligible for an income driven repayment plan.

Income contingent repayment for parent plus loans. Icr generally limits payments to 20 of your discretionary income. 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. Anonymous federal parent plus loans are not eligible for income based repayment. The income contingent repayment plan is an income driven repayment option for federal student loans.

Parent loans such as the parent plus loan are not eligible. One flaw with the government s icr formula is the treatment of married borrowers. Income contingent repayment is also preferred for parents who have plus loans and need access to a lower monthly payment. The federal government offers four types of income driven repayment plans but parent plus loans are only eligible for one.

Income contingent repayment icr is the oldest of the income driven repayment plans and it also may be the most expensive. To be eligible you must first consolidate your parent plus loans. Carefully consider your situation run the numbers and decide if icr is the right move for you. To obtain income contingent repayment icr on a parent plus loan the parent plus loan must be included in a federal direct consolidation loan and the parent plus loan must have entered repayment on or after july 1 2006.

Icr caps monthly student loan payments at 20 of the borrower s discretionary income which is the difference between your gross income and a minimum level based on the federal poverty guideline for your state and family size. Only loans that are guaranteed by the federal government may be included. Still if you have a parent plus loan income contingent repayment is. Income contingent repayment is the only income driven repayment plan parent plus loan borrowers can use.