Income Driven Repayment Plan Parent Plus Loan

Although they can work with other types of federal student loans pay as you earn paye and income based repayment ibr can t help you with parent plus loans unless you consolidate first.

Income driven repayment plan parent plus loan. While the repayment plans available to borrowers with parent plus loans are more limited compared to borrowers with other loan types there are still a number of helpful repayment and forgiveness options for parent plus borrowers. One of the major advantages of having federal student loans is the income driven repayment idr plans. The significance of an idr plan is that it allows borrowers to make payments based upon what they can afford rather than what they owe. Income driven repayment plans for parent plus borrowers.

Still if you have a parent plus loan income contingent repayment is. Many parents take out federal parent plus loans to help pay for their children s higher education. Income driven repayment idr plans are designed to make your student loan debt more manageable by reducing your monthly payment amount. The parent plus loan is not otherwise eligible for an income driven repayment plan.

What you can t do for parent plus loan repayment. 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. Even if federal parent plus loans were eligible for income contingent or income based repayment the regulations at 34 cfr 685 219 c 1 iv a and b specifically exclude allowing federal parent plus loans that were repaid under these repayment plans to qualify for public service loan forgiveness. Income contingent repayment bases the monthly payment on your income not the amount you owe.

The monthly payment is set at 20 of your discretionary income which is defined as the amount by which your income exceeds 100 of the poverty line. The federal government offers four types of income driven repayment plans but parent plus loans are only eligible for one. Parent plus loans do not qualify for income based repayment. If you need to make lower monthly payments or if your outstanding federal student loan debt represents a significant portion of your annual income one of the following income driven plans may be right for you.

Income contingent repayment icr is the oldest of the income driven repayment plans and it also may be the most expensive.