Income Driven Repayment Plan Vs Income Based

But the ibr plan makes more sense if you re looking for forgiveness.

Income driven repayment plan vs income based. In fact in some cases repayment under icr may be higher than the monthly payment amount under a 10 year standard repayment plan. The differences between income share agreements and income driven repayment plans. Welcome to another reader question. Your payment amount under an income driven repayment plan is generally a percentage of your discretionary income.

There is a qualification process you can t just decide to take time off from student loan payments but if you qualify you don t pay. Both adjust your monthly payments based on your income and both plans have annual requirements to recertify your income and family size. The borrower pays either 10 or 15 of discretionary income towards loans under an income based plan. As you re choosing between income driven repayment plans you may find yourself torn between pay as you earn paye versus income based repayment ibr.

As the name suggests idr plans adjust your student loan payments based on your income making them easier on your budget. Here is john s story and the question. Income based repayment plan ibr for the ibr plan you must have a high debt relative to your income. The isr plan might be a better choice if you have ffel loans and a low paying job but expect your income to increase like a medical resident.

Income contingent loan repayment. Income based repayment plans also called income driven repayment plans are recommended for federal loan borrowers whose monthly loans add up to more than 10 of their discretionary income. In forbearance the borrower makes no payments during the forbearance period. Keep reading to discover how isa differs from ibr.

Income share agreements and income driven repayment plans look similar but they can be very different. For this article we ll use income based repayment and income driven repayment idr interchangeably. Income based repayment and income contingent repayment are two income driven plans for federal student loans. This question comes from john who is trying to get a mortgage while being on an income based repayment ibr plan for his student loan debt.

The income sensitive repayment isr plan and income based repayment ibr plan are your two main options for unconsolidated ffel loans.