Income-Driven Repayment (IDR) Plans can be an attractive option for federal student loan borrowers, as these plans can make monthly payments more manageable, and offer forgiveness after a term of years. Eligibility depends upon a variety of factors, and is determined on a case-by-case basis.
What is an Income-Driven Repayment (IDR) Plan?
An IDR plan bases your monthly student loan payment amount on your discretionary income and family size. Each year, those on an IDR plan must update their income and family size. By the end of the repayment period in an IDR plan, any remaining balance that has not been paid off is forgiven.
There are four IDR plan types:
- Saving on a Valuable Education (SAVE) Plan (formerly the REPAYE Plan).
- Pay As You Earn (PAYE) Repayment Plan.
- Income-Based Repayment (IBR) Plan.
- Income-Contingent Repayment (ICR) Plan.
To helps guide you through the IDR options, you have to take the following into account:
- The loan type and potential timing issues.
- Financial hardship requirements.
- Monthly payment amounts.
- Loan repayment terms.
To repay your federal student loans under an IDR plan, you need to fill out an application.
There are a lot of moving parts, so we created a flowchart that you can use to confirm your eligibility.
If you have questions about your student loans, you’re welcome to schedule a complimentary consultation with our team of financial advisors using the link below.
