Income Contingent Repayment

student-researching-income-contingent-planThe Income Contingent Repayment Plan is an income driven repayment plan. The monthly payment is determined using a borrower’s adjusted gross income, state of residence and family size. Unlike some other income driven repayment plans, the Income Contingent repayment plan does not require a financial hardship to qualify. This repayment plan requires annual re-certification.

Only borrowers with Federal Direct Loans are eligible for this program. Your monthly payment is capped at 20% of your discretionary income or the amount of your fixed monthly payments on a 12 year loan term, whichever is lower.  The repayment term on this program is extended from the standard 10 year to 25 years. Borrowers are eligible for loan forgiveness under this qualifying repayment plan. The Income Contingent Repayment Plan is the only repayment plan available to Parent-Plus Borrowers.

Under this repayment plan, your loan may capitalize. If the monthly payment does not cover the accrued interest, that interest will be added to your loan balance. It is important that borrowers understand this and keep an eye on their balances. Our counselor will be able to explain this in greater detail should you have additional questions about how much the loan may ultimately cost and how paying below the minimum may extend the time it takes to repay the debt.

We want to assure you that our primary objective is to help you understand the options available to you in repaying your student loan debt. Our organization, which is a nonprofit Consumer Credit Counseling Organization has over twenty years of experience helping individuals live debt free and understand their complete financial picture. The consultation is free and the help and guidance we’ve provided individuals throughout the years has been invaluable. We encourage you to learn more about our organization by visiting Debt Reduction Services or calling us toll free at 1-877-688-3328. Our certified student loan counselors are ready to help you today!