The Income Sensitive Repayment is an income driven repayment plan. It is available to lower income borrowers who have FFEL (Federal Family Education Loans). If a borrower cannot afford their monthly payment, this plan will bring your payment down and prevent you from going into default. Under this repayment plan, borrowers are not eligible for loan forgiveness.
On the Income Sensitive Repayment plan the monthly minimum payment is calculated as a percentage of the borrower’s income. So, if you are in a sudden tight spot, where you have a loss of income or there was some sort of emergency, this could be a great plan to use to keep the payment affordable. Keeping in mind that the eligible loans that would qualify for this program are Subsidized Federal Stafford Loans, Unsubsidized Federal Stafford Loans, FFEL plus Loans and FFEL Consolidation Loans. On this repayment program the maximum time frame a borrower would be paying back their loan would be ten years.
A borrower applying for this repayment plan must provide proof of their gross income in the form of tax returns, bank statements or pay stubs. There are regulations that require that the borrower pay at least the monthly interest accruing. If the minimum payment is lower than that, then the borrower will be placed on a reduced payment forbearance, or counseled towards an Income Based Repayment Plan.
This repayment plan does not extend the term of the loan like other repayment programs. It can be the most affordable if your budget is tight and you do not see it increasing in the near future. This plan does allow you to pay more than the minimum required without penalty.
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!