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  • 3m.
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    Using Income-Contingent Repayment (ICR)

    Direct loan borrowers should look into income-contingent repayment if they want payments based on their overall financial situation and don't qualify for income-based repayment or Pay As You Earn.
    Updated: July 17, 2015

    What You'll Learn

    • Advantages of income-contingent repayment (ICR).
    • Who qualifies for ICR.
    • This plan's differences from income-based repayment.

    If you're struggling to make your monthly payments, and don't qualify for income-based repayment (IBR) or Pay As You Earn, income-contingent repayment (ICR) may be an option. This program is for borrowers with Direct loans or Direct Consolidation loans only.

    The Basics

    • ICR adjusts your monthly payment based on your family's income and family size, similar to IBR or Pay As You Earn except there's no income eligibility criteria making it easier to qualify for ICR.
    • Your monthly payments will generally be a low amount, depending on your income and family size but likely not as low as IBR or Pay As You Earn.
    • After 25 years of eligible payments (300 in total), your remaining loan balance will be forgiven, but that amount will be taxable.

    Get Your Payment Estimate

    Comparing ICR To IBR

    If you received your first Direct loan disbursement before July 1, 2014, you may qualify for two different income-driven repayment plans: ICR and Old IBR.

    One big difference between them is that ICR does not count loans outside of the Direct loan program when calculating your total debt. Also, while Old IBR will typically get you a lower payment, you cannot use this plan if you have a Consolidation loan that includes Parent PLUS loans. That loan will only qualify for ICR.

    Here's a closer look at these two options:

     ICROld IBR
    Monthly paymentAbout 20% of your disposable income15% of your disposable income
    Eligible loan programs
    DLDL and FFELP
    Forgiveness length25 years (300 payments)25 years (300 payments)
    Must prove partial economic hardshipNoYes
    Interest subsidy if payments don’t cover interest (subsidized loans)NoYes, first 3 years
    Interest capitalizationYes, limited to 10% of the original principal balance when entered ICRYes, but only if you no longer have a partial financial hardship

    If You Are Married

    ICR normally counts your spouse's income and student loan debt. However, if you file taxes separately, you will have your loans and income considered separately as well. This process will be the same for same-sex couples who are legally married.

    The Fine Print

    If you are seriously considering ICR, there are some additional details to consider.

    • Income-contingent repayment is for Direct loan borrowers only.
    • Parent PLUS loans cannot use ICR unless they are consolidated.
    • Depending on when you took out your Direct loan, your options under ICR may vary a bit.

    Stacking It Up

    Lowering your monthly payment using ICR may be a big help now, but it will make your loan more expensive in the long run. Here’s what your initial monthly payments could look like compared to other repayment plans.

    And here's what the total amount you'll pay looks like.

    To come up with the graphs above, we used the following information:

    Original Amount Owed$35,000
    Interest Rate6.8%
    Annual Income$25,000
    Monthly Income$2,083
    Family Size1
    Repayment Period (for this example)240 Payments (20 years)

    In this example, you actually pay off the loan sooner than the normal 25 years (300 payments). That means that there is no forgiveness in this case. However, if your payments extend past the 25-year mark, the rest of your loan would be forgiven, and that canceled amount would be taxable.

    Changing Your Repayment Plan

    If you’ve decided that you definitely need to lower your monthly payment, then take the following steps:

    • Step 1: Review your repayment options and make sure that ICR is the right option for you.
    • Step 2: Fill out the ICR application form and send it to your servicer. Remember, it’s only available for Direct loans.

    Get Your Form

    Not Sure Who Your Servicer Is?

    Visit NSLDS and find all of your federal student loans information, including the name of your servicer.

    What’s NSLDS?  Go To NSLDS

    Plan de Pago Condicional al Ingreso

    Actualizado: 17 julio 2015

    Si estás batallando para hacer tus pagos mensuales y no calificas para la devolución basada en los ingresos (IBR), la devolución sujeta a ingresos (ICR) puede ser una buena opción. Este programa es solo para prestatarios con Préstamos directos o Préstamos de consolidación directa.

    Aspectos básicos

    • La devolución sujeta a ingresos (ICR) ajusta tus pagos mensuales según los ingresos familiares y el tamaño de tu familia, parecido a la devolución basada en ingresos, excepto que es más fácil calificar para una ICR.
    • Tus pagos mensuales por lo general serán montos pequeños, dependiendo del tamaño de tu familia y tus ingresos familiares.
    • Después de 25 años de pagos constantes (300 en total), el saldo restante de tu préstamo será condonado, pero el monto será gravable.

    Obtén el estimado de tu pago de ICR

    Comparación de la ICR y la IBR

    La Devolución basada en ingresos (IBR) por lo general es un programa de devolución mejor, así que asegúrate de entender las diferencias entre las dos:

     ICROld IBR
    Pagos más bajosSí, pero no tanto como la IBR
    Disponible para Direct Loans
    Condonación después de 25 años
    Requiere demostración de dificultades económicasNo
    El gobierno paga parte de los intereses por 3 añosNo

    Capitaliza intereses

    No, a menos que pierdas tu estatus de "Dificultades financieras temporales".
    Los préstamos Parent PLUS son elegiblesSí, consolidados con Direct Loans.No

    Si estás casado(a)

    Una de las grandes diferencias entre las ICR e IBR es que las ICR no cuentan préstamos fuera del programa de préstamo directo. Tampoco cuentan las deudas de préstamo estudiantil que tu esposa pudiera tener, por lo que hace que tu situación financiera se vea mejor de lo que es. Por lo tanto, tu pago puede ser mayor en la ICR que en la IBR.

    La letra pequeña

    Si de verdad estás considerando una ICR, hay ciertos detalles adicionales que debes tomar en consideración.

    • La devolución sujeta a ingresos es solo para prestatarios de un Préstamo directo.
    • Los Préstamos Parent PLUS no pueden usar una ICR a menos que estén consolidados.
    • Dependiendo de cuándo sacaste tu Préstamo directo, tus opciones bajo la ICR pueden variar un poco.

    Acumulación

    Reducir el monto de tus pagos mensuales usando la ICR puede ser una manera muy buena de reducir tus pagos en la actualidad, pero hará que tu préstamo sea más costoso a la larga.

    Cambia tu plan de pago

    Si decidiste que definitivamente necesitas reducir tus pagos mensuales, entonces debes seguir los siguientes pasos:

    • Paso 1: Revisa tus opciones de devolución y asegúrate de que la ICR es la opción ideal para ti.
    • Paso 2: Llena el formulario de solicitud de ICR y envíalo a tu administrador de préstamos. Recuerda que solo está disponible para préstamos directos.

    Obtén tu formulario

    ¿No sabes quién es tu administrador de préstamos?

    Visita el sistema nacional de registro de préstamos educativos (National Student Loan Data System o NSLDS, por sus siglas en inglés) y averigua toda la información acerca de tus préstamos estudiantiles federales, incluyendo el nombre de tu administrador de préstamos.

    ¿Qué es el NSLDS? Ir al NSLDS

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