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  • 2m.

    Using Income-Sensitive Repayment (ISR)

    Income-sensitive repayment (ISR) gives FFELP borrowers an option that bases their payments on their income; however, this plan lacks the forgiveness benefits of the income-driven programs available for Direct loan borrowers.
    Updated: November 14, 2016

    What You'll Learn

    • How income-sensitive repayment works.
    • How long you can use this plan.
    • How this option differs from other income-driven plans.

    Tape measure squeezing $20 bill.

    Income-sensitive repayment (ISR) lets you decide what percentage of your income your loan payment will be for up to 5 years. It's only available for Federal Family Education Loan Program (FFELP) loans. If you have Direct loans, consider these other income-driven plan options instead: Revised Pay As You Earn (REPAYE), income-contingent repayment, income-based repayment, and Pay As You Earn.

    The Basics

    • You select a monthly payment amount between 4% and 25% of your monthly income.
    • Your payment must be greater than or equal to the interest accruing on your loan.
    • You must reapply for this plan every year.

    Get Your ISR Payment Estimate

    The Fine Print

    If you are seriously considering using ISR, there are some limitations to keep in mind:

    • It is only available to you for up to 5 years.
    • After 5 years, you will need to choose another repayment plan—this could mean that you may have up to 10 additional years to pay back your loan.
    • Remember, the longer it takes to pay off your loan, the more time interest has to build up. Pay it off faster to save.

    Stacking It Up

    Lowering your monthly payment using ISR may be a great short-term solution, 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 plans. Depending on your financial circumstances and repayment plan, your monthly payment may go up over time:

    income sensitive chart

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

    The repayment period will vary for each repayment plan. To come up with the numbers 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 Period300 Payments (25 Years)

    Changing Your Repayment Plan

    Unlike other repayment plans, there is no specific application form for ISR. You'll need to contact your servicer directly and provide a copy of your income tax returns and/or W-2 statements every year you apply for ISR.

    Not sure who your servicer is? Visit the National Student Loan Data System (NSLDS®) and find all of your federal student loans information, including the name of your servicer.

    What's NSLDS? Go To NSLDS

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