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Types of Income Repayment Plans

There are several types of income-driven repayment plans available, each with its own set of terms and conditions. The most common include:

• Income-Based Repayment (IBR): This plan caps monthly payments at 10% to 15% of your discretionary income and forgives any remaining balance after 20 to 25 years of qualifying payments.
• Pay As You Earn (PAYE): Similar to IBR, PAYE limits payments to 10% of your discretionary income and offers forgiveness after 20 years.
• Revised Pay As You Earn (REPAYE): Also capping payments at 10% of discretionary income, REPAYE includes all federal loan borrowers and offers forgiveness after 20 to 25 years depending on the loan type.
• Income-Contingent Repayment (ICR): This plan sets payments at the lesser of 20% of discretionary income or the amount you would pay on a fixed 12-year plan, adjusted according to income, with forgiveness after 25 years.