The Income-contingent Repayment (ICR) Plan can help lower your monthly payments and give you a way to earn student loan forgiveness if you’re eligible for this income-driven repayment plan.
As one of the oldest student loan repayment programs available, the Income-contingent Repayment (ICR) Plan uses your income to determine how much you can afford to pay towards your student loans each month. The ICR program is designed to help borrowers who don’t qualify for other loan repayment plans take advantage of lower payments and potentially earn loan forgiveness.
How to Qualify for the ICR Plan
The conditions for the Income-contingent Repayment (ICR) program are less strict than many other income-driven repayment plans, enabling borrowers with federal student loans not accepted by other plans to seek approval. The ICR program is the only income-driven plan currently available for parent PLUS loan borrowers.
Loans eligible for the ICR program include:
- Direct Subsidized & Unsubsidized Loans
- Direct PLUS Loans made to graduate or professional students
- Consolidated Direct PLUS Loans made to your parents
- Direct Consolidation Loans not used to repay any PLUS Loans made to your parents
- Direct Consolidation Loans used to repay PLUS Loans made to your parents
- Consolidated Subsidized & Unsubsidized Federal Stafford Loans from the FFEL program
- Consolidated FFEL PLUS Loans made to your parents and graduates or professional students
- Consolidated FFEL Consolidation Loans not used to repay any PLUS loans made to your parents
- Consolidated FFEL Consolidation Loans used to repay PLUS Loans made to your parents
- Consolidated Federal Perkins Loans
There is no income requirement to apply for the ICR program and it may be an ideal option for borrowers who pursue careers with less income, such teaching, public service or other rewarding professions.
Find out if you can take advantage of the ICR Plan for free.
How the ICR Plan Works
The Income-contingent Repayment (ICR) Plan aims at reducing your monthly student loan payments by basing payments on your discretionary income. Depending on your income and family size, you might even qualify for no monthly payments under the ICR plan.
Monthly Payments Under the ICR Plan
When you apply for the ICR program, you’ll be asked to provide details about your income, expenses and family size. Using this information, the Department of Education will select the best option for repaying your loans at the lowest monthly payment available.
Your monthly payments on the ICR program will be one of these two options determined by the DOE:
- 20 percent of your discretionary income
- What you’d pay on a 12-year fixed repayment plan when adjusted for your income
Recertifying Under the ICR Plan
You’ll need to recertify your income and family size annually to stay qualified for the ICR plan, even if nothing changes from the previous year. However, as your income changes or family size increases, the amount you pay each month could go up or down based on these factors.
Your loan servicer will send a reminder when it’s time to recertify for the ICR program. You can also have your payments adjusted at any time by submitting your recertification ahead of time. This is a good idea if your income or family size changes significantly before the recertification deadline.
If you’re unable to recertify before the deadline, your monthly payments will be based on the amount you originally owed under the 10-year Standard Repayment Plan. By providing your servicer with updated information, you can start making payments again based on your discretionary income.
Length of Repayment Period Under the ICR Plan
The repayment period for the ICR program is 25 years. Any loan balances that remain after the 25-year period are eligible for forgiveness.
Whether or not your full balance is paid within the 25-year period depends on how your income, expenses and family size change over the life of the program. Your loan servicer will monitor your progress while you’re on the plan and notify you when you’re close to qualifying for forgiveness.
In this 25-year repayment period, your ICR program loans will stay eligible for forgiveness during economic hardship deferment, repayment of other types of repayment plans and any time you’re not required to make a payment due to your discretionary income.
If you’re also working towards loan forgiveness as part of the Public Service Loan Forgiveness (PSLF) Program, you might be eligible to have your loans forgiven as part of its 10-year repayment period.
For more details on the ICR program, speak with an ICR specialist by phone at (800) 670-4196.